(1) Dividends derived from a company which is a resident of a Contracting State by 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 recipient is the beneficial owner of the dividends, the tax so charged shall not exceed:
- (a) 12.5 per cent of the gross amount of the dividend if the recipient is a company which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend;
- (b) 15 per cent of the gross amount of dividend in all other cases.
This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
(3) 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, has in the other Contracting State of which the company paying the dividends is a resident a permanent establishment or a fixed base situated therein and the holding by virtue of which the dividends are paid is effectively connected with the business carried on through such permanent establishment or fixed base. In such case, the provision of Article 7 or 13 as the case may be, shall apply.
(4) 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 residents of the first-mentioned State, or subject the company's undistributed 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 that other State.
(5) The term "dividends" as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident, and also any other item (other than interest relieved from tax under the provisions of Article 10) which, under the law of the Contracting State of which the company paying the dividend is a resident, is treated as a dividend or distribution of a company.