Dividend withholding limits restrict source-state taxation of cross-border dividends and protect recipients under treaty caps. Source-State taxation of dividends paid by a resident company to a resident of the other Contracting State is permitted but limited by treaty withholding caps that depend on the recipient's shareholding; a broad definition of 'dividends' applies, and where the recipient's holding is effectively connected with a permanent establishment in the source State, the business profits article governs. The treaty also prohibits taxing dividends paid to non-residents or taxing undistributed profits of a resident company.
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 restrict source-state taxation of cross-border dividends and protect recipients under treaty caps.
Source-State taxation of dividends paid by a resident company to a resident of the other Contracting State is permitted but limited by treaty withholding caps that depend on the recipient's shareholding; a broad definition of "dividends" applies, and where the recipient's holding is effectively connected with a permanent establishment in the source State, the business profits article governs. The treaty also prohibits taxing dividends paid to non-residents or taxing undistributed profits of a resident company.
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