13
a) the beneficial owner of the dividends is an individual holding an interest of
not more than 10 per cent. in the pooled investment vehicle;
b) the dividends are paid with respect to a class of stock that is publicly traded
and the beneficial owner of the dividends is a person holding an interest of not more
than 5 per cent. of any class of the stock of the pooled investment vehicle; or
c) the beneficial owner of the dividends is a person holding an interest of not
more than 10 per cent. in the pooled investment vehicle and that vehicle is diversified.
5. The previous provisions 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 payer is a resident, through a permanent establishment situated therein, and
the dividends are attributable to such permanent establishment. In such case, the provisions of
Article 7 (Business Profits) of this Convention shall apply.
6. A Contracting State may not impose any tax on dividends paid by a company which
is a resident of the other Contracting State, except insofar as the dividends are paid to a resident
of the first-mentioned State or the dividends are attributable to a permanent establishment
situated in that State, nor may it impose tax on a company’s undistributed profits, except as
provided in paragraph 7 of this Article, even if the dividends paid or the undistributed profits
consist wholly or partly of profits or income arising in that State.
7. A company that is a resident of a Contracting State and that has a permanent
establishment in the other Contracting State, or that is subject to tax in that other State on a net
basis on its income or gains that may be taxed in that other State under Article 6 (Income from
Real Property) or under paragraph 1 of Article 13 (Gains) of this Convention, may be subject in
that other State to a tax in addition to any tax that may be imposed by that other State in
accordance with the other provisions of this Convention. Such tax, however, may be imposed
on only the portion of the business profits of the company attributable to the permanent
establishment, and the portion of the income or gains referred to in the preceding sentence that
is subject to tax under Article 6 or under paragraph 1 of Article 13, that, in the case of the
United States, represents the dividend equivalent amount of such profits, income or gains and,
in the case of the United Kingdom, is an amount that is analogous to the dividend equivalent
amount. This paragraph shall not apply in the case of a company which:
a) prior to October 1
st
, 1998 was engaged in activities giving rise to profits
attributable to that permanent establishment or to income or gains to which the
provisions of Article 6 or, as the case may be, paragraph 1 of Article 13 apply;
b) is a qualified person by reason of sub-paragraph c) of paragraph 2 of Article
23 (Limitation on Benefits) of this Convention; or
c) is entitled to benefits under paragraph 3 or paragraph 6 of that Article with
respect to an item of income, profit or gain described in this paragraph.