Italy - Dividend

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% of the gross amount of the dividends if the beneficial owner is a company which has
held more than 50% of the voting shares of the company paying the dividends for a period of
twelve months preceding the date the dividends were declared; and

(ii) 10% of the gross amount of the dividends if the beneficial owner is a company which is not
entitled to the treatment of clause (i) but which has held at least 10% of the voting shares of the
company paying the dividends for a period of twelve months preceding the date the dividends
were declared; and

(b) 15% 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 resident of the Netherlands who receives dividends distributed by a company resident in Italy
is entitled to a refund of the amount corresponding to the "maggiorazione di conguaglio" owed, if
applicable, by that company in respect of those dividends, subject to the deduction of the
withholding taxes mentioned in paragraph 2. The refund is to be requested, within the time limits
fixed by Italian law, through the intermediary of the distributing company, which in such a case is
to act in its own name and on behalf of the aforementioned resident of the Netherlands. This
provision applies to dividends declared on or after the date of entry into force of this Convention.
The distributing company may pay the above-mentioned amount to a resident of the Netherlands at
the time of the payment of the dividends due to that resident and deduct that amount from tax due in
its first income tax return filed after the payment. The payment of the amount corresponding to the
"maggiorazione di conguaglio" to a resident of the Netherlands is allowed on condition that he is
the beneficial owner of the dividends on the date the dividends are declared and, in cases mentioned
in paragraph 2(a), the shares have been held for a period of 12 months preceding that date. If the
taxable income of the distributing company is increased in a subsequent redetermination, or its
reserves or other funds are subsequently taxed, the reduction of the tax owed by the company for
the tax period in which the adjustment has become final shall be limited to that part of the tax which
is attributable to the dividends subject to the "maggiorazione di conguaglio" and which has actually
been paid to the State.

4. The competent authorities of both States shall by mutual agreement settle the mode of 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 debt-claims participating in profits and 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.

(b) Dividends paid by a company resident in Italy shall also include the gross amounts
mentioned in paragraph 3 relating to the dividends distributed by that company which have been
refunded by reason of the "maggiorazione di conguaglio".

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, 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 a case, the dividends may be taxed in that other State in
accordance with its domestic laws.

7. 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 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.

Protocol:

5. With reference to Articles 10, 11 and 12

International organizations, their bodies and officials present in the territory of one of the States
shall not be entitled in the other State to any reduction of or exemption from tax referred to in
Articles 10, 11 and 12 concerning dividends, interest and royalties arising in that other State, if
such items of income are not subjected to a tax on income in the first-mentioned State.

6. With reference to Articles 10, 11, 12 and 22

As regards paragraph 6 of Article 10, paragraph 6 of Article 11, paragraph 4 of Article 12, and
paragraph 2 of Article 22, the last sentence included therein cannot be interpreted so that the
principles contained in Articles 7 and 14 of this Convention are not taken into consideration.