Article 10 - Dividends

Dividend taxation limited by source-state withholding cap for beneficial owners; PE-connected holdings follow business profit rules.

Dividends paid to a resident of the other Contracting State may be taxed in the recipient's State; the source State may also tax them but, if the recipient is the beneficial owner, source taxation of the gross dividend is limited by a withholding ceiling with application to be agreed by competent authorities. The limitation does not affect corporate taxation of profits. Dividends include income from shares and similar profit-participating rights. The withholding limitation does not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business profits or independent services rules govern.