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Dividend withholding limitation: source state tax capped for beneficial owners, with permanent establishment connection exception. Dividends may be taxed in the recipient's State, but the source State of the paying company may also tax them under its laws subject to a withholding limitation when the recipient is the beneficial owner. 'Dividends' include income from shares and equivalent profit-participating rights. The limitation is inapplicable if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business income rules apply. A company's State of residence may not tax dividends paid from the other State or tax undistributed profits except where the dividend recipient is a resident of that other State or the holding is effectively connected with a permanent establishment or fixed base there.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Dividend withholding limitation: source state tax capped for beneficial owners, with permanent establishment connection exception.
Dividends may be taxed in the recipient's State, but the source State of the paying company may also tax them under its laws subject to a withholding limitation when the recipient is the beneficial owner. "Dividends" include income from shares and equivalent profit-participating rights. The limitation is inapplicable if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business income rules apply. A company's State of residence may not tax dividends paid from the other State or tax undistributed profits except where the dividend recipient is a resident of that other State or the holding is effectively connected with a permanent establishment or fixed base there.
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