Dividend withholding limit restricts source-state taxation on cross-border dividends while allowing PE-based exceptions. Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient State, while the source State may also tax them subject to a reduced withholding where the beneficial owner is resident of the other State. 'Dividends' includes income from shares and other non-debt profit-participating rights. Reduced withholding does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected; in that event rules on business profits or independent personal services govern. Source States generally may not tax such dividends or undistributed profits except in specified connected circumstances.
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Provisions expressly mentioned in the judgment/order text.
Dividend withholding limit restricts source-state taxation on cross-border dividends while allowing PE-based exceptions.
Dividends paid by a resident company to a resident of the other Contracting State may be taxed in the recipient State, while the source State may also tax them subject to a reduced withholding where the beneficial owner is resident of the other State. "Dividends" includes income from shares and other non-debt profit-participating rights. Reduced withholding does not apply if the beneficial owner has a permanent establishment or fixed base in the source State and the holding is effectively connected; in that event rules on business profits or independent personal services govern. Source States generally may not tax such dividends or undistributed profits except in specified connected circumstances.
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