background image

Luxembourg - San Marino Tax Treaty (as amended by 2009 protocol) — Orbitax Tax Hub

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 that 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, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed the following:

  • (a) 0 percent of the gross amount of the dividends if the beneficial owner is a company which directly holds at least 10 percent of the capital of the company paying the dividends during an uninterrupted period of at least twelve months preceding the decision for the distribution of the dividends;
  • (b) 15 percent of the gross amount of the dividends, in all other cases.

This paragraph shall not affect the taxation of the profits of the company out of which the dividends are paid.

(3) The term "dividends" as used in this Article refers to income from shares, "jouissance" shares or certificates, mining or founder's shares or other beneficiary rights, not being debt- claims as well as income from other social shares that is subjected to the same taxation treatment as income from shares under the laws of the State of which the company making the distribution is a resident.

(4) The provisions of paragraphs (1) and (2) of this Article are not applicable if the beneficial owner of the dividends, being a resident of a Contracting State, carries on in the other Contracting State, of which the company paying the dividends is a resident, a business activity through a permanent establishment situated therein 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.

(5) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, then 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 situated in that other State. Further, the other State may not impose any taxation on the undistributed profits of the company, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.