Article 11 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, dividends paid by a company which is a resident of the Netherlands to a resident of Malaysia may also be taxed in the Netherlands and according to Netherlands law, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 15 per cent of the gross amount of the dividends. Where, however, the beneficial owner of the dividends is a company the capital of which is wholly or partly divided into shares and which holds directly or indirectly at least 25 per cent of the capital of the company paying the dividends, the Netherlands shall not levy a tax on the dividends. The competent authorities of the States shall by mutual agreement settle the mode of application of this paragraph.
     3. Dividends paid by a company which is a resident of Malaysia to a resident of the Netherlands who is the beneficial owner thereof shall be exempt from any tax in Malaysia which is chargeable on dividends in addition to the tax chargeable in respect of the income or profits of the company:
     Provided that nothing in this paragraph shall affect the provisions of the Malaysian law under which the tax in respect of a dividend paid by a company which is a resident of Malaysia from which Malaysian tax has been, or has been deemed to be, deducted may be adjusted by reference to the rate of tax appropriate to the Malaysian year of assessment immediately following that in which the dividend was paid.
     4. The provisions of paragraphs 2 and 3 shall not affect the taxation of the company in respect of the income or profits out of which the dividends are paid.
     5. 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 from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident.
     6. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of one of the States, carries on business in the other State of which the company paying the dividends is a resident, through a permanent establishment situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 8 shall apply.
     7. Where a company which is a resident of one of the States derives income or profits 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 situated in that other State, nor subject the company's undistributed income or profits to a tax on the company's undistributed income or profits, even if the dividends paid or the undistributed income or profits consist wholly or partly of income or profits arising in such other State.