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(1) Dividends paid by a company which is a resident of a Con- tracting State to a resident of the other Contracting State may be taxed in that other State.
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(2) However, such dividends may also be taxed in the Con- tracting 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: a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends; b) 10 per cent of the gross amount of the dividends 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.
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(3) Distributions made by a real estate investment company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. How- ever, such distributions may also be taxed in the Contracting State of which the real estate investment company making the distributions is a resident and according to the laws of that State, but if the beneficial owner of these distributions is a resident of the other Contracting State and holds directly less than 10 % of the capital of that company the tax so charged shall not exceed 15 % of the gross amount of the distributions. This paragraph shall not affect the taxation of the company in respect of the profits out of which the distributions are made.
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(4) The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares, or other rights, not being debt-claims, participating in profits, or other income 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.
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(5) The term “distributions by a real estate investment com- pany” means distributions a) in the case of Germany by a real estate investment company, according to subsection 1 of section 1 of the German Act on German Real Estate Stock Corporations with Listed Shares (REIT Act), b) in the case of Israel by a real estate investment company ac- cording to Article 64A2 of the Israeli Income Tax Ordinance.
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(6) The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends or of the distributions by a real estate investment company, being a resident of a Contract- ing State, carries on business in the other Contracting State of which the company paying the dividends or making the distribu- tions is a resident, through a permanent establishment situated therein and the holding in respect of which the dividends or dis- tributions are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
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(7) 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, 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, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistrib- uted profits consist wholly or partly of profits or income arising in such other State. This paragraph shall apply also to distributions made by a real estate investment company.