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 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, except as otherwise provided in this Article, the tax so charged shall not exceed:
( a ) 5 percent of the gross amount of the dividends if the beneficial owner is a company that owns at least 10 percent of the voting stock of the company paying the dividends;
( b ) 15 percent of the gross amount of the dividends in all other cases.
The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
3. However, as long as an individual resident in Ireland is entitled under Irish law to a tax credit in respect of dividends paid by a company resident in Ireland, the following provisions of this paragraph shall apply to dividends paid by a company resident in Ireland instead of the provisions of paragraphs I and 2 of this Article:
( a ) (i) Dividends paid by a company which is a resident of Ireland to a resident of the United States may be taxed in the United States.
(ii) Where a resident of the United States is entitled to a tax credit in respect of such a dividend under subparagraph (b) of this paragraph, tax may also be charged in Ireland and according to the laws of Ireland on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 15 percent.
(iii) Except as provided in subparagraph ( a )(ii) of this paragraph, dividends paid by a company which is a resident of Ireland and which are beneficially owned by a resident of the United States shall be exempt from any tax in Ireland which is chargeable on dividends.
(b) A resident of the United States who receives dividends from a company which is a resident of Ireland shall, subject to the provisions of subparagraph ( c ) of this paragraph and provided he is the beneficial owner of the dividends, be entitled to the tax credit in respect thereof to which an individual resident in Ireland would have been entitled had he received those dividends and to the payment of any excess of that tax credit over his liability to Irish tax. Any such tax credit shall be treated for United States foreign tax credit purposes as a dividend.
(c) The provisions of subparagraph ( b ) of this paragraph shall not apply where the beneficial owner of the dividend (being a company) is, or is associated with, a company which either alone or together with one or more associated companies controls directly or indirectly 10 percent or more of the voting power in the company paying the dividend. For the purpose of this subparagraph, two companies shall be deemed to be associated if one is controlled directly or indirectly by the other or both are controlled directly or indirectly by a third company.
4. Subparagraph (a) of paragraph 2 shall not apply in the case of dividends paid by a Regulated Investment Company or a Real Estate Investment Trust (REIT). In the case of a REIT, subparagraph (b) of paragraph 2 also shall not apply, unless the dividend is beneficially owned by an individual holding a less than 10 percent interest in the REIT.
5. The term "dividends" as used in this Article means income from shares or other rights, not being debt claims, and includes any income or distribution treated as income from shares under the taxation laws of the Contracting State of which the company paying the dividends or income or making the distribution is a resident.
6. The provisions of paragraphs 1, 2 and 3 shall not apply if 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, or performs in that other State independent personal services from a fixed base situated therein, and the dividends are attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.
7. A company which is a resident of a Contracting State and which has a permanent establishment in the other Contracting State or which is subject to tax on a net basis in that other State on items of income or gains that may be taxed in that other State under Article 6 (Income from Immovable Property (Real Property)) or under paragraph I of Article 13 (Capital Gains) may be subject in that other State to a tax in addition to the tax allowable under the other provisions of this Convention. Such tax, however, may be imposed only on:
( a ) in the case of the United States,
(i) the portion of the business profits of the company attributable to the permanent establishment, and
(ii) the portion of the income or gains referred to in the preceding sentence which may be subject to tax under Article 6 or 13,
which represents the "dividend equivalent amount", as that term is defined under the laws of the United States, as they may be amended from time to time without changing the general principle thereof, and
( b ) in the case of Ireland,
(i) the portion of the business profits of the company attributable to the permanent establishment, and
(ii) the portion of the income or gains referred to in the first sentence of this paragraph which may be taxed in Ireland under Article 6 or under Article 13,
which in both cases represent an amount that, if those business profits, income or gains arose to a subsidiary company incorporated in Ireland, would be distributed as a dividend.
8. The tax referred to in paragraph 7 may not be imposed at a rate in excess of the rate specified in subparagraph (a) of paragraph 2.