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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 re- cipient is the beneficial owner of the dividends the tax so charged shall not exceed 15 per cent of the gross amount of the dividends. 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) The term “dividends” as used in this Article means in- come from shares, and other income assimilated to income from shares by the laws of the State of which the company making the distribution is a resident, and income derived by a “Stiller Gesellschafter” (sleeping partner) from his participa- tion as such and distributions on certificates of an investment- trust.
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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 permanent establishment or fixed base. In such case the pro- visions of Article 7 or Article 14, as the case may be, shall ap- ply.
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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 divi- dends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the hold- ing in the 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 undis- ' tributed 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 State.