Dividends withholding limits restrict source-state tax on cross-border dividends to reduced rates for qualifying beneficial owners. Cross-border dividends may be taxed in the recipient's State, but the source State may also tax dividends paid by its resident company subject to capped withholding for beneficial owners, with reduced rates for qualifying corporate shareholders meeting ownership and continuity conditions; dividends are broadly defined to include various equity-like rights; dividend rules do not apply where the beneficial owner's holding is effectively connected to a permanent establishment or fixed base in the source State, in which case business profits provisions govern, and the source State may not tax dividends derived from the other State or undistributed profits except as specified.
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Provisions expressly mentioned in the judgment/order text.
Dividends withholding limits restrict source-state tax on cross-border dividends to reduced rates for qualifying beneficial owners.
Cross-border dividends may be taxed in the recipient's State, but the source State may also tax dividends paid by its resident company subject to capped withholding for beneficial owners, with reduced rates for qualifying corporate shareholders meeting ownership and continuity conditions; dividends are broadly defined to include various equity-like rights; dividend rules do not apply where the beneficial owner's holding is effectively connected to a permanent establishment or fixed base in the source State, in which case business profits provisions govern, and the source State may not tax dividends derived from the other State or undistributed profits except as specified.
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