Article 10 Dividends
     1. Dividends paid by a company which is a resident of one of the States to a resident of the other State may be taxed in that other State.
     2. However, such dividends may also be taxed in the State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed:
a)
i) 5 percent of the gross amount of the dividends if the beneficial owner is a company which owns more than 50 percent of the voting stock of the company paying the dividends for a period of 12 months preceding the date on which the distribution of the dividends was voted; and
ii) 10 percent of the gross amount of the dividends if the beneficial owner is a company with no right to the treatment stipulated in the preceding point (i), but which owns 10 percent or more of the voting stock of the company paying the dividends for a period of 12 months preceding the date on which the distribution of the dividends was voted; and
b) 15 percent in all other cases.
The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
     3. A person who is a resident of the Netherlands and receives dividends distributed by a company resident of Italy has the right to the reimbursement of the amount corresponding to the "maggiorazione di conguaglio" tax in respect of these dividends due, if applicable, by said company, subject to the deduction of the tax stipulated in paragraph 2. This reimbursement must be requested, within the periods stipulated by the laws of Italy, through the same company which acts in this case in the name and on behalf of said resident of the Netherlands.
     This provision applies to dividends the distribution of which has been voted on or after the date this Convention enters into force.
     The distributing company may pay the amount described hereinabove to a resident of the Netherlands at the same time as the payment of the dividends due said resident, and deduct this amount from the tax for which it is liable in the first income declaration following said payment.
     The payment of the amount corresponding to the "maggiorazione di conguaglio" reverts to a resident of the Netherlands provided that said resident is the beneficial owner of the dividends on the date of the vote to distribute the dividends and, in the cases described in paragraph 2a), that he has owned the shares for a period of 12 months preceding that date.
     In the event of a subsequent adjustment which increases the taxable income of the distributing company or in the event reserves or other funds become liable for taxation, the reduction of the tax due by the company for the fiscal period in which the adjustment became final is limited to the portion of the tax attributable to the dividends liable for the "maggiorazione de conguaglio" and actually paid to the Treasury.
     4. The competent authorities of both States shall determine by mutual agreement the conditions governing the application of paragraphs 2 and 3.
5.a) The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights participating in profits, as well as income from other debt-claims carrying the right to profits and income from other corporate interests which are subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.
b) There shall also be considered to be dividends paid by a resident company of Italy the gross sums reimbursed for the "maggiorazione di conguaglio" described in paragraph 3, which are levied in respect of the dividends paid by this company.
     6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of one of the States, carries on a trade or business in the other 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 case, the dividends shall be taxed in said other State in accordance with its own domestic laws.
     7. Where a company which is a resident of a State derives profits or income from the other 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 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.