Dividend withholding limits protect cross-border shareholders by restricting source-state taxation and preserving PE exceptions for connected holdings. Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State and may also be taxed in the State of the paying company, but where the beneficial owner is a resident of the other State the tax charged by the source State is limited; dividends are defined to include income from shares and similar corporate rights, and the withholding limitation does not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base, in which case articles on business profits or independent personal services apply.
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 limits protect cross-border shareholders by restricting source-state taxation and preserving PE exceptions for connected holdings.
Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State and may also be taxed in the State of the paying company, but where the beneficial owner is a resident of the other State the tax charged by the source State is limited; dividends are defined to include income from shares and similar corporate rights, and the withholding limitation does not apply where the beneficial owner's holding is effectively connected with a permanent establishment or fixed base, in which case articles on business profits or independent personal services apply.
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