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(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.
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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 ben- eficial owner of the dividends is a resident of the other Contract- ing State, the tax so charged shall not exceed: a) 5 per cent of the gross amount of the dividends if the bene- ficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the com- pany paying the dividends; b) 15 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. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.
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(3) The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights or other rights, not being debt-claims, participating in profits, as well as 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 distributions is a resident and distributions on certificates of an investment fund.
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(4) The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Con- tracting 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 per- forms 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 per- manent establishment or fixed base. In such case the provi- sions of Article 7 or Article 14, as the case may be, shall apply.
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(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 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 or a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the divi- dends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.