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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

(2) However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State the tax so charged shall not exceed:

  • (a) 5 percent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent stake in the company paying the dividends;
  • (b) 15 per cent of the gross amount of the dividends in all other cases;
  • (c) This paragraph shall not affect the taxation of the company in respect of the profits out of which dividends are paid.

(3) The term "dividends" as used in this Article means income from shares, jouissance shares or certificates, mining shares, founders' shares or other beneficiary shares, with the exception of debt claims, as well as income subjected to the distribution regime by the taxation law of the State of which the company making the distribution is a resident.

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on, in the other Contracting State of which the company paying the dividends is a resident, a business activity, and the holding in respect of which the dividends are paid is effectively connected therewith. In such case the provisions of Article 7 shall apply.

(5) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even in case the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

(6) No provision in this Convention shall prevent a Contracting State from imposing on the profits attributable to a permanent establishment situated in that State, of a company which is a resident of the other Contracting State, a tax in addition to the taxes applicable to such income in accordance with other provisions of the Convention, provided that the additional tax so imposed shall not exceed 5 percent of the amount of profits attributable to the permanent establishment determined after the payment of the corporation tax relating to such profits.

(7) The provisions of sub-paragraphs (a) and (b) of paragraph (2) shall not apply to dividends paid from income or gains from immovable property within the meaning of Article 6 by a vehicle of investment:

  • (a) that distributes most of this income annually; and
  • (b) whose income and gains from these immovable properties are exempt from taxation;

where the beneficial owner of the dividends holds directly or indirectly 10 percent or more in the vehicle that pays dividends. In this case, the dividends are taxed at the rate prescribed by the national law of the Contracting State in which they arise.

(8) The provisions of this Article shall not apply if the main purpose or one of the main purposes of any person concerned with the creation or transfer of the shares or other rights in respect of which the dividends are paid is to draw advantage of this Article by means of that creation or transfer.