Document ID: chunk:federal_register_of_legislation:C2004A01208:schedule:47:p10
Version: federal_register_of_legislation:C2004A01208
Segment Type: schedule
Provision Reference: sch 47 (pt 10/25)
Character Range: 112609–115305

affect the taxation of the company in respect of the profits out of which the dividends are paid.

5 The term "dividends" in this Article means income from shares and other income assimilated to income from shares by the law, relating to tax, of the Contracting State of which the company making the distribution is a resident.

6 The provisions of paragraphs 1 and 2 shall not apply if the person beneficially entitled to 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 in that other State, or performs in that other State independent personal services from a fixed base situated in that other State, and the holding in respect of which the dividends are paid is effectively connected with that permanent establishment or fixed base. In that case the provisions of Article 7 or Article 14, as the case may be, shall apply.

7 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—being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled—except insofar as the holding in respect of which such 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 dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

Article 11

INTEREST

1 Interest arising in a Contracting State, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

2 However, that interest may also be taxed in the Contracting State in which it arises and according to the law of that State, but the tax so charged shall not exceed:

 (a) 10 per cent of the gross amount of the interest:

            (i) if the person beneficially entitled is a bank or an insurance company; or

            (ii) if derived from bonds and securities that are regularly and substantially traded on a recognized securities market; or

            (iii) paid by banks except where subparagraphs (i) or (ii) apply; or

            (iv) paid by the purchaser to the seller of machinery and equipment in connection with a sale on credit; and

 (b) 15 per cent of the gross amount of the interest in all other cases.

3 Notwithstanding the provisions of paragraph 2, interest derived from the