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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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DT: Trinidad and Tobago: double taxation agreement, Article 10: Dividends

(1)

(a)

 

 

(i) Dividends derived from a company which is a resident of the United Kingdom by a resident of Trinidad and Tobago may be taxed in Trinidad and Tobago.
(ii) Where a resident of Trinidad and Tobago is entitled to a tax credit in respect of such a dividend under sub-paragraph (b) of this paragraph, tax may also be charged in the United Kingdom and according to the laws of the United Kingdom on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 20 per cent.
(iii) Except as aforesaid dividends derived from a company which is a resident of the United Kingdom by a resident of Trinidad and Tobago who is the beneficial owner of the dividends shall be exempt from any tax in the United Kingdom which is chargeable on dividends.

 

(b) A resident of Trinidad and Tobago who receives a dividend from a company which is a resident of the United Kingdom shall, subject to the provisions of sub-paragraph (c) of this paragraph and provided he is the beneficial owner of the dividend, be entitled to the tax credit in respect thereof to which an individual resident in the United Kingdom would have been entitled had he received that dividend and to the payment of any excess of that tax credit over his liability to United Kingdom tax.
(c) The provisions of sub-paragraph (b) of this paragraph shall not apply where the beneficial owner of the dividend is a company which either alone or together with one or more associated companies controls, directly or indirectly, at least 10 per cent of the voting power in the company paying the dividend. For the purposes of this subparagraph, two companies shall be deemed to be associated if one controls, directly or indirectly, more than 50 per cent of the voting power in the other company, or a third company controls more than 50 per cent of the voting power in both of them.

(2) Dividends derived from a company which is a resident of Trinidad and Tobago by aresident of the United Kingdom may be taxed in the United Kingdom. Such dividends may alsobe taxed in Trinidad and Tobago and according to the laws of Trinidad and Tobago, but ifthe recipient is the beneficial owner of the dividends the tax so charged shall notexceed:

(a) 10 per cent of the gross amount of the dividends if the beneficial owner is a company which controls, directly or indirectly, at least 25 per cent of the voting power in the company paying the dividends;
(b) 20 per cent of the gross amount of the dividends in all other cases.

(3) The term `dividends` as used in this Article means income from shares or otherrights, not being debt-claims, participating in profits, as well as income from othercorporate rights assimilated to income from shares by the taxation law of the State ofwhich the company making the distribution is a resident and also includes any other itemwhich, under the law of the Contracting State of which the company paying the dividend isa resident, is treated as a dividend or distribution of a company.

(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if thebeneficial owner of the dividends, being a resident of a Contracting State, carries onbusiness in the other Contracting State of which the company paying the dividends is aresident, through a permanent establishment situated therein, and the holding in respectof which the dividends are paid is effectively connected with such permanentestablishment. 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 incomefrom the other Contracting State that other State may not impose any tax on the dividendspaid by the company, except insofar as such dividends are paid to a resident of that otherState or insofar as the holding in respect of which the dividends are paid is effectivelyconnected with a permanent establishment situated in that other State, nor subject thecompany’s undistributed profits to a tax on undistributed profits, even if the dividendspaid or the undistributed profits consist wholly or partly of profits or income arising inthat other State.