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Cape Verde - Senegal Tax Treaty (2018, not yet in force) — 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 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 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 10 percent of the gross amount of the dividends.

The competent authorities of the Contracting States shall, by mutual agreement, settle the mode of application of this limitation.

The provisions of paragraphs (2) and (3) shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

(3) The term "dividends" as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founder’s 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.

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the dividends, being 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 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 15 of this Convention, as the case may be, 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 dividends paid by the company, except in so far as such dividends are paid to a resident of that other Contracting State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other Contracting State, nor be subject to 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.

(6) Notwithstanding the other provisions of this Convention, where a resident company of a Contracting State has a permanent establishment in the other Contracting State, profits taxable in accordance with paragraph (1) of Article 7 shall be subject to withholding tax in that other State, and in accordance with the law of that other Contracting State, when profits are made available to the office, but such withholding may not exceed 10 percent of the gross amount of profits after deduction of corporate tax levied in that other State.

(7) The provisions of this Article shall not apply if the main purpose, or one of them main purposes, of any person involved in the creation or alienation of the shares or other rights in respect of which dividends are paid is to take advantage of this Article by such creation or alienation.