Dividends Taxed in Both States; 15% Cap for Companies with 10% Stock, 25% Otherwise; Special Rules Apply
Dividends paid by a company in one Contracting State to a resident of another Contracting State may be taxed in both states. However, if the beneficial owner resides in the other state, the tax in the company's state shall not exceed 15% if the owner is a company with at least 10% voting stock, or 25% in other cases. Special rules apply for dividends from U.S. Regulated Investment Companies and Real Estate Investment Trusts. The term "dividends" includes income from shares or similar rights. Certain business activities may exempt dividends from these provisions, applying instead Articles on Business Profits or Independent Personal Services. A state cannot tax a company's dividends or undistributed profits unless connected to a permanent establishment or fixed base within that state.
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