Article 15 (Independent Personal Services). as the case may be. If

the recipient of the dividend is a citizen or resident of the source

Contracting State, that Contracting State may tax the recipient without regard to this Article because of the saving clause of paragraph (3) of Article 6 (General Rules of Taxation).

Paragraph (5) provides that the term "dividends" as used in the Convention means income from shares, 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 corporation making the dis­ tribution is a resident.

Paragraph (6) relates to the Philippine branch profits tax. Under section 24(b)(2) of the Philippine Code. the Philippines imposes a tax of 20 percent upon profits which are remitted outside the Philippines by a Philippine branch office to its mother company. Paragraph (6) preserves the right of the Philippines to impose such a branch profits tax by providing that nothing in the Convention will be construed to prevent the Philippines from imposing on the earnings of a corporation (other tha?l a Philippine corporation) attributable to a permanent establishment in the Philippines. a tax in addition to the tax which would be chargeable on the earnings of a Philippine corporation. &!ch Philippine branch profits tax will not exceed 20 percent of the amount of such earnings which have not been subjected to such additional tax in previous taxable years. and in accordance with Philippine law, will only be imposed when such earn­ ings are r�mitted outside the Philippines. The term "earnings" means. for purposes of paragraph (6 ), business profits attributable to a permanent establishment for the year in issue and all previous years after deducting therefrom all Philippine tax imposed thereon other than the Philippine branch profits tax.