Dividends taxation: residence and source rules limit source-state taxing rights; connection to permanent establishment alters treatment. Dividends paid by a resident company to a resident of the other Contracting State are taxable in the recipient's State, while the payer State may also tax such dividends subject to a withholding limit when the recipient is the beneficial owner. The Article defines dividends to include income from shares and similar corporate rights. The dividend rules do not apply if the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the payer State; in that case rules on business profits or independent personal services apply. The payer State may not tax dividends or undistributed profits derived from the other State except in the specified connected or resident cases.