background image
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.



(1) Dividends paid by a company that is resident of a Contracting State to a resident of the other Contracting State may be taxed in the State of which the company paying the dividends is a resident and according to the laws of that State.

(2) The term "dividends" as used in this Article refers to income from shares, "jouissance" shares or certificates, mining or founder's shares or other beneficial owner rights, not being debt-claims, as well as income from other social rights assimilated to income from shares under the tax laws of the State of which the company making the distribution is a resident.

(3) Where a company which is a resident of a Contracting State is subject therein to payment of a dividend tax and it has one or more permanent establishments in the territory of the other Contracting State for which it is also liable in the other State to pay the same tax, there shall be an apportionment, between the two States, of income giving rise to such tax, in order to avoid double taxation.

(4) The apportionment of the tax, referred to in the preceding paragraph shall be established, for each financial year, on the basis of the following ratio:

A ÷ B for the State of which the company is not a resident (B - A) ÷ B for the State of which the company is a resident.

The letter A represents the amount of accounting results/earnings obtained by the company, arising from the overall establishments that it owns in the State of which it is not a resident, with all compensations being made between the profits and losses of those establishments. These accounting results shall agree with those deemed to have been realized in the said establishments under the provisions of Articles 7 and 9 of this Convention.

The letter B represents the total accounting result of the company as shown in its general balance sheet, after due compensation being made between the profits and losses. In cases where the total accounting result of a financial year is nil or negative, the apportionment shall be made on the basis of previously carried out results.

(5) Where the distributed profits include income from investments held by the company in the capital of other companies and these investments fulfill the conditions for qualifying for special regimes to which affiliated companies are subjected, conditions required by virtue of the domestic laws, either of the State of residence of the company or of the other State, as they appear in the balance sheet concerning the permanent establishment in the first or in the second State, each of the said States shall apply to these distributed profits, insofar as they   arise from earnings of investments governed by its domestic laws, the provisions of this law, at the same time as it taxes the portion of these profits that does not arise from the earnings of  the investment, insofar as the taxation attributed to it is in keeping with the modalities prescribed in paragraph (4) of this Article.