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(1) Dividends paid by a company which is a resident of the sovereign territory of a Contracting Party to a resident of the sovereign territory of the other Contracting Party may be taxed in the sovereign territory of that other Contracting Party.
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(2) However, such dividends may also be taxed in the sovereign territory of the Contracting Party of which the company paying the dividends is a resident and according to the laws of the state of that Contracting Party, but if the beneficial owner of the dividends is a resident of the sovereign territory of the other Contracting Party, 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) 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.
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(3) The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders' shares 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 and distributions on certificates of an investment fund or 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 the sovereign territory of a Contracting Party, carries on business in the sovereign territory of the other Contracting Party of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other sovereign territory 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 provisions 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 the sovereign territory of a Contracting Party derives profits or income from the sovereign territory of the other Contracting Party, that other Contracting Party may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of the sovereign territory of that other Contracting Party 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 the sovereign territory of that other Contracting Party, nor subject the company's undistributed 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 the sovereign territory of such other Contracting Party.