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 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 the tax so charged shall not exceed:

• (a) Five per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 25 per cent of the capital of the company paying the dividends;
• (b) Fifteen per cent of the gross amount of the dividends in all other cases.

(3) So long as in one Contracting State the rate of tax on the profits of a company is lower in the case of distributed profits than in the case of undistributed profits and the difference is 20 per cent or more, the tax levied on dividends in that State may, notwithstanding the provisions of paragraph (2), amount to 25 per cent of the gross amount of the dividends, including the supplementary corporation tax, if such dividends are derived from a company which is a resident of that Contracting State and are received by a company which is a resident of the other Contracting State and which itself or together with other persons controlling it or being under common control with it, owns, directly or indirectly, at least 25 per cent of the voting shares of the company which is a resident of the first-mentioned 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, including income derived from participation in a business by a sleeping partner, income from bonds and loans carrying a right to participate in profits, and distribution on certificates of an investment trust.

(5) The provisions of paragraphs (1) to (3) shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 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 to persons who are not residents of that other State, nor subject the company's profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.