Dividend taxation: source and residence states' taxing rights balanced with a treaty limit for beneficial owners.

Dividends paid by a company resident of one Contracting State to a resident of the other may be taxed in the recipient's State, while the source State may also tax such dividends subject to a treaty limit where the recipient is the beneficial owner; this does not affect taxation of the company's profits. Dividends include income from shares, similar profit-participating rights and investment funds. Where the beneficial owner carries on business in the source State through a permanent establishment and the holding is effectively connected thereto, Article 7 applies instead of the dividend provisions.

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