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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 Contracting 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 national laws of that Contracting State, but if the beneficial owner of the dividends is a company (other than a partnership) which holds at least 10 percent of the capital of the company paying dividends the tax so charged shall not exceed 5 percent of the gross amount of the dividends.

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:

  • (a) in the case of Kazakhstan:
    • (i) the Government of the Republic of Kazakhstan, a political subdivision or local authorities;
    • (ii) the National Bank of the Republic of Kazakhstan;
    • (iii) JSC Fund of the National prosperity "Samruk-Kazyna"; and
    • (iv) any other such government financial institution as may be agreed from time to time between the Contracting States;
  • (b) in the case of the U.A.E.:
    • (i) the Government of the U.A.E. or its political subdivision, or local authorities, local Government of their financial institutions;
    • (ii) U.A.E. Central Bank;
    • (iii) Abu Dhabi Investment Authority;
    • (iv) Abu Dhabi Investment Council;
    • (v) Abu Dhabi Fund for Economic Development;
    • (vi) Mubadala;
    • (vii) Dubai Holding;
    • (viii) Dubai World;
    • (ix) Abu Dhabi International petroleum Company; and
    • (x) any other such government financial institution as may be agreed from time to time between the Contracting States.

(4) The term "dividends" as used in this Article means income from shares, 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 Contracting State of which the company making the distribution is a resident.

(5) The provisions of paragraphs (1) and (2) of this Article 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 7 or Article 14, 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 Contracting 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 Contracting State, or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other Contracting 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 Contracting State.

(7) Nothing in this Convention shall be construed as preventing a Contracting State from imposing a special tax on the profits of a company attributable to a permanent establishment in that State, in addition to the tax which would be chargeable on the profits of a company which is a national of that State, provided that any additional tax so charged shall not exceed 5 percent of the amount of such profits which have not been subjected to such additional tax in previous taxation years. For the purpose of this provision, the profits shall be determined after deducting there from all taxes, other than the additional tax referred to in this paragraph, imposed in the Contracting State in which the permanent establishment exists.