ARTICLE 10

Dividends

1. Dividends paid by 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 payor is 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) 15 percent of the gross amount of the dividends if the beneficial owner is a company which owns at least 10 percent of the voting stock of the company paying the dividends;

b) 20 percent of the gross amount of the dividends in all other cases. Subparagraph b) and not subparagraph a) shall apply in the case of dividends paid by a United States person that is a Regulated Investment Company or by a Turkish person that is a Securities Investment Corporation or a Securities Investment Fund. Subparagraph a) shall not apply to dividends paid by a United States person that is a Real Estate Investment Trust or a Turkish person that is a Real Estate Investment Corporation or a Real Estate Investment Fund, and subparagraph b) shall apply only if the dividend is beneficially owned by an individual holding a less than 10 percent interest in the Real Estate Investment Trust, Real Estate Investment Corporation, or Real Estate Investment Fund; otherwise, the rate of tax applicable under domestic law shall apply.

3. The term "dividend" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, founders shares or other rights (not being debt-claims) participating in profits, income from other corporate rights that are subjected to the same taxation treatment as income from shares by the taxation laws of the State of which the company making the distribution is resident; and income from arrangements, including instruments denominated as debt-claims, that carry the right to participate in, or are determined by reference to, profits, to the extent so characterized under the laws of the Contracting State in which the income arises.

4. a) Profits attributable to a permanent establishment located in Turkey, through which a company that is a resident of the United States carries on business, after having been taxed under other provisions of this Agreement, may be taxed on the remaining amount in Turkey in accordance with its law.

b) A corporation which is a resident of Turkey and which has a permanent establishment in the United States or which is subject to tax in the United States on a net basis on its income that may be taxed in the United States under Article 6 (Income from Immovable

Property (Real Property)) or under paragraph 1 of Article 13 (Gains) may be subject in the United States to a tax in addition to the tax allowable under the other provisions of this Agreement. Such tax, however, may be imposed only on the portion of the business profits of the corporation attributable to the permanent establishment, and the portion of the income of the corporation referred to in the preceding sentence that is subject to tax under Article 6 or under paragraph 1 of Article 13 that represents the dividend equivalent amount of such profits and income. The taxes referred to in this paragraph shall not be imposed at a rate exceeding the rate specified in subparagraph a) of paragraph 2 of this Article.

5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the dividends, being a resident of one of the Contracting States, 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, in the case of a resident of Turkey, performs in the United States independent personal services from a fixed base situated in the United States, and the dividends are attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 ( Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.

6. 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.