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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
Updated
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DT: Tunisia: double taxation agreement, Article 10: Dividends

 

(1) Dividends derived from a company which is a resident of a Contracting State by 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 law of that State, but provided that the beneficial owner of the dividends is a resident of the other Contracting State the tax so charged shall not exceed:

 

(a) 12 per cent of the gross amount of the dividends if the beneficial owner is a company which controls directly at least 25 per cent of the voting power in the company paying the dividends;
(b) in all other cases 20 per cent of the gross amount of the dividends.

(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 assimilated to or treated in the same way as income from shares by the taxation law of the State of which the company making the payment is a resident.

(4) The provisions of paragraphs (1) and (2) of this Article 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 holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 14, as the case may be, 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 or a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

(6) Notwithstanding the other provisions of this Convention, where a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State it may be subjected therein to a tax on dividends of which the basis of assessment is determined according to the internal law of that other Contracting State but such tax shall not exceed 12 per cent of the distributed profits of the company deemed to be attributable to the permanent establishment.