(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.
(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, the tax so charged shall not exceed:
- *(a) 5 percent of the gross amount of dividends if the beneficial user is a corporation (but not a business partnership) for a period of 365 days including the day on which the dividend is paid out, one which directly disposing of at least 10 percent of the capital of the corporation paying the dividend (in the calculation of this period, changes in ownership or operator are not taken into account which would result from a re-structuring, like a merger or split, of the company holding the stocks or paying the dividends);
- (b) 10 per cent of the gross amount of the dividends if the beneficial owner is a pension fund resident in the Netherlands;
- (c) 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.
(3) 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, as well as income from other corporate rights 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 income from distributions on certificates of a German "Investmentvermögen".
(4) The provisions of paragraphs (1), (2) and (6) 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 and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
(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 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 undistributed profits consist wholly or partly of profits or income arising in such other State.
(6) Notwithstanding the provisions of paragraphs (1), (2) and (5), dividends or distributions in regard of profit sharing certificates paid by a company which under the laws of a Contracting State is a resident of that State, to an individual who is a resident of the other Contracting State and who upon ceasing to be a resident of the first-mentioned State is taxed on the appreciation of capital as meant in Article 13, paragraph (6), may also be taxed in that State in accordance with the laws of that State, but only for a period of ten years after emigration of the individual insofar as the assessment on the appreciation of capital is still outstanding.