Oman - Dividend

Article 10. Dividends 

1.  Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 

2.  However, such dividends may also be taxed in the Contracting 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 Contracting State, the tax so charged shall not exceed:

a.  0 (zero) per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 10 (ten) per cent of the capital of the company paying the dividends; 

b.  10 (ten) per cent of the gross amount of the dividends in all other cases. 

The  competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

3.  The provisions of paragraph 2 shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 

4.  Notwithstanding the provisions of paragraphs 1 and 2 of this Article, dividends paid by a company which is a resident of a Contracting State shall be taxable only in the other Contracting State if the beneficial owner is that other State, a political subdivision, local government, a pension fund, or the Central Bank of either Contracting State, the State General Reserve Fund of the Sultanate of Oman, the Omani Investment Fund, the Omani Development bank, and any other statutory body or institution wholly or mainly owned by the Government of the Sultanate of Oman as may be agreed from time to time between the competent authorities of the Contracting States. 

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 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. 

6.  The provisions of paragraphs 1, 2 and 4 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 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 provisions of Article 7 or Article 14, as the case may be, shall apply. 

7.  Where a company which is a resident of a Contracting State derives profits or income from the other Contracting 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. 

8.  With respect to dividends referred to in subparagraph a) of paragraph 2 which are paid by a company which is a resident of the Netherlands, if, according to the law in force in the Sultanate of Oman, taxation of such dividends in Oman will result in a tax of less than 10 (ten) per cent of the gross amount of the dividends, the Netherlands may levy a tax not exceeding 10 (ten) per cent of the gross amount of the dividends. 

9.  However, the provisions under paragraph 8 shall not apply if the dividends are paid by a company which is a resident of the Netherlands and the beneficial owner of the dividends is a company resident in the Sultanate of Oman and either:

a.  the capital of the company receiving the dividends is exclusively beneficially owned by the Government of Oman or any political subdivision or local authority thereof; or 

b.  shares in the company receiving the dividends are regularly traded on the Stock Exchange of Oman; or 

c.  the company receiving the dividends is engaged in an active trade or business in Oman. 

10.  In the case a company does not fulfil one of the conditions laid down in paragraph 9, the provisions under paragraph 8 shall also not apply with respect to such company if it is determined by mutual agreement between the competent authorities of the Contracting States, in conformity with Article 25 of the Agreement, that such company is not established or maintained in the Sultanate of Oman mainly for the purpose of ensuring the benefits of subparagraph a) of paragraph 2 and provided that the company receiving the dividends is a resident of the Sultanate of Oman and the beneficial owner of the dividends. 

Protocol:

XII. Ad Article 10

It is understood that in the Netherlands the term “founders’ shares” means shares that are issued as remuneration for services rendered by founders during the constitution of a company and do not represent capital of the company.

XIII. Ad Articles 10 and 13

a. It is understood that income received by individuals in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated in the Netherlands as income from shares and not as capital gains.

b. The provisions of paragraphs 1, 2 and 7 of Article 10 and paragraph 4 of Article 13 of this Agreement shall not prevent the Netherlands from applying its domestic law in case a so-called preserving tax assessment (“conserverende aanslag”) has been issued to an individual insofar it concerns a substantial interest, according to Netherlands tax legislation, in a company which is resident in the Netherlands. The aforementioned shall only apply insofar the assessment or a part of the assessment is still outstanding.