Dividend withholding limits allocate taxing rights between source and residence states under the treaty. Taxing rights over company distributions allocate between the recipient's State and the source State: dividends may be taxed in the recipient's State and also in the source State subject to treaty ceilings where the recipient is the beneficial owner, without affecting taxation of the distributing company's profits. Dividends include income from shares and similar profit-participating rights. Treaty withholding limits do not apply when the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business profits or independent personal services rules govern; the source State may not tax undistributed profits on that basis.
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 allocate taxing rights between source and residence states under the treaty.
Taxing rights over company distributions allocate between the recipient's State and the source State: dividends may be taxed in the recipient's State and also in the source State subject to treaty ceilings where the recipient is the beneficial owner, without affecting taxation of the distributing company's profits. Dividends include income from shares and similar profit-participating rights. Treaty withholding limits do not apply when the beneficial owner's holding is effectively connected with a permanent establishment or fixed base in the source State, in which case business profits or independent personal services rules govern; the source State may not tax undistributed profits on that basis.
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