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 liable to taxation 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, or a company listed as a real estate investment company) that holds directly at least 10 percent of the capital of the company paying the dividends;
- (b) 15 percent of the gross amount of the dividends in all other cases. The provisions of this paragraph do not affect company taxation as regards to the profits out of which the dividends are paid.
(3) The term "dividends" as used in this Article shall be understood as income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, with the exception of debt-claims, which enable profit sharing, as well as income from other corporate rights, which is subject to the same taxation treatment as income from shares or holdings by the laws of the State whereof the company making the distribution is a resident, including income arising from distributions by way of certificates in a German "Investmentvermögen".
(4) The provisions of paragraphs (1) and (2) of this Article shall not be applicable when the beneficial owner of the dividends, being a resident of a Contracting State, performs economic activities in the other Contracting State of which the company that pays the dividends is a resident, through a permanent establishment situated therein, provided that the holding according to which such dividends are paid is effectively connected with such permanent establishment. In such cases, the provisions of Article 7 of this Convention 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 Contracting State, or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor may it subject the company's undistributed profits to a tax, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.