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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 in which the company paying the dividends is a resident, and in accordance with the laws of that State. However if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 12 percent of the gross amount of the dividends.

Notwithstanding the provisions of the first paragraph of this Article, the Contracting State in which the company which pays the dividends is a resident, shall deem these dividends as tax exempt, if the beneficial owner is a company that holds, directly, at least 50 percent of the capital of the company paying the dividends, and the latter has been taxed as regards to the profits out of which the dividends are paid.

This paragraph shall not affect the taxation 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, founders' shares or other rights, not being debt-claims, participating in profits as well as income from other corporate rights that is subject to the same taxation law 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 shall not be applicable when the beneficial owner of the dividends, being a 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, provided that the holding according to which such dividends are paid is effectively connected with the said permanent establishment. In such cases, the provisions of Article 7 of this Convention 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 shares 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 that other State.