Dividend withholding cap limits source-state tax where recipient is beneficial owner; PE or fixed-base connections are exceptions. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, while the company's State may also tax those dividends subject to a specified withholding cap where the recipient is the beneficial owner. 'Dividends' includes income from shares and similar profit-participating corporate rights. The withholding limitation does not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case rules on business profits or independent personal services apply, and the source State may not tax undistributed profits.
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 cap limits source-state tax where recipient is beneficial owner; PE or fixed-base connections are exceptions.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient's State, while the company's State may also tax those dividends subject to a specified withholding cap where the recipient is the beneficial owner. "Dividends" includes income from shares and similar profit-participating corporate rights. The withholding limitation does not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case rules on business profits or independent personal services apply, and the source State may not tax undistributed profits.
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