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 beneficial owner of the dividends is a resident of the other State, the tax so charged shall not exceed:

a) 5 percent of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 10 percent of the voting power in the company paying the dividends; and

b) 15 percent of the gross amount of the dividends in all other cases.

3. Notwithstanding the provisions of paragraph 2, dividends shall not be taxed in the State of which the company paying the dividends is a resident if the person who is the

beneficial owner of the dividends is a company that is a resident of the other State that has owned directly shares representing 80 percent or more of the voting power in the company paying the dividends for a 12-month period ending on the date the dividend is declared and:

a) owned, directly or indirectly, shares representing at least 80 percent of the voting power in the company paying the dividends prior to October Ist, 1998;

b) is a qualified person by reason of subparagraph c) of paragraph 2 of Article 26 (Limitation on Benefits);

c) is entitled to benefits with respect to the dividends under paragraph 3 of Article 26; or

d) has received a determination pursuant to paragraph 7 of Article 26 with respect to this paragraph.

4. a) Subparagraph a) of paragraph 2 and paragraph 3 shall not apply in the case of

dividends paid by a United States person that is a Regulated Investment Company (RIC) or a Real Estate Investment Trust (REIT) or in the case of dividends paid by a Dutch company that is a "beleggingsinstelling" in the sense of Article 28 of the Netherlands Corporation Tax Act (Wet op de vennootschapsbelasting 1969) (hereinafter referred to as "beleggingsinstelling'').

b) In the case of dividends paid by a RIC or a beleggingsinstelling, subparagraph b) of paragraph 2 shall apply.

c) In the case of dividends paid by a REIT or, notwithstanding subparagraph b) of this paragraph 4, by a beleggingsinstelling that invests in real estate to the same extent as is required of a REIT, subparagraph b) of paragraph 2 shall apply only if:

i) the beneficial owner of the dividends is an individual holding an interest of not more than 25 percent in the REIT or beleggingsinstelling;

ii) the dividends are paid with respect to a class of stock that is publicly

traded and the beneficial owner of the dividends holds an interest of not more than 5 percent of any class of the stock of the REIT or beleggingsinstelling;

iii) the beneficial owner of the dividends holds an interest of not more than 10 percent in the REIT or beleggingsinstelling and the gross value of no single interest in real property held by the REIT or beleggingsinstelling exceeds 10 percent of the gross value of the total interest in real property held by the REIT or beleggingsinstelling; or

iv) the beneficial owner is a beleggingsinstelling, in the case of dividends paid by a REIT, or a RIC or a REIT, in the case of dividends paid by a beleggingsinstelling.

5. The provisions of the preceding paragraphs shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

6. The term "dividends" as used in this Convention means income from shares or other rights participating in profits, as well as income from other corporate rights which is 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. For the purposes of this paragraph, the term "dividends" also includes, in the case of the Netherlands, income from debt claims that is subjected to the same taxation treatment as income from shares and, in the case of the United States, income from debt obligations carrying the right to participate in profits.

7. The provisions of paragraphs 1,2,3, and 4 of this Article 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, 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 forms part of the business property of such permanent establishment or pertains to such fixed base. In that case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply.

8. Where a company which is a resident of one of the States 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 forms part of the business property of a permanent establishment or pertains to a fixed base situated in that other State, nor, except as provided in Article 11 (Branch Tax), 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.