ARTICLE 11

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. However, if the recipient is the resident of the other Contracting State and the beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the dividends.

The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

(3) Notwithstanding the provisions of paragraphs 1 and 2, dividends paid by a company which is a resident of a Contracting State shall be taxable only in the other Contracting State if the beneficial owner of the dividends is:

• (1) In the case of the United Arab Emirates:
  • (a) the federal or local Governments, a political subdivision or a local authority;
  • (b) the following entities as long as they are wholly owned by the federal or local Governments of the United Arab Emirates:
    • (i) The Central Bank of the United Arab Emirates,
    • (ii) The Abu Dhabi Investment Authority,
    • (iii) The Abu Dhabi Investment Council,
    • (iv) Mubadala Development Company (Mubadala),
    • (v) Dubai World,
    • (vi) Investment Corporation of Dubai (ICD),
    • (vii) United Arab Emirates Investment Authority,
    • (viii) International Petroleum Investment Company (IPIC), and
    • (ix) Any other governmental financial institutions as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State.
• (2) In the case of Ecuador:
  • (a) the Government, a political subdivision or a local authority;
  • (b) the following entities as long as they are wholly owned by the Government of Ecuador:
    • (i) The Central Bank of Ecuador, and
    • (ii) Any other governmental financial institutions as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State.

(4) The term “dividends” as used in this Article means income from shares “jouissance” shares or “jouissance” rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.

(5) 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 business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 8 or Article 15, as the case may be, shall apply.

(6) 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 if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.