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HMRC internal manual

Double Taxation Relief Manual

Double Taxation Relief Manual: Guidance by country: United States of America: Dividends

Old Agreement up to 30th April 2003

The United States tax deducted from a dividend paid by a United States corporation at the agreement rate of 15 per cent (5 per cent if the recipient is a company which is a resident of the United Kingdom and controls, directly or indirectly, at least 10 per cent of the voting stock in the United States company) qualifies for credit as a direct tax.

The reductions to the above rates are not given if the dividends are effectively connected with (see INTM153110) a business carried on by the United Kingdom resident recipient through a permanent establishment in the United States or with a fixed base in the United States from which the recipient performs independent personal services.

Where the dividend is paid to a United Kingdom resident company controlling, directly or indirectly, at least 10 per cent of the voting power in the United States company, credit may also be given for the underlying tax (see INTM164010)