International Tax Agreements Act 1953

International Tax Agreements Act 1953

Act No. 82 of 1953 as amended

This compilation was prepared on 27 November 2008

taking into account amendments up to Act No. 117 of 2008

Volume 1 includes: Sections 1–24

Schedules 1–24

The text of any of those amendments not in force

on that date is appended in the Notes section

The operation of amendments that have been incorporated may be

affected by application provisions that are set out in the Notes section

Volume 2 includes: Schedules 25–47

Note 1

Table of Acts

Act Notes

Table of Amendments

Table A

Prepared by the Office of Legislative Drafting and Publishing,

Attorney-General’s Department, Canberra

International Tax Agreements Act 1953 iii

Contents 1 Short title [see Note 1] ....................................................................... 1 2 Commencement [see Note 1]............................................................. 1 3 Interpretation ..................................................................................... 1 3AA Source of income from funds management activities ...................... 16 3A Alienation of real property through interposed entities ................... 17 4 Incorporation of Assessment Act ..................................................... 18 4AA Incorporation of Fringe Benefits Tax Assessment Act .................... 18 4A Treasurer to notify entry into force of agreements, exchanges

of letters under agreements etc. ....................................................... 18 5 The 2003 United Kingdom convention............................................ 19 5A Previous United Kingdom agreements etc. ...................................... 19 6 Convention with United States of America ..................................... 19 6AA Protocol with the United States of America .................................... 20 6A Convention with Canada ................................................................. 20 6AB Protocol with Canada ...................................................................... 21 6B Agreement with New Zealand ......................................................... 21 6C New Zealand protocol ..................................................................... 22 7 Agreement with Singapore .............................................................. 22 7A Protocol with Singapore .................................................................. 22 8 Convention with Japan .................................................................... 22 9 The 2006 French convention ........................................................... 23 9A Previous French agreements etc. ..................................................... 23 10 Airline profits agreement with Italy ................................................. 23 10A Convention with Italy ...................................................................... 23 11 Agreement with the Federal Republic of Germany ......................... 24 11A Agreement with the Kingdom of the Netherlands ........................... 24 11AA Second protocol with the Kingdom of the Netherlands ................... 25 11B Airline profits agreement with the Hellenic Republic ..................... 25 11C Agreement with the Kingdom of Belgium ....................................... 25 11CA Protocol with the Kingdom of Belgium ........................................... 26 11D Agreement with the Republic of the Philippines ............................. 26 11E Agreement with the Swiss Federal Council ..................................... 26 11F Agreement with Malaysia ................................................................ 27 11FA First protocol with Malaysia ............................................................ 27 11FB Second protocol with Malaysia ....................................................... 28 11G Agreement with Sweden .................................................................. 28 11H Agreement with the Kingdom of Denmark ..................................... 28 11K Agreement with Ireland ................................................................... 29 11L Convention with the Republic of Korea .......................................... 29 11M The 2006 Norwegian convention ..................................................... 30 11MA The 1982 Norwegian convention ..................................................... 30

iv International Tax Agreements Act 1953

11N Agreement with Malta ..................................................................... 30 11P The 2006 Finnish agreement ........................................................... 30 11PA Previous Finnish agreements etc. .................................................... 31 11Q Airline profits agreement with the People’s Republic of

China ............................................................................................... 31 11R Agreement with the Republic of Austria ......................................... 31 11S Agreement with the People’s Republic of China ............................. 31 11T Agreement with the Independent State of Papua New Guinea ........ 32 11U Agreement with Thailand ................................................................ 32 11V Agreement with Sri Lanka ............................................................... 32 11W Agreement with Fiji ......................................................................... 32 11X Agreement with the Republic of Hungary ....................................... 33 11Y Agreement with Kiribati .................................................................. 33 11Z Agreement with the Republic of India ............................................. 33 11ZA Agreement with the Republic of Poland .......................................... 33 11ZB Agreement with the Republic of Indonesia ..................................... 33 11ZC Agreement with the Socialist Republic of Vietnam ......................... 34 11ZCA Exchange of Notes between Australia and the Socialist

Republic of Vietnam ........................................................................ 34 11ZD Agreement with the Kingdom of Spain ........................................... 34 11ZE Agreement with the Czech Republic ............................................... 34 11ZF Agreement with Taipei Economic and Cultural Office ................... 34 11ZG Agreement with the Republic of South Africa ................................. 36 11ZGA Protocol with the Republic of South Africa ..................................... 36 11ZH Agreement with the Slovak Republic .............................................. 36 11ZI Argentine agreement ....................................................................... 36 11ZJ Agreement with Romania ................................................................ 37 11ZK Agreement with Russia .................................................................... 37 11ZL Agreement with Mexico .................................................................. 37 16 Rebates of excess tax on income included in assessable

income ............................................................................................. 37 17A Withholding tax ............................................................................... 38 18 Source of dividends ......................................................................... 39 20 Collection of tax due to the United States of America ..................... 39 21 Regulations ...................................................................................... 40 22 Application of this Act .................................................................... 41 23 Gathering and exchanging information ........................................... 41 24 Relief from double taxation where profits adjusted ......................... 42

International Tax Agreements Act 1953 v

Schedules 43

Schedule 1—2003 United Kingdom convention and notes 43

Schedule 2—Convention between the Government of Australia

and the Government of the United States of America

for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to Taxes on

Income 107

Schedule 2A—United States protocol 135

Schedule 3—Convention between Australia and Canada for the

Avoidance of Double Taxation and the Prevention of

Fiscal Evasion with respect to Taxes on Income 164

Schedule 3A—Canadian protocol 185

Schedule 4—Agreement between the Government of Australia

and the Government of New Zealand for the



Schedule 4A—The New Zealand protocol 224

Schedule 5—Agreement between the Government of the

Commonwealth of Australia and the Government of

the Republic of Singapore for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income 231

Schedule 5A—Protocol amending the Agreement between the

Government of the Commonwealth of Australia and

the Government of the Republic of Singapore for the



Schedule 6—Convention between Australia and Japan for the

avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income 264

Schedule 8—Agreement between the Government of the

Commonwealth of Australia and the Government of

Italy for the Avoidance of Double Taxation of Income

derived from International Air Transport 319

vi International Tax Agreements Act 1953

Schedule 9—The Commonwealth of Australia and the Federal

Republic of Germany 323

Schedule 10—Agreement between Australia and the Kingdom

of the Netherlands for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income 344

Schedule 10A—Second Protocol amending the Agreement

between Australia and the Kingdom of the

Netherlands for the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with respect to Taxes

on Income with Protocol 367

Schedule 11—2006 French convention 370


and the Government of the Hellenic Republic for the

Avoidance of Double Taxation of Income derived from

International Air Transport 419

Schedule 13—Agreement between Australia and the Kingdom

of Belgium for the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with respect to Taxes

on Income 422

Schedule 13A—Protocol amending the Agreement between

Australia and the Kingdom of Belgium for the


Fiscal Evasion with respect to Taxes on Income signed

at Canberra on 13 October 1977 445


and the Government of the Republic of the Philippines

for the Avoidance of Double Taxation and the


Income 448

Schedule 15—Agreement between Australia and Switzerland

for the Avoidance of Double Taxation with respect to

Taxes on Income 472

International Tax Agreements Act 1953 vii


and the Government of Malaysia for the Avoidance of

Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income 493

Schedule 16A—Malaysian protocol 517

Schedule 16B—second Malaysian protocol 528


and the Government of Sweden for the Avoidance of


with respect to Taxes on Income 536


and the Government of the Kingdom of Denmark for

the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with respect to Taxes on Income 558


and the Government of Ireland for the Avoidance of


with respect to Taxes on Income and Capital Gains 580

Schedule 21—Convention between Australia and the Republic

of Italy for the Avoidance of Double Taxation and the


Income 604

Schedule 22—Convention between the Government of

Australia and the Government of the Republic of

Korea for the Avoidance of Double Taxation and the


Income 627

Schedule 23—2006 Norwegian convention 652

Schedule 24—Agreement between Australia and Malta for the



International Tax Agreements Act 1953 1

An Act to give the force of Law to certain

Conventions and Agreements with respect to Taxes

on Income and Fringe Benefits, and for purposes

incidental thereto

1 Short title [see Note 1]

This Act may be cited as the International Tax Agreements Act

1953.

2 Commencement [see Note 1]

This Act shall come into operation on the day on which it receives

the Royal Assent.

3 Interpretation

(1) In this Act, unless the contrary intention appears:

agreement means:

(a) a convention or agreement a copy of which is set out in a

Schedule to this Act; or

(b) the 1946 United Kingdom agreement; or

(ba) the 1967 United Kingdom agreement; or

(bb) the 1967 United Kingdom agreement as amended by the

1980 Protocol to the 1967 United Kingdom agreement; or

(bc) the 1969 French airline profits agreement; or

(bd) the 1976 French agreement; or

(be) the 1976 French agreement as amended by the 1989 French

protocol; or

(c) the 1960 New Zealand agreement; or

(ca) the 1972 New Zealand agreement; or

(cb) the 1982 Norwegian convention; or

(cc) the 1984 Finnish agreement; or

(cd) the 1984 Finnish agreement as amended by the 1997 Finnish

protocol; or

(d) the previous Canadian agreement; or

Section 3

2 International Tax Agreements Act 1953

(e) the previous United States convention; or

(f) the 1969 Japanese agreement.

Australian tax means:

(a) income tax imposed as such by an Act; or

(b) fringe benefits tax imposed by the Fringe Benefits Tax Act

1986.

calendar year means a year commencing on 1 January.

foreign tax means tax, other than Australian tax, which is the

subject of an agreement.

prescribed trust estate, in relation to a year of income, means a

trust estate that:

(a) is a corporate unit trust, within the meaning of Division 6B of

Part III of the Assessment Act, in relation to the year of

income; or

(b) is a public trading trust, within the meaning of Division 6C of

Part III of the Assessment Act, in relation to the year of

income.

the 1946 United Kingdom agreement means the Agreement

between the Government of Australia and the Government of the

United Kingdom for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income that

was signed at London on 29 October 1946.

the 1967 United Kingdom agreement means the Agreement

between the Government of the Commonwealth of Australia and

the Government of the United Kingdom of Great Britain and

Northern Ireland for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income and

capital gains that was signed at Canberra on 7 December 1967.

the 1969 French airline profits agreement means the Agreement


French Republic for the avoidance of double taxation of income

derived from international air transport that was signed at Canberra

on 27 March 1969.

the 1969 Japanese agreement means the Agreement between the

Government of the Commonwealth of Australia and the

Section 3


Government of Japan for the avoidance of double taxation and the


the protocol to that agreement, being the agreement and protocol

that was signed at Canberra on 20 March 1969.

the 1976 French agreement means the Agreement between the

Government of Australia and the Government of the French

Republic for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income that was signed at

Canberra on 13 April 1976.

the 1980 Protocol to the 1967 United Kingdom agreement means

the Protocol, signed at Canberra on 29 January 1980, between the

Government of the Commonwealth of Australia and the

Government of the United Kingdom of Great Britain and Northern

Ireland amending the 1967 United Kingdom agreement.

the 1982 Norwegian convention means the Convention between

Australia and the Kingdom of Norway for the avoidance of double

taxation and the prevention of fiscal evasion with respect to taxes

on income and on capital and the protocol to that convention, being

the convention and protocol that were signed at Canberra on 6 May

1982.

the 1984 Finnish agreement means the Agreement between

Australia and Finland for the avoidance of double taxation and the


the protocol to that agreement, being the agreement and protocol

that were signed at Canberra on 12 September 1984.

the 1989 French protocol means the Protocol, signed at Paris on

19 June 1989, between the Government of Australia and the

Government of the French Republic amending the 1976 French

agreement.

the 1997 Finnish protocol means the Protocol, signed at Canberra

on 5 November 1997, between Australia and Finland amending the

1984 Finnish agreement.

the 2003 United Kingdom convention means the Convention


United Kingdom of Great Britain and Northern Ireland for the

avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income and on capital gains, as affected by

Section 3


the 2003 United Kingdom notes. A copy of the convention and of

the notes is set out in Schedule 1.

the 2003 United Kingdom notes means the exchange of notes


United Kingdom of Great Britain and Northern Ireland in

connection with the 2003 United Kingdom convention that was

carried out at Canberra on 21 August 2003. A copy of the notes is

set out in Schedule 1.

the 2006 Finnish agreement means the Agreement between the

Government of Australia and the Government of Finland for the

avoidance of double taxation with respect to taxes on income and

the prevention of fiscal evasion and the protocol to that agreement,

being the agreement and protocol a copy of each of which in the

English language is set out in Schedule 25.

the 2006 French convention means the Convention between the

Government of Australia and the Government of the French

Republic for the avoidance of double taxation with respect to taxes

on income and the prevention of fiscal evasion and the protocol to

that convention, being the convention and protocol a copy of each

of which in the English language is set out in Schedule 11.

the 2006 Norwegian convention means the Convention between

Australia and the Kingdom of Norway for the avoidance of double

taxation with respect to taxes on income and the prevention of

fiscal evasion, being the convention a copy of which is set out in

Schedule 23.

the 2008 Japanese convention means the Convention between

Australia and Japan for the avoidance of double taxation and the


the protocol to that convention, being the convention and protocol

a copy of each of which in the English language is set out in

Schedule 6.

the Argentine agreement means the Agreement between the

Government of Australia and the Government of the Argentine

Republic for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income and the protocol

to that agreement, being the agreement and protocol a copy of each


Section 3


the Assessment Act means the Income Tax Assessment Act 1936 or

the Income Tax Assessment Act 1997.

the Austrian agreement means the Agreement between Australia

and the Republic of Austria for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on

income, being the agreement a copy of which in the English

language is set out in Schedule 27.

the Belgian agreement means the Agreement between Australia

and the Kingdom of Belgium for the avoidance of double taxation


income (being the agreement a copy of which in the English

language is set out in Schedule 13), as amended by the Belgian

protocol.

the Belgian protocol means the Protocol amending the Agreement

between Australia and the Kingdom of Belgium for the avoidance

of double taxation and the prevention of fiscal evasion with respect

to taxes on income, being the protocol a copy of which in the

English language is set out in Schedule 13A.

the Canadian convention means the Convention between the

Government of Australia and the Government of Canada for the


with respect to taxes on income, being the convention a copy of

which in the English language is set out in Schedule 3, as amended

by the Canadian protocol.

the Canadian protocol means the Protocol amending the

Convention between the Government of Australia and the

Government of Canada for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income,

being the protocol a copy of which in the English language is set

out in Schedule 3A.

the Chinese agreement means the Agreement between the

Government of Australia and the Government of the People’s

Republic of China for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income, being

the agreement a copy of which in the English language is set out in

Schedule 28.

Section 3


the Chinese airline profits agreement means the Agreement


People’s Republic of China for the avoidance of double taxation of

income and revenues derived by air transport enterprises from

international air transport, being the agreement a copy of which in

the English language is set out in Schedule 26.

the Czech agreement means the Agreement between Australia and

the Czech Republic for the avoidance of double taxation and the



Schedule 40.

the Danish agreement means the Agreement between the

Government of Australia and the Government of the Kingdom of

Denmark for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income, being the

agreement a copy of which is set out in Schedule 18.

the Fijian agreement means the Agreement between Australia and

Fiji for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income, being the agreement

a copy of which is set out in Schedule 32.

the first Malaysian protocol means the Protocol, signed 2 August

1999, amending the Agreement between Australia and Malaysia

for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, being the protocol a copy

of which in the English language is set out in Schedule 16A.

the German agreement means the Agreement between the

Government of Australia and the Government of the Federal

Republic of Germany for the avoidance of double taxation and the


capital and to certain other taxes and the protocol to that

agreement, being the agreement and protocol a copy of each of

which in the English language is set out in Schedule 9.

the Greek airline profits agreement means the Agreement between

the Government of Australia and the Government of the Hellenic

Republic for the avoidance of double taxation of income derived

from international air transport, being the agreement a copy of

which is set out in the English language in Schedule 12.

Section 3


the Hungarian agreement means the Agreement between

Australia and the Republic of Hungary for the avoidance of double

taxation and the prevention of fiscal evasion with respect to taxes

on income, being the agreement a copy of which in the English

language is set out in Schedule 33.

the Indian agreement means the Agreement between the

Government of Australia and the Government of the Republic of

India for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income, being the agreement

a copy of which in the English language is set out in Schedule 35.

the Indonesian agreement means the Agreement between the


Indonesia for the avoidance of double taxation and the prevention



the Irish agreement means the Agreement between the

Government of Australia and the Government of Ireland for the


with respect to taxes on income and capital gains, being the


the Italian airline profits agreement means the Agreement

between the Government of Australia and the Government of Italy

for the avoidance of double taxation of income derived from

international air transport, being the agreement a copy of which in

the English language is set out in Schedule 8.

the Italian convention means the Convention between Australia

and the Republic of Italy for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income

and the protocol to that convention, being the convention and

protocol a copy of each of which in the English language is set out

in Schedule 21.

the Kiribati agreement means the Agreement between Australia

and the Republic of Kiribati for the avoidance of double taxation


income, being the agreement a copy of which is set out in

Schedule 34.

Section 3


the Korean convention means the Convention between the


Korea for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income and the protocol to

that convention, being the convention and protocol a copy of each


the Malaysian agreement means the Agreement between Australia

and Malaysia for the avoidance of double taxation and the


the agreement a copy of which is set out in the English language in

Schedule 16, as amended by the first and second Malaysian

protocols.

the Maltese agreement means the Agreement between Australia

and Malta for the avoidance of double taxation and the prevention



the Mexican agreement means the Agreement between the

Government of Australia and the Government of the United

Mexican States for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income as

affected by the protocol to that agreement. A copy of the

agreement, and of the protocol, in the English language is set out in

Schedule 47.

the Netherlands agreement means the Agreement between the

Government of Australia and the Government of the Kingdom of

the Netherlands for the avoidance of double taxation and the


the protocol to that agreement, being the agreement and protocol a

copy of each of which in the English language is set out in

Schedule 10, as amended by the second Netherlands protocol.

the 1960 New Zealand agreement means the Agreement between

the Government of Australia and the Government of New Zealand


evasion with respect to taxes on income that was signed at

Canberra on 12 May 1960.

the 1972 New Zealand agreement means the Agreement between

the Government of Australia and the Government of New Zealand


Section 3


evasion with respect to taxes on income that was signed at

Melbourne on 8 November 1972.

the New Zealand agreement means the Agreement between the

Government of Australia and the Government of New Zealand for

the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, being the agreement a

copy of which is set out in Schedule 4, as amended by the New

Zealand protocol.

the New Zealand protocol means the Protocol amending the

Agreement between the Government of Australia and the

Government of New Zealand for the avoidance of double taxation


income. A copy of the protocol is set out in Schedule 4A.

the Papua New Guinea agreement means the Agreement between

Australia and the Independent State of Papua New Guinea for the


with respect to taxes on income, being the agreement a copy of

which is set out in Schedule 29.

the Philippine agreement means the Agreement between the


the Philippines for the avoidance of double taxation and the


the agreement a copy of which is set out in Schedule 14.

the Polish agreement means the Agreement between Australia and

the Republic of Poland for the avoidance of double taxation and


being the agreement a copy of which in the English language is set

out in Schedule 36.

the previous Canadian agreement means the Agreement between

the Government of Australia and the Government of Canada for


evasion with respect to taxes on income that was signed at Mont

Tremblant on 1 October 1957.

the previous United States convention means the Convention


United States of America for the avoidance of double taxation and

Section 3


the prevention of fiscal evasion with respect to taxes on income

that was signed at Washington on 14 May 1953.

the Romanian agreement means the Agreement between Australia

and Romania for the avoidance of double taxation and the




Schedule 45.

the Russian agreement means the Agreement between the

Government of Australia and the Government of the Russian

Federation for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income and the protocol

to that agreement, being the agreement and protocol a copy of each


the second Malaysian protocol means the Protocol, signed 28 July

2002, amending the agreement between Australia and Malaysia for


evasion with respect to taxes on income, being the protocol a copy

of which in the English language is set out in Schedule 16B.

the second Netherlands protocol means the protocol a copy of

which in the English language is set out in Schedule 10A, being the

Second Protocol amending the Agreement between Australia and

the Kingdom of the Netherlands for the avoidance of double

taxation and the prevention of fiscal evasion with respect to tax on

income with Protocol.

the Singapore agreement means the Agreement between the


Singapore for the avoidance of double taxation and the prevention


agreement a copy of which is set out in Schedule 5, as amended by

the Singapore protocol.

the Singapore protocol means the Protocol amending the

Agreement between the Government of the Commonwealth of

Australia and the Government of the Republic of Singapore for the


with respect to taxes on income, being the protocol a copy of

which is set out in Schedule 5A.

Section 3


the Slovak agreement means the Agreement between Australia and

the Slovak Republic for the avoidance of double taxation and the



Schedule 43.

the South African agreement means the Agreement between the


South Africa for the avoidance of double taxation and the




Schedule 42, as amended by the South African protocol.

the South African protocol means the Protocol amending the

Agreement between the Government of Australia and the

Government of the Republic of South Africa for the avoidance of

double taxation and the prevention of fiscal evasion with respect to

taxes on income. A copy of the protocol is set out in Schedule 42A.

the Spanish agreement means the Agreement between Australia

and the Kingdom of Spain for the avoidance of double taxation and



out in Schedule 39.

the Sri Lankan agreement means the Agreement between

Australia and the Democratic Socialist Republic of Sri Lanka for


evasion with respect to taxes on income, being the agreement a

copy of which in the English language is set out in Schedule 31.

the Swedish agreement means the Agreement between the

Government of Australia and the Government of Sweden for the


with respect to taxes on income, being the agreement a copy of

which in the English language is set out in Schedule 17.

the Swiss agreement means the Agreement between the

Government of Australia and the Swiss Federal Council for the

avoidance of double taxation with respect to taxes on income and



Schedule 15.

Section 3


the Taipei agreement means:

(a) the Agreement between the Australian Commerce and

Industry Office and the Taipei Economic and Cultural Office

concerning the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income;

and

(b) the annex to that agreement;

a copy of each of which in the English language is set out in

Schedule 41.

the Thai Agreement means the Agreement between Australia and

the Kingdom of Thailand for the avoidance of double taxation and



out in Schedule 30.

the United States convention means the Convention between the

Government of Australia and the Government of the United States

of America for the avoidance of double taxation and the prevention


convention a copy of which is set out in Schedule 2, as amended by

the United States protocol.

the United States protocol means the Protocol amending the

Convention between the Government of Australia and the

Government of the United States of America for the avoidance of

double taxation and the prevention of fiscal evasion with respect to

taxes on income, being the protocol a copy of which is set out in

Schedule 2A.

the Vietnamese agreement means the Agreement between the

Government of Australia and the Government of the Socialist

Republic of Vietnam for the avoidance of double taxation and the



Schedule 38, as amended by the Vietnamese notes.

the Vietnamese notes means the Exchange of Notes between the

Government of Australia and the Government of the Socialist

Republic of Vietnam amending the Vietnamese agreement, that

was carried out on 22 November 1996. A copy of the Notes is set

out in Schedule 38A.

Section 3


(2) For the purpose of this Act and the Assessment Act, a reference in

an agreement to profits of an activity or business shall, in relation

to Australian tax, be read, where the context so permits, as a

reference to taxable income derived from that activity or business.

(2A) After the commencement of this subsection, a reference in an

agreement to income from shares, or to income from other rights

participating in profits, does not include a reference to a return on a

debt interest (as defined in Subdivision 974-B of the Income Tax

Assessment Act 1997).

(3) For the purposes of this Act, an amount of income derived by a

person, being income other than interest or royalties, shall be

deemed to be income attributable to interest or royalties, as the

case may be:

(a) if the person derived the amount of income by reason of

being beneficially entitled to an amount representing the

interest or royalties; or

(b) if the person derived the amount of income as a beneficiary

in a trust estate and the amount of income can be attributed,

directly or indirectly, to the interest or royalties or to an

amount that is to be deemed, by any application or successive

applications of this subsection, to be an amount of income

attributable to the interest or royalties.

(4) Where a beneficiary in a trust estate, other than a trust estate that is

a prescribed trust estate, in relation to the year of income, is

presently entitled to income of the trust estate, that income shall,

for the purposes of this Act, be deemed to be an amount of income

derived by the person.

(7) For the purposes of this Act, the texts in English language of the

1976 French agreement, the 2006 French convention and the 1969

Japanese Agreement shall, unless the context otherwise requires,

be construed as if:

(a) words in the singular included the plural; and

(b) words in the plural included the singular.

(7A) For the purposes of this Act, a reference in the 1969 Japanese

Agreement to an area adjacent to Australia as specified in the

Second Schedule to the Petroleum (Submerged Lands) Act

1967-1968 is to be read as including a reference to an area adjacent

Section 3


to Australia as specified in Schedule 1 to the Offshore Petroleum

and Greenhouse Gas Storage Act 2006.

(8) Where, by virtue of a provision of an agreement, the expression

royalties as used in, or in a particular provision of, that agreement

has the meaning that that expression has under the law of Australia

relating to income tax, that expression has, for the purposes of that

agreement or of that particular provision, as the case may be, the

meaning that that expression has by virtue of subsection 6 (1) of

the Assessment Act.

(9) Where, by virtue of a provision of an agreement, expressions used

in, or in a particular provision of, that agreement and not otherwise

defined for the purposes of that agreement or of that particular

provision have the meanings that those expressions have under the

law of Australia relating to income tax, subsection (8) does not

affect the interpretation of that agreement or of that particular

provision, as the case may be, in relation to the meaning of

expressions other than the expression royalties.

(10) For the purposes of this Act, Medicare levy shall be deemed to be

income tax and to be imposed as such and, unless the contrary

intention appears, references to income tax or tax shall be

construed accordingly.

(11) Where:

(a) a beneficiary of a trust estate (not being a prescribed trust

estate) who is a resident of a country with which, or with the

government of which, Australia, or the Government of

Australia, has made an agreement before the commencement

of this subsection is presently entitled, either directly or

through one or more interposed trust estates, to a share of the

income of the trust estate derived from the carrying on by the

trustee in Australia of a business through a permanent

establishment in Australia; and

Section 3


(b) under the agreement, the income is to be dealt with in

accordance with the article (in this subsection referred to as

the business profits article) of the agreement relating to the

taxing of income of an enterprise of a Contracting State

where the enterprise carries on a business in the other

Contracting State through a permanent establishment in the

other Contracting State;

for the purpose of determining whether the beneficiary’s share of

the income may be taxed in Australia in accordance with the

business profits article:

(c) the beneficiary shall be deemed to carry on in Australia,

through a permanent establishment in Australia, the business

carried on in Australia by the trustee; and

(d) the beneficiary’s share of the income shall be deemed to be

attributable to that permanent establishment.

(11A) If:

(a) the licensee of a spectrum licence (within the meaning of the

Radiocommunications Act 1992), or a person authorised

under section 68 of that Act by the licensee, derives income

from operating radiocommunications devices (within the

meaning of that Act) under the licence or from authorising

others to do so; and

(b) the licensee or authorised person is a resident of a country

(other than Australia), or a territory (other than an

Australian--controlled territory), to whose residents an

agreement applies; and

(c) under the agreement, the income is to be dealt with in

accordance with the business profits article of the agreement

referred to in paragraph 3(11)(b);

for the purpose of determining whether the income may be taxed in

Australia in accordance with the business profits article:

(d) the licensee or authorised person is taken to carry on a

business, through a permanent establishment, in Australia;

and

(e) the income is taken to be attributable to that permanent

establishment.

Section 3AA


(12) In subsections (11) and (11A):

Contracting State, in relation to an agreement, means a country

which, or the government of which, is a party to the agreement.

income includes profit.

permanent establishment in relation to an agreement, has the same

meaning as in the agreement.

3AA Source of income from funds management activities

(1) This section applies to a beneficiary of a widely held unit trust if:

(a) the beneficiary is a resident of a country (other than

Australia) for the purposes of an agreement that is given the

force of law under this Act; and

(b) the beneficiary is presently entitled, either:

(i) directly; or

(ii) indirectly through fixed entitlements in one or more

interposed trust estates (whether widely held unit trusts

or not);

to a share of the income of the widely held unit trust derived

from the carrying on by the trustee in Australia of funds

management activities through a permanent establishment in

Australia (the funds management income).

(2) In working out for the purposes of the Assessment Act whether the

funds management income of the beneficiary is attributable to

sources in Australia, these provisions (the source of income

provisions) do not apply:

(a) Article 21 of the 2003 United Kingdom convention;

(b) a corresponding provision of another agreement;

(c) subsections 11(3), 11S(2) and 11ZF(2) of this Act, and any

provision of this Act of similar effect enacted after the

commencement of this section.

(3) However, the source of income provisions do apply to the extent to

which the income derived from the carrying on by the trustee of

funds management activities is adjusted under:

(a) Article 7(2) or 9(1) of the 2003 United Kingdom convention;

or

(b) a corresponding provision of another agreement.

Section 3A


(4) In this section:

closely held has the meaning given by section 272-105 in

Schedule 2F to the Income Tax Assessment Act 1936.

funds management activities means activities carried on by:

(a) a managed investment scheme (as defined by section 9 of the

Corporations Act 2001) that is a widely held unit trust; or

(b) a managed investment scheme (as so defined) that is a unit

trust that is closely held by one or more of these:

(i) a managed investment scheme (as so defined) that is a

widely held unit trust;

(ii) a complying superannuation entity;

(iii) a life insurance company.

permanent establishment, in relation to an agreement, has the

same meaning as in the agreement.

widely held unit trust has the meaning given by section 272-105 in

Schedule 2F to the Income Tax Assessment Act 1936.

3A Alienation of real property through interposed entities

(1) This section applies if:

(a) an agreement makes provision in relation to income, profits

or gains from the alienation or disposition of shares or

comparable interests in companies, or of interests in other

entities, whose assets consist wholly or principally of real

property (within the meaning of the agreement) or other

interests in relation to land; and

(b) this Act gave that provision the force of law before 27 April

1998.

(2) For the purposes of this Act, that provision is taken to extend to the

alienation or disposition of shares or any other interests in

companies, and in any other entities, the value of whose assets is

wholly or principally attributable, whether directly, or indirectly

through one or more interposed companies or other entities, to such

real property or interests.

(3) However, subsection (2) applies only if the real property or land

concerned is situated in Australia (within the meaning of the

relevant agreement).

Section 4


(4) If, after the commencement of this section, this Act is amended so

as to give the force of law to an amendment or substitution of a

provision mentioned in subsection (1), this section ceases to apply

to that provision from the time that the amendment of the Act takes

effect.


entity has the same meaning as in the Income Tax Assessment Act

1997, but does not include an individual in his or her personal

capacity.

4 Incorporation of Assessment Act

(1) Subject to subsection (2), the Assessment Act is incorporated and

shall be read as one with this Act.

(2) The provisions of this Act have effect notwithstanding anything

inconsistent with those provisions contained in the Assessment Act

(other than Part IVA of that Act) or in an Act imposing Australian

tax.

4AA Incorporation of Fringe Benefits Tax Assessment Act

(1) Subject to subsection (2), the Fringe Benefits Tax Assessment Act

1986 is incorporated and is to be read as one with this Act.

(2) The provisions of this Act have effect in spite of anything

inconsistent with those provisions contained in the Fringe Benefits

Tax Assessment Act 1986 (other than section 67 of that Act).

4A Treasurer to notify entry into force of agreements, exchanges of

letters under agreements etc.

(1) This section applies to the following events:

(a) the entry into force of an agreement;

(b) the giving of notice of termination of an agreement;

(c) the exchange of letters under a provision of an agreement;

(d) the exchange of instruments of ratification under an

agreement;

(e) the confirmation of receipt of a notice under a provision of an

agreement;

Section 5


(f) the occurrence of any similar thing.

(2) As soon as practicable after any such event occurs, the Treasurer

must cause to be published in the Gazette a notice setting out

particulars of the event.

5 The 2003 United Kingdom convention

Subject to this Act, on and after the date of entry into force of the

2003 United Kingdom convention, the provisions of the

convention, so far as those provisions affect Australian tax, have

the force of law according to their tenor.

5A Previous United Kingdom agreements etc.

The provisions of:

(a) the 1946 United Kingdom agreement; and

(b) the 1967 United Kingdom agreement; and

(c) the 1967 United Kingdom agreement as amended by the

1980 Protocol to the 1967 United Kingdom agreement;

so far as those provisions affect Australian tax, continue to have

the force of law for tax in respect of income in relation to which

the agreements remain effective.

Note 1: Paragraph 3 of Article 29 of the 2003 United Kingdom convention preserves the operation of Article 16 of the 1967 United Kingdom agreement (which exempts from tax the income of visiting professors and teachers). This applies to individuals who are entitled to the exemption at the time when the 2003 United Kingdom convention enters into force. The exemption is preserved until the individual concerned would have ceased to be entitled to it under the 1967 United Kingdom agreement.

Note 2: Article 16 of the 1967 United Kingdom agreement is affected by Article I of the 1980 Protocol to the 1967 United Kingdom agreement.

6 Convention with United States of America

(1) Subject to this Act, on and after the date of entry into force of the

United States convention, the provisions of Articles 1 to 22

(inclusive) and Articles 24 to 29 (inclusive) of the convention, so

far as those provisions affect Australian tax, have the force of law

in relation to tax in respect of:

(a) income, being dividends, interest or royalties to which

Article 10, 11 or 12, as the case may be, of the convention

Section 6AA


applies, derived on or after the first day of the second month

following the month in which the convention enters into

force, and in relation to which the convention remains

effective; and

(b) income to which paragraph (a) does not apply, being income

of a year of income commencing on or after the first day of

the second month following the month in which the

convention enters into force, and in relation to which the

convention remains effective.

(3) The provisions of the previous United States convention, so far as

those provisions affect Australian tax, continue to have the force of

law in relation to tax in respect of income in relation to which the

convention remains effective.

(4) The provisions of the convention with the United States of

America do not have the effect of subjecting to Australian tax any

interest paid by a resident of Australia to a resident of the United

States of America that, apart from that convention, would not be

subject to Australian tax.

6AA Protocol with the United States of America


United States protocol, the provisions of the protocol, so far as

those provisions affect Australian tax, have the force of law

according to their tenor.

6A Convention with Canada


Canadian convention, the provisions of the convention, so far as

those provisions affect Australian tax, have, and shall be deemed to

have had, the force of law:

(a) in relation to withholding tax—in respect of dividends or

interest derived on or after 1 July 1975 and in relation to

which the convention remains effective; and

(b) in relation to tax other than withholding tax—in respect of

income of any year of income commencing on or after 1 July

1975 and in relation to which the convention remains

effective.

Section 6AB


(3) The provisions of the previous Canadian agreement, so far as those

provisions affect Australian tax, continue to have the force of law

in relation to tax in respect of income in relation to which the

agreement remains effective.

6AB Protocol with Canada


Canadian protocol, the provisions of the protocol, so far as those

provisions affect Australian tax, have, and are to be taken to have

had, the force of law according to their tenor.

6B Agreement with New Zealand

(1A) Subject to this Act, on and after the date of entry into force of the

New Zealand agreement, the provisions of the agreement, so far as



(1) Subject to this Act, the provisions of the 1972 New Zealand

agreement, so far as those provisions affect Australian tax,

continue to have the force of law:


interest derived on or after 1 July 1972, and in relation to

which the agreement remains effective; and


income of the year of income that commenced on 1 July

1972, or of a subsequent year of income in relation to which

the agreement remains effective.

(2) Subject to this Act, the provisions of subparagraph (b) of

paragraph (3) of Article 18 of the 1972 New Zealand agreement

continue to have the force of law for the purposes of paragraph

23(q) of the Assessment Act in relation to income of the year of

income that ended on 30 June 1972, and of the 13 years of income

immediately preceding that year of income.

(3) The provisions of the 1960 New Zealand agreement, so far as those




Section 6C


6C New Zealand protocol

Subject to this Act, on and after the date of entry into force of a

provision of the New Zealand protocol, the provision has the force

of law according to its tenor.

7 Agreement with Singapore

(1) Subject to this Act, the provisions of the Singapore agreement, so

far as those provisions affect Australian tax, have the force of law:


interest derived on or after 1 July 1969, and in relation to



income of the year of income that commences on 1 July

1969, or of a subsequent year of income in relation to which


7A Protocol with Singapore


Singapore protocol, the provisions of the protocol, so far as those

provisions affect Australian tax, have, and are to be taken to have


8 Convention with Japan


2008 Japanese convention, the provisions of the convention have

the force of law according to their tenor.

(2) The provisions of the 1969 Japanese agreement, so far as those




Note: Paragraph 5 of Article 31 of the 2008 Japanese convention preserves the operation of Article 15 of the 1969 Japanese agreement (which provides that the income received in respect of teaching or conducting research by visiting professors and teachers is exempt from tax in the country where the teaching or research activities are conducted). This applies to individuals who are entitled to the benefit at the time when the 2008 Japanese convention enters into force. The benefit is preserved until the individual concerned would have ceased to be entitled to it under the 1969 Japanese agreement.

Section 9


9 The 2006 French convention


provision of the 2006 French convention, the provision has the

force of law according to its tenor.

9A Previous French agreements etc.

The provisions of:

(a) the 1969 French airline profits agreement; and

(b) the 1976 French agreement; and

(c) the 1976 French agreement as amended by the 1989 French

protocol;




Note 1: Paragraph 3 of Article 30 of the 2006 French convention preserves the operation of Article 19 of the 1976 French agreement (which provides that the income received in respect of teaching or conducting research by visiting professors and teachers is taxed only in their home country). This applies to individuals who are entitled to the benefit at the time when the 2006 French convention enters into force. The benefit is preserved until the individual concerned would have ceased to be entitled to it under the 1976 French agreement.

Note 2: Article 19 of the 1976 French agreement is affected by Article 8 of the 1989 French protocol.

10 Airline profits agreement with Italy


Italian airline profits agreement, the provisions of the agreement,

so far as those provisions affect Australian tax, have, and shall be

deemed to have had, the force of law in relation to tax in respect of

income of the year of income that commenced on 1 July 1966, or

of a subsequent year of income in relation to which the agreement

remains effective.

10A Convention with Italy


Italian convention, the provisions of the convention, so far as those

provisions affect Australian tax, have, and shall be deemed to have

had, the force of law:

Section 11








effective.

11 Agreement with the Federal Republic of Germany


German agreement, the provisions of the agreement, so far as those








1971 and of a subsequent year of income in relation to which


(3) For the purposes of the Assessment Act, income derived by a

person who is a resident of the Federal Republic of Germany for

the purposes of the German agreement, being income that under

Articles 6 to 8 and 10 to 16 of the agreement may be taxed in

Australia, shall be deemed to be derived from sources in Australia.

11A Agreement with the Kingdom of the Netherlands


Netherlands agreement, the provisions of the agreement, so far as










Section 11AA


(3) For the purposes of the Assessment Act, income from a lease of

land, income from any other direct interest in or over land, whether

or not improved, and income from debt--claims of every kind,

excluding bonds or debentures, secured by mortgage of real

property or of any other direct interest in or over land, being

income that under Article 6 of the Netherlands agreement is to be

regarded as income from real property, shall be deemed to be

derived from sources in the place in which the land to which the

lease, other direct interest or mortgage relates is situated.

11AA Second protocol with the Kingdom of the Netherlands


second Netherlands protocol, the provisions of the protocol, so far

as those provisions affect Australian tax, have, and shall be deemed

to have had, the force of law in relation to tax in respect of:

(a) income, being income to which subparagraph (1)(a) of

Article 3 of the protocol applies, of any year of income

commencing on or after 1 July 1988; and

(b) income, being income to which subparagraph (1)(b) of

Article 3 of the protocol applies, of any year of income

commencing on or after 1 July 1986.

11B Airline profits agreement with the Hellenic Republic


Greek airline profits agreement, the provisions of the agreement, so

far as those provisions affect Australian tax, have, and shall be


income derived on or after 1 March 1972 and in relation to which


11C Agreement with the Kingdom of Belgium


Belgian agreement, the provisions of the agreement, so far as those

provisions affect Australian tax, have the force of law:


interest derived on or after 1 January in the calendar year

immediately following that in which the agreement enters

into force and in relation to which the agreement remains

effective; and

Section 11CA




in the calendar year immediately following that in which the

agreement enters into force and in relation to which the


11CA Protocol with the Kingdom of Belgium


Belgian protocol, the provisions of the protocol, so far as those

provisions affect Australian tax, have the force of law in relation to

tax in respect of income of any year of income commencing on or

after 1 July in the calendar year immediately following that in

which the protocol enters into force.

11D Agreement with the Republic of the Philippines


Philippine agreement, the provisions of the agreement, so far as




interest derived on or after 1 January in the calendar year in

which the agreement enters into force and in relation to




in the calendar year in which the agreement enters into force

and in relation to which the agreement remains effective.

11E Agreement with the Swiss Federal Council


Swiss agreement, the provisions of the agreement, so far as those




interest derived on or after 1 January 1979 and in relation to




Section 11F




11F Agreement with Malaysia


Malaysian agreement, the provisions of the agreement, so far as







income of any year of income that commenced on or after

1 July 1979 and in relation to which the agreement remains

effective.

(4) The provisions of the Malaysian agreement shall not have the

effect of subjecting to Australian tax interest or royalties paid by a

resident of Australia to a resident of Malaysia that, but for that

agreement, would not be subject to Australian tax.

11FA First protocol with Malaysia


first Malaysian protocol, the provisions of the protocol, so far as

those provisions affect Australian tax, have, and are taken to have


(2) Nothing in section 170 of the Income Tax Assessment Act 1936

prevents the amendment of an assessment made before the

commencement of this section for the purpose of giving effect to

the first Malaysian protocol.

(3) Nothing in former Division 19 of Part III of the Income Tax

Assessment Act 1936 prevents the amendment of a determination

made, or taken to have been made, under that Division before the


the first Malaysian protocol.

Section 11FB


11FB Second protocol with Malaysia


second Malaysian protocol, the provisions of that protocol, so far

as those provisions affect Australian tax, have, and are taken to

have had, the force of law according to their tenor.




the second Malaysian protocol.

(3) Nothing in former Division 19 of Part III of the Income Tax

Assessment Act 1936 prevents the amendment of a determination

made, or taken to have been made, under that Division before the


the second Malaysian protocol.

11G Agreement with Sweden


Swedish agreement, the provisions of the agreement, so far as

those provisions affect Australian tax, have the force of law:





effective; and






11H Agreement with the Kingdom of Denmark


Danish agreement, the provisions of the agreement, so far as those





Section 11K



effective; and






(3) Where an amount of tax credit is to be treated as assessable income

of a taxpayer in accordance with paragraph (7) of Article 10 of the

Danish agreement:

(a) the amount of the tax credit shall be included in the

assessable income of the taxpayer of the year of income in

which the dividend to which the tax credit relates is paid; and

(b) the amount of the tax credit shall be added to the amount of

the dividend to which the tax credit relates and the sum of the

two amounts shall be deemed to be one dividend for the

purposes of this Act and the Assessment Act.

11K Agreement with Ireland


Irish agreement, the provisions of the agreement, so far as those



interest derived on or after 1 July in the calendar year



effective; and






11L Convention with the Republic of Korea


Korean convention, the provisions of the convention, so far as



Section 11M



interest derived on or after 1 January 1982 and in relation to





effective.

11M The 2006 Norwegian convention


provision of the 2006 Norwegian convention, the provision has the


11MA The 1982 Norwegian convention

The provisions of the 1982 Norwegian convention, so far as those


for tax in respect of income in relation to which the convention

remains effective.

11N Agreement with Malta


Maltese agreement, the provisions of the agreement, so far as those




next following that in which the agreement enters into force

and in relation to which the agreement remains effective; and



in the calendar year next following that in which the



11P The 2006 Finnish agreement


provision of the 2006 Finnish agreement, the provision has the


Section 11PA


11PA Previous Finnish agreements etc.

The provisions of:

(a) the 1984 Finnish agreement; and

(b) the 1984 Finnish agreement as amended by the 1997 Finnish

protocol;




11Q Airline profits agreement with the People’s Republic of China


Chinese airline profits agreement, the provisions of the agreement,

so far as those provisions affect Australian tax, have, and shall be


income derived on or after 1 July 1984 and in relation to which the


11R Agreement with the Republic of Austria


Austrian agreement, the provisions of the agreement, so far as

those provisions affect Australian tax, have the force of law:



next following that in which the agreement enters into force

and in relation to which the agreement remains effective; and






11S Agreement with the People’s Republic of China


Chinese agreement, the provisions of the agreement, so far as those

provisions affect Australian tax, have the force of law according to

their tenor.

Section 11T


(2) For the purposes of the Assessment Act, income, profits or gains

derived by a person who is a resident of China for the purposes of

the Chinese agreement, being income, profits or gains that under

Articles 6 to 8, 10 to 17 and 19 to 22 of the agreement may be

taxed in Australia, are taken to be derived from sources in

Australia.

(3) The provisions of the Chinese agreement do not have the effect of

subjecting to Australian tax any interest or royalties paid by a

resident of Australia to a resident of China that, apart from that


11T Agreement with the Independent State of Papua New Guinea


Papua New Guinea agreement, the provisions of the agreement, so

far as those provisions affect Australian tax, have the force of law


11U Agreement with Thailand


Thai agreement, the provisions of the agreement, so far as those


their tenor.

11V Agreement with Sri Lanka


Sri Lankan agreement, the provisions of the agreement, so far as



11W Agreement with Fiji


Fijian agreement, the provisions of the agreement, so far as those


their tenor.

Section 11X


11X Agreement with the Republic of Hungary


Hungarian agreement, the provisions of the agreement, so far as



11Y Agreement with Kiribati


Kiribati agreement, the provisions of the agreement, as far as those


their tenor.

11Z Agreement with the Republic of India


Indian agreement, the provisions of the agreement, so far as those


their tenor.

11ZA Agreement with the Republic of Poland


Polish agreement, the provisions of the agreement, so far as those


their tenor.

(2) The provisions of the Polish agreement do not have the effect of


resident of Australia to a resident of Poland that, apart from that


11ZB Agreement with the Republic of Indonesia


Indonesian agreement, the provisions of the agreement, so far as



Section 11ZC


11ZC Agreement with the Socialist Republic of Vietnam


Vietnamese agreement, the provisions of the agreement, so far as



11ZCA Exchange of Notes between Australia and the Socialist

Republic of Vietnam

(1) Subject to this Act, on or after the date of entry into force of the

Vietnamese notes, the provisions of the notes, so far as those


their tenor.

(2) The Commissioner may amend an assessment made before the date

of entry into force of the Vietnamese notes for the purpose of

giving effect to subsection (1).

11ZD Agreement with the Kingdom of Spain


Spanish agreement, the provisions of the agreement, so far as those


their tenor.

11ZE Agreement with the Czech Republic


Czech agreement, the provisions of the agreement, so far as those


their tenor.

11ZF Agreement with Taipei Economic and Cultural Office

(1) Subject to this Act, on and after the date of entry into effect of the

Taipei agreement, the provisions of the agreement, so far as they

affect Australian tax, have, and are taken to have had, the force of

law according to their tenor.

(2) For the purposes of the Assessment Act, if:

(a) a person derives income, profits or gains; and

Section 11ZF


(b) for the purposes of the Taipei agreement, the person is a

resident of the foreign territory; and

(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the

agreement, the income, profits or gains may be taxed in the

Australian territory;

the income, profits or gains are taken to be derived from sources in

the Australian territory.

(3) For the purposes of the Assessment Act and Article 22 of the

Taipei agreement, if:

(a) a person derives income, profits or gains; and

(b) for the purposes of the agreement, the person is a resident of

the Australian territory; and

(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the

agreement, the income, profits or gains may be taxed in the

foreign territory;

the income, profits or gains are taken to have been derived from

sources in the foreign territory.

(4) The provisions of the Taipei agreement do not have the effect of


resident of the Australian territory to a resident of the foreign

territory that, apart from the agreement, would not be subject to

Australian tax.

(5) Section 170 of the Assessment Act does not prevent the

amendment of an assessment made before the commencement of

this section for the purpose of giving effect to the Taipei

agreement.

(6) If:

(a) an exchange of letters takes place for the purposes of

paragraph 2 of the Annex mentioned in paragraph (b) of the

definition of Taipei agreement in subsection 3(1); and

(b) as a result of the exchange, income, profits or gains derived

by an organisation before the exchange become taxable under

paragraph 2 of the Annex solely in the Australian territory or

solely in the foreign territory; and

(c) before the exchange and whether before or after the

commencement of this section, an assessment was made in

which the income, profits or gains were not taxed in that

way;

Section 11ZG


section 170 of the Assessment Act does not prevent the amendment

of the assessment for the purpose of taxing the income, profits or

gains in that way.


Australian territory means the territory mentioned in subparagraph

1(a) of Article 2 of the Taipei agreement.

foreign territory means the territory mentioned in subparagraph

1(b) of Article 2 of the Taipei agreement.

11ZG Agreement with the Republic of South Africa


South African agreement, the provisions of the agreement, so far as



11ZGA Protocol with the Republic of South Africa


South African protocol, the provisions of the protocol have the

force of law according to their tenor.

11ZH Agreement with the Slovak Republic


Slovak agreement, the provisions of the agreement so far as those


their tenor.

11ZI Argentine agreement


Argentine agreement, the provisions of the agreement, so far as

those provisions affect Australian tax, have, and are taken to have





the Argentine agreement.

Section 11ZJ


11ZJ Agreement with Romania


Romanian agreement, the provisions of the agreement, so far as



11ZK Agreement with Russia

Subject to this Act, on or after the date of entry into force of the

Russian agreement, the provisions of the agreement, so far as those


their tenor.

11ZL Agreement with Mexico


Mexican agreement, the provisions of the agreement, so far as



16 Rebates of excess tax on income included in assessable income

(1) This section applies in relation to each relevant part of a taxpayer’s

income of the year of income that consists of income in respect of

which a provision of an agreement limits the amount of Australian

tax payable.

(2) The taxpayer is entitled, in respect of each relevant part of the

taxpayer’s income of the year of income to which this section

applies, to a rebate of the amount (if any) by which the amount

ascertained in accordance with the last preceding section as the

amount of Australian tax payable in respect of that part exceeds the

limit applicable under the provisions of the agreement in relation to

that part.

(3) The rebate to which a taxpayer is entitled under this section in

respect of a relevant part of the taxpayer’s income shall be allowed

in the taxpayer’s assessment in respect of income of the year of

income in the assessable income of which that part is included.

(4) Where the taxpayer is liable to pay additional tax under section 104

of the Assessment Act in relation to the year of income referred to

Section 17A


in subsection (3), so much of the rebate as is not allowed in the

assessment referred to in that subsection shall be allowed in the

assessment of the additional tax.

(5) A rebate, or the sum of the rebates, to which, under subsection (2),

a taxpayer is entitled in respect of income of a year of income shall

not exceed the sum of:

(a) the amount of Australian tax payable in respect of the

taxpayer’s taxable income of that year of income after all

other rebates of, and deductions from, that tax have been

taken into account; and

(b) the amount, if any, of additional tax payable by the taxpayer

under section 104 of the Assessment Act in relation to that

year of income.

17A Withholding tax

(1) Where a provision of an agreement limits the amount of Australian

tax payable in respect of a dividend or a royalty, being a dividend

or a royalty in respect of which withholding tax is payable, and the

amount of that withholding tax exceeds the limit specified in the

agreement, the liability of the taxpayer for the withholding tax

shall be reduced by an amount equal to the amount of the excess.

(2) Where the liability of a taxpayer for withholding tax payable in

respect of a unit trust dividend would have been reduced in

pursuance of subsection (1) if that unit trust dividend had been a

dividend paid to the taxpayer by a company that is a resident, that

liability shall be reduced by an amount equal to the amount by

which the liability would have been reduced if the unit trust

dividend had been a dividend paid to the taxpayer by a company

that is a resident.

(3) In subsection (2):

unit trust dividend means a unit trust dividend within the meaning

of Division 6B or 6C of Part III of the Assessment Act.

(4) If:

(a) a provision (basic royalty provision) of an agreement is

covered by either of the following subparagraphs:

(i) paragraph 1 or 2 of Article 12 of the Chinese agreement;

(ii) a corresponding provision of another agreement; and

Section 18


(b) another provision of the agreement expressly excludes

particular royalties (excluded royalties) from the scope of the

basic royalty provision;

section 128B of the Assessment Act (which deals with liability for

withholding tax) does not apply to the excluded royalties.

(5) Section 128B of the Assessment Act (which deals with liability for

withholding tax) does not apply to the payment of a royalty as

defined in subsection 6(1) of that Act if:

(a) the royalty is paid to a person who is a resident of a

Contracting State or territory (other than Australia) for the

purposes of an agreement; and

(b) the agreement does not treat the amount paid as a royalty.

18 Source of dividends

(1) Where a company is not a resident of Australia but, for the

purposes of a law of a country with which, or with the government

of which, an agreement has been made (being a law which imposes

foreign tax), is resident in that other country, a dividend paid by the

company shall, for the purposes of the agreement, be deemed to be

derived from a source in that country.

(2) Subsection (1) does not limit the operation of a provision of an

agreement by virtue of which a dividend is deemed to be derived

from a source outside Australia.

20 Collection of tax due to the United States of America

(1) The purpose of this section is to enable the Government of

Australia to give effect to its obligation under paragraph (5) of

Article 25 of the United States convention and accordingly the

amounts of United States tax to which this section applies are

amounts of United States tax the collection of which is necessary

in order to ensure that the benefit of exemptions from United States

tax, or of reductions in rates of United States tax, provided for by

the convention is not received by a person not entitled to that

benefit.

(2) Where a person is liable to pay an amount of United States tax to

which this section applies, there is payable by that person to the

Commissioner as a debt due to the Queen on behalf of Australia an

amount equivalent to that amount, and the amount so payable may

Section 21


be sued for and recovered in any court of competent jurisdiction by

the Commissioner, a Second Commissioner or a Deputy

Commissioner suing in his or her official name.

(3) An amount payable to the Commissioner under the last preceding

subsection may be collected by the Commissioner under

section 218 of the Assessment Act and, for that purpose, a

reference in that section to a taxpayer shall be read as a reference

to the person by whom that amount is payable and a reference to an

amount due by a taxpayer in respect of tax shall be read as a

reference to the amount so payable.

(4) The Commissioner, a Second Commissioner or a Deputy

Commissioner may, by writing under his or her hand, certify:

(a) that, on a date specified in the certificate, a person specified

in the certificate was liable to pay an amount of United States

tax;

(b) that that amount was an amount of United States tax to which

this section applies; and

(c) that an amount specified in the certificate is an amount

equivalent to the amount of United States tax;

and such a certificate is, in all courts and for all purposes, evidence

of the matters stated in the certificate and that the person specified

in the certificate has, during the period from the date specified in

the certificate until the date of the certificate, continued to be liable

to pay the amount of United States tax.

(5) The Commissioner shall pay to the Government of the United

States of America an amount equal to any amount paid or

recovered by virtue of this section.


United States tax has the same meaning as in the United States

convention.

21 Regulations

The power to make regulations conferred by section 266 of the

Assessment Act shall be deemed to extend to the making of

regulations, not inconsistent with this Act, prescribing all matters

which by this Act are required or permitted to be prescribed, or

Section 22


which are necessary or convenient to be prescribed for carrying out

or giving effect to this Act.

22 Application of this Act

Nothing in this Act affects assessments in respect of income, or the

ascertainment of credits against tax on income, of a year of income

before the year of income that commenced on 1 July 1953.

23 Gathering and exchanging information

(1) The Commissioner or an officer authorised by the Commissioner

may use the information gathering provisions for the purpose of

gathering information to be exchanged in accordance with the

Commissioner’s obligations under an international agreement.

(2) Making a record of, and exchanging, information in accordance

with the Commissioner’s obligations under an international

agreement is not a breach of a provision of a taxation law that

prohibits the Commissioner or an officer from making a record of,

or disclosing, information.

Example: An example of such a provision is section 3C of the Taxation Administration Act 1953.

(3) Subsections (1) and (2) have effect whether or not the information

relates to Australian tax.


information gathering provision means a provision of a taxation

law that allows the Commissioner:

(a) to access land, premises, documents, information, goods or

other property; or

(b) to require or direct a person to provide information; or

(c) to require or direct a person to appear before the

Commissioner or an officer and give evidence or produce

documents.

international agreement means:

(a) an agreement given the force of law under this Act; or

(b) some other agreement that allows for the exchange of

information on tax matters between Australia and:

Section 24


(i) a foreign country or a constituent part of a foreign

country; or

(ii) an overseas territory.

taxation law has the same meaning as in the Income Tax

Assessment Act 1997.

24 Relief from double taxation where profits adjusted

Application

(1) This section applies if:

(a) Australia has an agreement with one of the following (a

treaty partner):

(i) a foreign country or a constituent part of a foreign

country;

(ii) an overseas territory; and

(b) the treaty partner taxes profits, or purports to tax profits, in

accordance with, or consistent with the principles of:

(i) if the treaty partner is the United Kingdom—Article 9

of the 2003 United Kingdom convention; or

(ii) otherwise—a corresponding provision of another

agreement.

Note: Article 9 of the 2003 United Kingdom Convention deals with associated enterprises.

Object

(2) The object of this section is to prevent double taxation of the

profits, to the extent that the Commissioner considers the taxation

of the profits by the treaty partner to be in accordance with the

agreement.

Adjustment of taxable income or tax loss

(3) The Commissioner may determine the amount of a taxpayer’s

taxable income or tax loss of a year of income to be an amount that

is appropriate having regard to the object of this section.

Note: The Commissioner may amend an assessment at any time to give effect to this section: see subsection 170(11) of the Income Tax Assessment Act 1936.

2003 United Kingdom convention and notes Schedule 1


Schedules

Schedule 1—2003 United Kingdom

convention and notes Note: See section 3.

CONVENTION BETWEEN THE GOVERNMENT OF AUSTRALIA AND

THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN

AND NORTHERN IRELAND FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS

The Government of Australia and the Government of the United

Kingdom of Great Britain and Northern Ireland,

Desiring to conclude a Convention for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income and on

capital gains,

Have agreed as follows:

ARTICLE 1

Persons covered

This Convention shall apply to persons who are residents of one or both

of the Contracting States.

Schedule 1 2003 United Kingdom convention and notes


ARTICLE 2

Taxes covered

1 The existing taxes to which this Convention shall apply are:

(a) in the case of the United Kingdom:

(i) the income tax;

(ii) the corporation tax; and

(iii) the capital gains tax;

(b) in the case of Australia:

the income tax, the resource rent tax in respect of offshore projects

relating to exploration for or exploitation of petroleum resources,

and the fringe benefits tax, imposed under the federal law of

Australia.

2 This Convention shall also apply to any identical or substantially similar

taxes which are imposed under the federal law of Australia or the law of the

United Kingdom after the date of signature of this Convention in addition to, or

in place of, the existing taxes. The competent authorities of the Contracting

States shall notify each other of any substantial changes that have been made in

the law of their respective States relating to the taxes to which this Convention

applies within a reasonable period of time after those changes.



ARTICLE 3

General definitions

1 For the purposes of this Convention, unless the context otherwise

requires:

(a) the term “United Kingdom” means Great Britain and Northern

Ireland, including any area outside the territorial sea of the United

Kingdom which in accordance with international law has been or

may hereafter be designated, under the laws of the United Kingdom

concerning the Continental Shelf, as an area within which the rights

of the United Kingdom with respect to the seabed and subsoil and

their natural resources may be exercised;

(b) the term “Australia”, when used in a geographical sense, excludes

all external territories other than:

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

(iii) the Territory of Cocos (Keeling) Islands;

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Territory of Heard Island and McDonald Islands; and

(vi) the Coral Sea Islands Territory,



and includes any area adjacent to the territorial limits of Australia

(including the Territories specified in this subparagraph) in respect

of which there is for the time being in force, consistently with

international law, a law of Australia dealing with the exploration

for or exploitation of any of the natural resources of the seabed and

subsoil of the Continental Shelf;

(c) the term “Australian tax” means tax imposed by Australia, being

tax to which this Convention applies by virtue of Article 2;

(d) the term “United Kingdom tax” means tax imposed by the United

Kingdom, being tax to which this Convention applies by virtue of

Article 2;

(e) the terms “a Contracting State” and “the other Contracting State”

mean the United Kingdom or Australia, as the context requires;

(f) the term “person” includes an individual, a company and any other

body of persons, but subject to paragraph 2 of this Article does not

include a partnership;

(g) the term “company” means any body corporate or anything that is

treated as a company or body corporate for tax purposes;

(h) the term “enterprise” applies to the carrying on of any business;

(i) the terms “enterprise of a Contracting State” and “enterprise of the

other Contracting State” mean respectively an enterprise carried on



by a resident of a Contracting State and an enterprise carried on by

a resident of the other Contracting State;

(j) the term “international traffic” means any transport by a ship or

aircraft operated by an enterprise of a Contracting State, except

when the ship or aircraft is operated solely from a place or between

places in the other Contracting State;

(k) the term “competent authority” means:

(i) in the case of the United Kingdom, the Commissioners of

Inland Revenue or their authorised representative;

(ii) in the case of Australia, the Commissioner of Taxation or an

authorised representative of the Commissioner;

(l) the term “national” means:

(i) in relation to the United Kingdom, any British citizen, or any

British subject not possessing the citizenship of any other

Commonwealth country or territory, provided that individual

has the right of abode in the United Kingdom; and any

company deriving its status as such from the law in force in

the United Kingdom;

(ii) in relation to Australia, an Australian citizen or an individual

not possessing citizenship who has been granted permanent

residency status; and any company deriving its status as such

from the law in force in Australia;



(m) the term “business” includes the performance of professional

services and of other activities of an independent character;

(n) the term “tax” means Australian tax or United Kingdom tax as the

context requires, but does not include any penalty or interest

imposed under the law of either Contracting State relating to its

tax;

(o) the term “recognised stock exchange” means:

(i) the Australian Stock Exchange and any other Australian

stock exchange recognised as such under Australian law;

(ii) the London Stock Exchange and any other United Kingdom

investment exchange recognised under United Kingdom law;

or

(iii) any other stock exchange agreed upon by the competent

authorities.

2 A partnership deriving its status from Australian law as a limited

partnership which is treated as a taxable unit under the law of Australia shall be

treated as a person for the purposes of this Convention.

3 As regards the application of this Convention at any time by a

Contracting State, any term not defined therein shall, unless the context

otherwise requires, have the meaning that it has at that time under the laws of

that State for the purposes of the taxes to which this Convention applies, any



meaning under the applicable tax laws of that State prevailing over a meaning

given to the term under other laws of that State.

ARTICLE 4

Residence

1 For the purposes of this Convention, a person is a resident of a

Contracting State:

(a) in the case of the United Kingdom, if the person is a resident of the

United Kingdom for the purposes of United Kingdom tax; and

(b) in the case of Australia, if the person is a resident of Australia for

the purposes of Australian tax.

A Contracting State or a political subdivision or local authority of that State is

also a resident of that State for the purposes of this Convention.

2 A person is not a resident of a Contracting State for the purposes of this

Convention if that person is liable to tax in that State in respect only of income

or gains from sources in that State.

3 The status of an individual who, by reason of the preceding provisions of

this Article is a resident of both Contracting States, shall be determined as

follows:

(a) that individual shall be deemed to be a resident only of the

Contracting State in which a permanent home is available to that

individual; but if a permanent home is available in both States, or



in neither of them, that individual shall be deemed to be a resident

only of the State with which the individual’s personal and

economic relations are closer (centre of vital interests);

(b) if the Contracting State in which the centre of vital interests is

situated cannot be determined, the individual shall be deemed to be

a resident only of the State of which that individual is a national;

(c) if the individual is a national of both Contracting States or of

neither of them, the competent authorities of the Contracting States

shall endeavour to resolve the question by mutual agreement.

4 Where by reason of the preceding provisions of this Article a person

other than an individual is a resident of both Contracting States, then it shall be

deemed to be a resident only of the State in which its place of effective

management is situated.

5 Notwithstanding paragraph 4 of this Article, where by reason of

paragraph 1 of this Article a company, which is a participant in a dual listed

company arrangement, is a resident of both Contracting States then it shall be

deemed to be a resident only of the Contracting State in which it is

incorporated, provided it has its primary stock exchange listing in that State.

6 The term “dual listed company arrangement” as used in this Article

means an arrangement pursuant to which two publicly listed companies, while

maintaining their separate legal entity status, shareholdings and listings, align

their strategic directions and the economic interests of their respective

shareholders through:



(a) the appointment of common (or almost identical) boards of

directors;

(b) management of the operations of the two companies on a unified

basis;

(c) equalised distributions to shareholders in accordance with an

equalisation ratio applying between the two companies, including

in the event of a winding up of one or both of the companies;

(d) the shareholders of both companies voting in effect as a single

decision-making body on substantial issues affecting their

combined interests; and

(e) cross-guarantees as to, or similar financial support for, each other’s

material obligations or operations, except where the effect of the

relevant regulatory requirements prevents such guarantees or

financial support.

ARTICLE 5

Permanent establishment

1 For the purposes of this Convention, the term “permanent establishment”

means a fixed place of business through which the business of an enterprise is

wholly or partly carried on.

2 The term “permanent establishment” includes especially:



(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place relating to the

exploration for or exploitation of natural resources; and

(g) an agricultural, pastoral or forestry property.

3 An enterprise shall be deemed to have a permanent establishment in a

Contracting State and to carry on business through that permanent

establishment if:

(a) it has a building site or construction or installation project in that

State, or it undertakes a supervisory or consultancy activity in that

State connected with such a site or project, but only if that site,

project or activity lasts more than 12 months;

(b) it maintains substantial equipment for rental or other purposes

within that other State (excluding equipment let under a

hire-purchase agreement) for a period of more than 12 months; or

(c) a person acting in a Contracting State on behalf of an enterprise of

the other Contracting State manufactures or processes in the



first-mentioned State for the enterprise goods or merchandise

belonging to the enterprise.

4 (a) The duration of activities under subparagraph (a) of paragraph 3

will be determined by aggregating the periods during which activities are

carried on in a Contracting State by associated enterprises provided that the

activities of the enterprise in that State are connected with the activities carried

on in that State by its associate.

(b) The period during which two or more associated enterprises are

carrying on concurrent activities will be counted only once for the purpose of

determining the duration of activities.

(c) Under this Article, an enterprise shall be deemed to be associated

with another enterprise if:

(i) one is controlled directly or indirectly by the other; or

(ii) both are controlled directly or indirectly by a third person or

persons.

5 Notwithstanding the preceding provisions of this Article, an enterprise

shall not be deemed to have a permanent establishment merely by reason of:

(a) the use of facilities solely for the purpose of storage, display or

delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of storage, display or delivery;



(c) the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of processing by another

enterprise;

(d) the maintenance of a fixed place of business solely for the purpose

of purchasing goods or merchandise, or collecting information, for

the enterprise; or

(e) the maintenance of a fixed place of business solely for the purpose

of carrying on, for the enterprise, any other activity of a preparatory

or auxiliary character.

6 Notwithstanding the provisions of paragraphs 1 and 2 of this Article,

where a person - other than an agent of an independent status to whom

paragraph 7 of this Article applies - is acting on behalf of an enterprise and has,

and habitually exercises, in a Contracting State an authority to conclude

contracts on behalf of the enterprise, that enterprise shall be deemed to have a

permanent establishment in that State in respect of any activities which that

person undertakes for that enterprise unless the activities of such person are

limited to those mentioned in paragraph 5 of this Article which, if exercised

through a fixed place of business, would not make this fixed place of business a

permanent establishment under the provisions of that paragraph.

7 An enterprise shall not be deemed to have a permanent establishment in a

Contracting State merely because it carries on business in that State through a

broker, general commission agent or any other agent of an independent status,

provided that such brokers or agents are acting in the ordinary course of their

business as such.



8 The fact that a company which is a resident of a Contracting State

controls or is controlled by a company which is a resident of the other

Contracting State, or which carries on business in that other State (whether

through a permanent establishment or otherwise), shall not of itself make either

company a permanent establishment of the other.

ARTICLE 6

Income from real property

1 Income derived by a resident of a Contracting State from real property

may be taxed in the Contracting State in which the real property is situated.

2 The term “real property” shall have the meaning which it has under the

law of the Contracting State in which the property is situated. The term shall in

any case include:

(a) a lease of land or any other interest in or over land;

(b) property accessory to real property;

(c) livestock and equipment used in agriculture and forestry;

(d) usufruct of real property;

(e) a right to explore for mineral, oil or gas deposits or other natural

resources, and a right to mine those deposits or resources; and



(f) a right to receive variable or fixed payments either as consideration

for or in respect of the exploitation of, or the right to explore or

exploit, mineral, oil or gas deposits, quarries or other places of

extraction or exploitation of natural resources.

Ships and aircraft shall not be regarded as real property.

3 Any interest or right referred to in paragraph 2 shall be regarded as

situated where the land, mineral, oil or gas deposits, quarries or natural

resources, as the case may be, are situated or where the exploration may take

place.

4 The provisions of paragraph 1 of this Article shall apply to income

derived from the direct use, letting, or use in any other form of real property.

5 The provisions of paragraphs 1, 3 and 4 of this Article shall also apply to

the income from real property of an enterprise.

ARTICLE 7

Business profits

1 The profits of an enterprise of a Contracting State shall be taxable only in

that State unless the enterprise carries on business in the other Contracting State

through a permanent establishment situated in that other State. If the enterprise

carries on business in that manner, the profits of the enterprise may be taxed in

the other State but only so much of them as is attributable to that permanent

establishment.



2 Subject to the provisions of paragraph 3 of this Article, where an

enterprise of a Contracting State carries on business in the other Contracting

State through a permanent establishment situated in that other State, there shall

in each Contracting State be attributed to that permanent establishment the

profits which it might be expected to make if it were a distinct and separate

enterprise engaged in the same or similar activities under the same or similar

conditions and dealing wholly independently with the enterprise of which it is a

permanent establishment or with other enterprises.

3 In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses of the enterprise, being expenses which are

incurred for the purposes of the permanent establishment, including executive

and general administrative expenses so incurred, whether in the Contracting

State in which the permanent establishment is situated or elsewhere.

4 Nothing in this Article shall affect the application of any law of a

Contracting State relating to the determination of the tax liability of a person in

cases where the information available to the competent authority of that State is

inadequate to determine the profits to be attributed to a permanent

establishment. In such cases that law shall be applied, having regard to the

information that is available, consistently with the principles of this Article.

5 No profits shall be attributed to a permanent establishment by reason of

the mere purchase by that permanent establishment of goods or merchandise for

the enterprise.

6 Where profits include items of income or gains which are dealt with

separately in other Articles of this Convention, then the provisions of those

Articles shall not be affected by the provisions of this Article.



7 Nothing in this Article shall affect the operation of any law of a

Contracting State relating to tax imposed on profits from insurance with

non-residents provided that if the relevant law in force in either Contracting

State at the date of signature of this Convention is varied (otherwise than in

minor respects so as not to affect its general character) the Contracting States

shall consult with each other with a view to agreeing to any amendment of this

paragraph that may be appropriate.

ARTICLE 8

Shipping and air transport

1 Profits of an enterprise of a Contracting State from the operation of ships

or aircraft in international traffic shall be taxable only in that State.

2 Notwithstanding the provisions of paragraph 1 of this Article, profits of

an enterprise of a Contracting State from the operation of ships or aircraft may

be taxed in the other Contracting State to the extent that they are profits derived

from ship or aircraft operations confined solely to places in that other State.

3 For the purposes of this Article, profits from the operation of ships or

aircraft in international traffic include:

(a) profits from the rental on a bareboat basis of ships or aircraft; and

(b) profits from the use, maintenance or rental of containers (including

trailers and related equipment for the transport of containers) used

for the transport of goods or merchandise;



provided such rental or such use, maintenance or rental, as the case may be, is

directly connected or ancillary to the operation of ships or aircraft in

international traffic.

4 The provisions of paragraphs 1 and 2 of this Article shall also apply to

profits from the participation in a pool, a joint business or an international

operating agency, but only to so much of the profits so derived as is attributable

to the participant in proportion to its share in the joint operation.

5 For the purposes of this Article, profits derived from:

(a) the carriage by ships or aircraft of passengers, livestock, mail,

goods or merchandise which are shipped in a Contracting State and

are discharged at the same or another place in that State; or

(b) the use of a ship or aircraft for haulage, survey or dredging

activities, or for exploration or extraction activities in relation to

natural resources, where such activities are undertaken in a

Contracting State;

shall be treated as profits from ship or aircraft operations confined solely to

places in that State.

ARTICLE 9

Associated enterprises

1 Where:



(a) an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise of

the other Contracting State; or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of a Contracting

State and an enterprise of the other Contracting State;

and in either case conditions operate between the two enterprises in their

commercial or financial relations which differ from those which might be

expected to operate between independent enterprises dealing wholly

independently with one another, then any profits which might, but for those

conditions, have been expected to accrue to one of the enterprises, but, by

reason of those conditions, have not so accrued, may be included in the profits

of that enterprise and taxed accordingly.




inadequate to determine the profits accruing to an enterprise. In such cases that

law shall be applied, having regard to the information that is available,

consistently with the principles of this Article.

3 Where profits on which an enterprise of a Contracting State has been

charged to tax in that State are also included, by virtue of the provisions of

paragraphs 1 or 2, in the profits of an enterprise of the other Contracting State

and charged to tax in that other State, and the profits so included are profits

which might have been expected to have accrued to that enterprise of the other

State if the conditions operative between the enterprises had been those which



might have been expected to have operated between independent enterprises

dealing wholly independently with one another, then the first-mentioned State

shall make an appropriate adjustment to the amount of tax it has charged on

those profits. In determining such adjustment, due regard shall be had to the

other provisions of this Convention and the competent authorities of the

Contracting States shall if necessary consult each other.

ARTICLE 10

Dividends

1 Dividends paid by a company which is a resident of a Contracting State

for the purposes of its tax, being dividends beneficially owned by 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 for the purposes of its

tax, and according to the law of that State, but the tax charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends, if the beneficial

owner of the dividends is a company which holds directly at least

10 per cent of the voting power in the company paying the

dividends; and

(b) 15 per cent of the gross amount of the dividends in all other cases.

3 Notwithstanding the provisions of paragraph 2 of this Article, dividends

shall not be taxed in the Contracting State of which the company paying the

dividends is a resident if the beneficial owner of the dividends is a company

that is a resident of the other Contracting State that has owned shares



representing 80 per cent or more of the voting power of the company paying the

dividends for a 12 month period ending on the date the dividend is declared and

the company that is the beneficial owner of the dividends:

(a) has its principal class of shares listed on a recognised stock

exchange specified in subparagraph (i) or (ii) of subparagraph (o)

of paragraph 1 of Article 3 and regularly traded on one or more

recognised stock exchanges;

(b) is owned directly or indirectly by one or more companies whose

principal class of shares is listed on a recognised stock exchange

specified in subparagraph (i) or (ii) of subparagraph (o) of

paragraph 1 of Article 3 and regularly traded on one or more

recognised stock exchanges; or

(c) does not meet the requirements of subparagraphs (a) or (b) of this

paragraph but the competent authority of the first-mentioned

Contracting State determines, in accordance with the law of that

State, that the establishment, acquisition or maintenance of the

company that is the beneficial owner of the dividends and the

conduct of its operations did not have as one of its principal

purposes the obtaining of benefits under this Convention. The

competent authority of the first-mentioned Contracting State shall

consult the competent authority of the other Contracting State

before refusing to grant benefits of this Convention under this

subparagraph.

4 The term “dividends” as used in this Article means income from 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 and also includes any other item which, under the laws

of the Contracting State of which the company paying the dividend is a

resident, is treated as a dividend or distribution of a company.

5 The provisions of paragraphs 1, 2 and 3 of this Article 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 in that

other State and the holding in respect of which the dividends are paid is

effectively connected with such permanent establishment. In such case the

provisions of Article 7 of this Convention 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, being dividends

beneficially owned by a person who is not a resident of the other Contracting

State, except insofar as the holding in respect of which such dividends are paid

is effectively connected with a permanent establishment situated in that other

State, nor subject the company’s undistributed profits to a tax on undistributed

profits, even if the dividends paid or the undistributed profits consist wholly or

partly of profits or income arising in such other State. This paragraph shall not

apply in relation to dividends paid by any company which is a resident of

Australia for the purposes of Australian tax and which is also a resident of the

United Kingdom for the purposes of United Kingdom tax.

7 No relief shall be available under this Article if it was the main purpose

or one of the main purposes of any person concerned with the creation or



assignment of the shares or other rights in respect of which the dividend is paid

to take advantage of this Article by means of that creation or assignment.

8 For the purposes of paragraph 3 of this Article, the term “principal class

of shares” means the ordinary or common shares of the company, provided that

such class of shares represents the majority of the voting power and value of the

company. If no single class of ordinary or common shares represents the

majority of the voting power and value of the company, the “principal class of

shares” is that class or those classes that in the aggregate represent a majority of

the voting power and value of the company.

ARTICLE 11

Interest

1 Interest arising in a Contracting State and beneficially owned by a

resident of the other Contracting State may be taxed in that other State.

2 However, that interest may also be taxed in the Contracting State in

which it arises, and according to the law of that State, but the tax so charged

shall not exceed 10 per cent of the gross amount of the interest.

3 Notwithstanding paragraph 2, interest arising in a Contracting State and

beneficially owned by a resident of the other Contracting State may not be

taxed in the first-mentioned State if:

(a) the interest is derived by a Contracting State or by a political or

administrative sub-division or a local authority thereof, or by any

other body exercising governmental functions in a Contracting



State, or by a bank performing central banking functions in a

Contracting State; or

(b) the interest is derived by a financial institution which is unrelated

to and dealing wholly independently with the payer. For the

purposes of this Article, the term “financial institution” means a

bank or other enterprise substantially deriving its profits by raising

debt finance in the financial markets or by taking deposits at

interest and using those funds in carrying on a business of

providing finance.

4 Notwithstanding paragraph 3, interest referred to in subparagraph (b) of

that paragraph may be taxed in the State in which it arises at a rate not

exceeding 10 per cent of the gross amount of the interest if the interest is paid

as part of an arrangement involving back-to-back loans or other arrangement

that is economically equivalent and intended to have a similar effect to

back-to-back loans.

5 The term “interest” as used in this Article means income from

debt-claims of every kind, whether or not secured by mortgage and whether or

not carrying a right to participate in the debtor’s profits, and in particular,

income from government securities and income from bonds or debentures, and

income from any other form of indebtedness. The term “interest” also includes

income which is subjected to the same taxation treatment as income from

money lent by the law of the Contracting State in which the income arises. The

term “interest” shall not include any item which is treated as a dividend under

the provisions of Article 10 of this Convention.



6 The provisions of paragraphs 1 and 2, subparagraph (b) of paragraph 3

and paragraph 4 of this Article shall not apply if the beneficial owner of the

interest, being a resident of a Contracting State, carries on business in the other

Contracting State, in which the interest arises, through a permanent

establishment situated in that other State and the indebtedness in respect of

which the interest is paid or credited is effectively connected with such

permanent establishment. In such case, the provisions of Article 7 of this

Convention shall apply.

7 Interest shall be deemed to arise in a Contracting State when the payer is

a resident of that State for the purposes of its tax. Where, however, the person

paying the interest, whether the person is a resident of a Contracting State or

not, has in a Contracting State a permanent establishment in connection with

which the indebtedness on which the interest is paid was incurred, and that

interest is borne by that permanent establishment, then the interest shall be

deemed to arise in the State in which the permanent establishment is situated.

8 Where, by reason of a special relationship between the payer and the

beneficial owner of the interest, or between both of them and some other

person, the amount of the interest paid or credited exceeds, for whatever reason,

the amount which might reasonably have been expected to have been agreed

upon by the payer and the beneficial owner in the absence of such relationship,

the provisions of this Article shall apply only to the last-mentioned amount. In

such case, the excess part of the amount of the interest paid or credited shall

remain taxable according to the laws of each Contracting State, due regard

being had to the other provisions of this Convention.





assignment of the debt-claim in respect of which the interest is paid to take

advantage of this Article by means of that creation or assignment.

ARTICLE 12

Royalties

1 Royalties arising in a Contracting State and beneficially owned by a


2 However, those royalties may also be taxed in the Contracting State in

which they arise, and according to the law of that State, but the tax so charged

shall not exceed 5 per cent of the gross amount of the royalties.

3 The term “royalties” in this Article means payments or credits, whether

periodical or not, and however described or computed, to the extent to which

they are made as consideration for:

(a) the use of, or the right to use, any copyright, patent, design or

model, plan, secret formula or process, trademark or other like

property or right;

(b) the supply of scientific, technical, industrial or commercial

knowledge or information;

(c) the supply of any ancillary and subsidiary assistance that is

furnished as a means of enabling the application or enjoyment of

any such item as is mentioned in subparagraph (a) or (b) of this

paragraph;



(d) the use of or the right to use:

(i) motion picture films; or

(ii) films or audio or video tapes or disks, or any other means of

image or sound reproduction or transmission for use in

connection with television, radio or other broadcasting; or

(e) total or partial forbearance in respect of the use or supply of any

property or right referred to in this paragraph.

4 The provisions of paragraphs 1 and 2 of this Article shall not apply if the

beneficial owner of the royalties, being a resident of a Contracting State, carries

on business in the other Contracting State, in which the royalties arise, through

a permanent establishment situated in that other State, and the right or property

in respect of which the royalties are paid or credited is effectively connected

with that permanent establishment. In that case the provisions of Article 7 of

this Convention shall apply.

5 Royalties shall be deemed to arise in a Contracting State when the payer

is a resident of that State for the purposes of its tax. Where, however, the

person paying the royalties, whether the person is a resident of a Contracting

State or not, has in a Contracting State a permanent establishment in connection

with which the liability to pay the royalties was incurred, and the royalties are

borne by the permanent establishment, then the royalties shall be deemed to

arise in the State in which the permanent establishment is situated.


beneficial owner of the royalties, or between both of them and some other



person, the amount of the royalties paid or credited exceeds, for whatever

reason, the amount which might reasonably have been expected to have been

agreed upon by the payer and the beneficial owner in the absence of such

relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In such case, the excess paid or credited shall remain taxable

according to the laws of each Contracting State, due regard being had to the

other provisions of this Convention.

7 The provisions of this Article shall not apply if it was the main purpose or

one of the main purposes of any person concerned with the creation or

assignment of the rights in respect of which the royalties are paid to take


ARTICLE 13

Alienation of property

1 Income or gains derived by a resident of a Contracting State from the

alienation of real property situated in the other Contracting State may be taxed

in that other State.

2 Income or gains from the alienation of property, other than real property,

forming part of the business property of a permanent establishment which an

enterprise of a Contracting State has in the other Contracting State, including

such income or gains from the alienation of such a permanent establishment

(alone or with the whole enterprise), may be taxed in that other State.


alienation of ships or aircraft operated in international traffic, or of property



(other than real property) pertaining to the operation of those ships or aircraft,

shall be taxable only in that Contracting State.


alienation of any shares or other interests in a company, or of an interest of any

kind in a partnership, trust or other entity, where the value of the assets of such

entity, whether they are held directly or indirectly (including through one or

more interposed entities, such as, for example, through a chain of companies),

is principally attributable to real property situated in the other Contracting

State, may be taxed in that other State.

5 An individual who elects, under the taxation law of a Contracting State,

to defer taxation on income or gains relating to property which would otherwise

be taxed in that State upon the individual ceasing to be a resident of that State

for the purposes of its tax, shall, if the individual is a resident of the other State,

be taxable on income or gains from the subsequent alienation of that property

only in that other State.

6 Nothing in this Convention affects the application of a law of a

Contracting State relating to the taxation of gains of a capital nature derived

from the alienation of any property other than that to which any of the

preceding paragraphs of this Article apply.

7 In this Article, the term “real property” has the same meaning as it has in

Article 6.

8 The situation of interests or rights referred to in paragraph 2 of Article 6

shall be determined for the purposes of this Article in accordance with

paragraph 3 of Article 6.



9 The provisions of this Article shall not affect the right of the United

Kingdom to levy according to its laws a tax chargeable in respect of income or

gains from the alienation of any property on a person who is a resident of the

United Kingdom at any time during the fiscal year in which the property is

alienated, or has been so resident at any time during the 6 years immediately

preceding that year.

ARTICLE 14

Income from employment

1 Subject to the provisions of Articles 17 and 18 of this Convention,

salaries, wages and other similar remuneration derived by a resident of a

Contracting State in respect of an employment shall be taxable only in that

State unless the employment is exercised in the other Contracting State. If the

employment is so exercised, such remuneration as is derived from that exercise

may be taxed in that other State.

2 Notwithstanding the provisions of paragraph 1 of this Article,

remuneration derived by a resident of a Contracting State in respect of an

employment exercised in the other Contracting State shall be taxable only in the

first-mentioned State if:

(a) the recipient is present in the other State for a period or periods not

exceeding in the aggregate 183 days in any twelve month period

commencing or ending in the fiscal year or year of income of that

other State; and



(b) the remuneration is paid by, or on behalf of, an employer who is

not a resident of the other State; and

(c) the remuneration is not deductible in determining taxable profits of

a permanent establishment which the employer has in the other

State.

3 Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft

operated in international traffic may be taxed in the Contracting State of which

the enterprise operating the ship or aircraft is a resident.

4 In relation to remuneration of a director of a company derived from the

company the preceding provisions of this Article shall apply as if the

remuneration were remuneration of an employee in respect of an employment

and as if the references to an employer were references to the company.

ARTICLE 15

Fringe benefits

1 Where, except for the application of this Article, a fringe benefit is

taxable in both Contracting States the benefit will be taxable only in the

Contracting State which would have the primary taxing right over that benefit if

the value of the benefit were paid to the employee as ordinary employment

income.

2. For the purposes of this Article:



(a) “fringe benefit” has the meaning it has under Australia’s Fringe

Benefits Tax Assessment Act 1986 (Commonwealth), as it may be

amended from time to time, and does not include a benefit arising

from the acquisition of an option over shares under an employee

share scheme;

(b) a Contracting State has a “primary taxing right” to the extent that it

has a taxing right under this Convention in respect of the

remuneration for the relevant employment and the other

Contracting State is required under this Convention to allow relief

for any taxes imposed in respect of such remuneration by the

first-mentioned Contracting State.

ARTICLE 16

Entertainers and sportspersons

1 Notwithstanding the provisions of Articles 7 and 14 of this Convention,

income derived by a resident of a Contracting State as an entertainer, such as a

theatre, motion picture, radio or television artiste, or a musician, or as a

sportsperson, from that person’s personal activities as such exercised in the

other Contracting State, may be taxed in that other State.

2 Where income in respect of personal activities exercised by an entertainer

or a sportsperson in that person’s capacity as such accrues not to that person but

to another person, that income may, notwithstanding the provisions of Articles

7 and 14 of this Convention, be taxed in the Contracting State in which the

activities of the entertainer or sportsperson are exercised.



ARTICLE 17

Pensions and annuities

1 Pensions (including government pensions) and annuities paid to a

resident of a Contracting State shall be taxable only in that State.

2 The term “annuity” means a stated sum payable periodically to an

individual at stated times during life or during a specified or ascertainable

period of time under an obligation to make the payments in return for adequate

and full consideration in money or money’s worth.

ARTICLE 18

Government service

1 Salaries, wages and other similar remuneration, other than a pension or

annuity, paid by a Contracting State or a political subdivision or local authority

of that State to an individual in respect of services rendered in the discharge of

governmental functions shall be taxable only in that State. However, such

salaries, wages and other similar remuneration shall be taxable only in the other

Contracting State if the services are rendered in that other State and the

recipient is a resident of that other State who:

(a) is a national of that State; or

(b) did not become a resident of that State solely for the purpose of

rendering the services.

2 The provisions of paragraph 1 of this Article shall not apply to salaries,

wages and other similar remuneration in respect of services rendered in



connection with any trade or business carried on by a Contracting State or a

political subdivision or local authority of that State. In that case, the provisions

of Article 14, 15 or 16, as the case may be, shall apply.

ARTICLE 19

Students

Where a student, who is a resident of a Contracting State or who was a

resident of that State immediately before visiting the other Contracting State

and who is temporarily present in that other State solely for the purpose of the

student’s education, receives payments from sources outside that other State for

the purpose of the student’s maintenance or education, those payments shall be

exempt from tax in that other State.

ARTICLE 20

Other income

1 Items of income beneficially owned by a resident of a Contracting State,

wherever arising, not dealt with in the foregoing Articles of this Convention

shall be taxable only in that State.

2 The provisions of paragraph 1 of this Article shall not apply to income,

other than income from real property as defined in paragraph 2 of Article 6 of

this Convention, derived by a resident of a Contracting State who carries on

business in the other Contracting State through a permanent establishment

situated therein and the right or property in respect of which the income is paid



is effectively connected with such permanent establishment. In that case the

provisions of Article 7 of this Convention shall apply.

3 Notwithstanding the provisions of paragraphs 1 and 2 of this Article,

items of income of a resident of a Contracting State not dealt with in the

foregoing Articles of this Convention from sources in the other Contracting

State may also be taxed in the other Contracting State.

4 Where, by reason of a special relationship between the person referred to

in paragraph 1 of this Article and some other person, or between both of them

and some third person, the amount of the income referred to in that paragraph

exceeds the amount (if any) which might reasonably have been expected to

have been agreed upon between them in the absence of such a relationship, the

provisions of this Article shall apply only to the last-mentioned amount. In

such a case, the excess part of the income shall remain taxable according to the

laws of each Contracting State, due regard being had to the other applicable

provisions of this Convention.

5 A person may not rely on this Article to obtain relief from taxation if it

was the main purpose or one of the main purposes of any person concerned

with the creation or assignment of the rights in respect of which the income is

derived to take advantage of this Article by means of that creation or

assignment.



ARTICLE 21

Source of income

Income or gains derived by a resident of the United Kingdom which,

under any one or more of Articles 6 to 8 and 10 to 16 and 18, may be taxed in

Australia shall for the purposes of the laws of Australia relating to its tax be

deemed to arise from sources in Australia.

ARTICLE 22

Elimination of double taxation

1 Subject to the provisions of the laws of Australia from time to time in

force which relate to the allowance of a credit against Australian tax of tax paid

in a country outside Australia (which shall not affect the general principle of

this Article):

(a) United Kingdom tax paid under the laws of the United Kingdom

and in accordance with this Convention, whether directly or by

deduction, in respect of income or gains derived by a person who is

a resident of Australia from sources in the United Kingdom shall be

allowed as a credit against Australian tax payable in respect of that

income;

(b) Where a company which is a resident of the United Kingdom and is

not a resident of Australia for the purposes of Australian tax pays a

dividend to a company which is a resident of Australia and which

controls directly or indirectly at least 10 per cent of the voting



power of the first-mentioned company, the credit shall include the

United Kingdom tax paid by that first-mentioned company in

respect of that portion of its profits out of which the dividend is

paid.

2 Subject to the provisions of the law of the United Kingdom regarding the

allowance as a credit against United Kingdom tax of tax payable in a territory

outside the United Kingdom (which shall not affect the general principle

hereof):

(a) Australian tax payable under the laws of Australia and in

accordance with this Convention, whether directly or by deduction,

on income or chargeable gains from sources within Australia

(excluding in the case of a dividend, tax payable in respect of the

profits out of which the dividend is paid) shall be allowed as a

credit against any United Kingdom tax computed by reference to

the same income or chargeable gains by reference to which the

Australian tax is computed;

(b) in the case of a dividend paid by a company which is a resident of

Australia to a company which is a resident of the United Kingdom

and which controls directly or indirectly at least 10 per cent of the

voting power in the company paying the dividend, the credit shall

take into account (in addition to any Australian tax for which credit

may be allowed under the provisions of subparagraph (a) of this

paragraph) the Australian tax payable by the company in respect of

the profits out of which such dividend is paid.

3 For the purposes of paragraph 1 and 2 of this Article, income or gains

owned by a resident of a Contracting State which may be taxed in the other



Contracting State in accordance with this Convention shall be deemed to arise

from sources in that other Contracting State.

ARTICLE 23

Limitation of relief

1 Where under this Convention any income or gains are relieved from tax

in a Contracting State and, under the law in force in the other Contracting State,

a person in respect of that income or those gains is taxed by reference to the

amount thereof which is remitted to or received in that other State and not by

reference to the full amount thereof, then the relief to be allowed under this

Convention in the first-mentioned State shall apply only to so much of the

income or gains as is taxed in the other State.

2 Where under this Convention any income or gains are relieved from tax

in a Contracting State and, under the law in force in the other Contracting State,

an individual in respect of that income or those gains is exempt from tax by

virtue of being a temporary resident of the other State within the meaning of the

applicable tax laws of that other State, then the relief to be allowed under this

Convention in the first-mentioned State shall not apply to the extent that that

income or those gains are exempt from tax in the other State.

ARTICLE 24

Partnerships

Where a partnership is treated as a taxable unit under the law of a

Contracting State and under any provision of this Convention is entitled, as a

resident of that State, to relief from tax in the other Contracting State on any



income or gains, that provision shall not be construed as restricting the right of

that other State to tax any member of the partnership who is a resident of that

other State on that member’s share of such income or gains; but any such

income or gains shall be treated for the purposes of Article 22 of this

Convention as income or gains from sources in the first-mentioned State.

ARTICLE 25

Non-discrimination

1 Nationals of a Contracting State shall not be subjected in the other

Contracting State to any taxation or any requirement connected therewith,

which is other or more burdensome than the taxation and connected

requirements to which nationals of that other State in the same circumstances,

in particular with respect to residence, are or may be subjected.

2 The taxation on a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State shall not be less favourably

levied in that other State than the taxation levied on enterprises of that other

State carrying on the same activities in similar circumstances.

3 Except where the provisions of paragraph 1 of Article 9, paragraph 8 or 9

of Article 11, paragraph 6 or 7 of Article 12, or paragraph 4 or 5 of Article 20

of this Convention apply, interest, royalties and other disbursements paid by an

enterprise of a Contracting State to a resident of the other Contracting State

shall for the purpose of determining the taxable profits of such enterprise, be

deductible under the same conditions as if they had been paid to a resident of

the first-mentioned State.



4 Enterprises of a Contracting State, the capital of which is wholly or partly

owned or controlled, directly or indirectly, by one or more residents of the other

Contracting State, shall not be subjected in the first-mentioned State to any

taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which other

similar enterprises of the first-mentioned State in similar circumstances are or

may be subjected.

5 Nothing contained in this Article shall be construed as obliging a

Contracting State to grant to individuals who are residents of the other

Contracting State any of the personal allowances, reliefs and reductions for tax

purposes which are granted to individuals so resident.

6 This Article shall not apply to any provision of the laws of a Contracting

State which:

(a) is designed to prevent the avoidance or evasion of taxes;

(b) does not permit the deferral of tax arising on the transfer of an asset

where the subsequent transfer of the asset by the transferee would

be beyond the taxing jurisdiction of the Contracting State under its

laws;

(c) provides for consolidation of group entities for treatment as a single

entity for tax purposes provided that Australian resident companies

that are owned directly or indirectly by residents of the United

Kingdom can access such consolidation treatment on the same

terms and conditions as other Australian resident companies;



(d) provides deductions to eligible taxpayers for expenditure on

research and development; or

(e) is otherwise agreed to be unaffected by this Article in an Exchange

of Notes between the Government of Australia and the Government

of the United Kingdom.

7 The provisions of this Article shall apply to the taxes which are the

subject of this Convention.

ARTICLE 26

Mutual agreement procedure

1 Where a person who is a resident of a Contracting State considers that the

actions of one or both of the Contracting States result or will result for that

person in taxation not in accordance with this Convention, that person may,

irrespective of the remedies provided by the domestic law of those States

concerning taxes to which this Convention applies, present a case to the

competent authority of the Contracting State of which that person is a resident

or, if the case comes under paragraph 1 of Article 25 of this Convention, to that

of the Contracting State of which that person is a national.

2 The competent authority shall endeavour, if the case appears to it to be

justified and if it is not itself able to arrive at a satisfactory solution, to resolve

the case by mutual agreement with the competent authority of the other

Contracting State, with a view to the avoidance of taxation which is not in

accordance with this Convention.



3 The competent authorities of the Contracting States shall jointly

endeavour to resolve by mutual agreement any difficulties or doubts arising as

to the interpretation or application of this Convention. They may also consult

together for the elimination of double taxation in cases not provided for in this

Convention.

4 The competent authorities of the Contracting States may communicate

with each other directly for the purpose of reaching an agreement in the sense

of the preceding paragraphs.

5 For the purposes of paragraph 3 of Article XXII (Consultation) of the

General Agreement on Trade in Services, the Contracting States agree that,

notwithstanding that paragraph, any dispute between them as to whether a

measure falls within the scope of this Convention may be brought before the

Council for Trade in Services, as provided by that paragraph, only with the

consent of both Contracting States. Any doubt as to the interpretation of this

paragraph shall be resolved under paragraph 3 of this Article or, failing

agreement under that procedure, pursuant to any other procedure agreed to by

both Contracting States.

ARTICLE 27

Exchange of information

1 The competent authorities of the Contracting States shall exchange such

information as is foreseeably relevant to the administration or enforcement of

the provisions of this Convention or of the domestic laws of the Contracting

States concerning taxes to which this Convention applies insofar as the taxation

under those laws is not contrary to this Convention. The exchange of



information is not restricted by Article 1 of this Convention. Any information

received by a Contracting State shall be treated as secret in the same manner as

information obtained under the domestic law of that State and shall be disclosed

only to persons or authorities (including courts and administrative bodies)

concerned with the assessment or collection of, the enforcement or prosecution

in respect of, or the determination of appeals in relation to, the taxes to which

this Convention applies. Such persons or authorities shall use the information

only for such purposes. They may disclose the information in public court

proceedings or in judicial decisions.

2 If information is requested by a Contracting State in accordance with this

Article, the other Contracting State shall obtain that information in the same

manner and to the same extent as if the tax of the first-mentioned State were the

tax of that other State and were being imposed by that other State,

notwithstanding that the other State may not, at that time, need such

information for the purposes of its own tax.

3 In no case shall the provisions of paragraphs 1 or 2 of this Article be

construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws or

the administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in

the normal course of the administration of that or of the other


(c) to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or to



supply information the disclosure of which would be contrary to

public policy.

ARTICLE 28

Members of diplomatic missions or permanent missions and consular posts

Nothing in this Convention shall affect the fiscal privileges of members

of diplomatic missions or permanent missions or consular posts under the

general rules of international law or under the provisions of special

international agreements.

ARTICLE 29

Entry into force

1 Each of the Contracting States shall notify the other in writing through

the diplomatic channel of the completion of the procedures required by its law

for the entry into force of this Convention. This Convention shall enter into

force on the date of the later notification, and shall thereupon have effect:

(a) in the case of Australia:

(i) in respect of withholding tax on income that is derived by a

non-resident, in relation to income derived on or after 1 July

next following the date on which this Convention enters into

force;



(ii) in respect of fringe benefits tax, in relation to fringe benefits

provided on or after 1 April next following the date on which

this Convention enters into force;

(iii) in respect of other Australian tax, in relation to income or

gains of any year of income beginning on or after 1 July next

following the date on which this Convention enters into

force;

(b) in the case of the United Kingdom:

(i) in respect of taxes withheld at source, for amounts paid or

credited on or after 1 July next following the date on which

this Convention enters into force;

(ii) in respect of income tax not described in clause (i) of this

subparagraph and capital gains tax, for any year of

assessment beginning on or after 6 April next following the

date on which this Convention enters into force;

(iii) in respect of corporation tax, for any financial year beginning

on or after 1 April next following the date on which this

Convention enters into force.

2 The Agreement between the Government of the Commonwealth of

Australia and the Government of the United Kingdom of Great Britain and

Northern Ireland signed at Canberra on 7 December 1967 (as amended by the

Protocol signed at Canberra on 29 January 1980) (“the Agreement”) shall be

terminated and shall cease to have effect in respect of the taxes to which this



Convention applies in accordance with the provisions of paragraph 1 of this

Article. In relation to tax credits in respect of dividends paid by companies

which are residents of the United Kingdom, the Agreement shall be terminated

and shall cease to have effect in respect of dividends paid on or after 1 July next

following the date on which this Convention enters into force.

3 Notwithstanding the entry into force of this Convention, an individual

who is entitled to the benefits of Article 16 of the Agreement at the time of the

entry into force of this Convention shall continue to be entitled to such benefits

until such time as the individual would have ceased to be entitled to such

benefits if the Agreement had remained in force.

ARTICLE 30

Termination

This Convention shall remain in force until terminated by one of the

Contracting States. Either Contracting State may, on or before 30 June in any

calendar year beginning after the expiration of 5 years from the date of its entry

into force, give written notice of termination through the diplomatic channel

and, in that event, the Convention shall cease to have effect:



non-resident, in relation to income derived on or after

1 January in the calendar year next following that in which

the notice of termination is given;




provided on or after 1 April in the calendar year next

following that in which the notice of termination is given;

(iii) in respect of other Australian tax, in relation to income or

gains of any year of income beginning on or after 1 July in

the calendar year next following that in which the notice of

termination is given;

(b) in the case of the United Kingdom:

(i) in respect of taxes withheld at source, for amounts paid or

credited on or after 1 January in the calendar year next


(ii) in respect of income tax not described in clause (i) of this

subparagraph and capital gains tax, for any year of

assessment beginning on or after 6 April in the calendar year

next following that in which the notice of termination is

given;

(iii) in respect of corporation tax, for any financial year beginning

on or after 1 April in the calendar year next following that in

which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto by

their respective Governments, have signed this Convention.



DONE in duplicate at Canberra this 21st day of August 2003

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

AUSTRALIA THE UNITED KINGDOM OF

GREAT BRITAIN AND

NORTHERN IRELAND

PETER COSTELLO ALASTAIR GOODLAD

[Signatures omitted]



2003 UNITED KINGDOM NOTES

No LGB 03/170

The Department of Foreign Affairs and Trade presents its compliments to the

British High Commission to Australia and has the honour to refer to the

Convention between the Government of the United Kingdom of Great Britain

and Northern Ireland and the Government of Australia for the Avoidance of

Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on

Income and on Capital Gains which has been signed today (the “Convention”).

The Department has the honour to make the following proposals on behalf of

the Government of Australia:

1. With reference generally to the application of the Convention (including

these Notes),

the Contracting States agree that:

(a) the term “income or gains” includes “profits”;

(b) the term “laws” includes the full body of law, and is not limited to

statutory law;

(c) the terms “paid or credited” and “payments or credits” shall not include the

recording of internal transactions between a permanent establishment and

another part of the same enterprise;

(d) the expression “any provision of the laws of a Contracting State which is

designed to prevent the avoidance or evasion of taxes” includes:



(i) measures designed to address thin capitalisation, dividend stripping

and transfer pricing;

(ii) controlled foreign company, transferor trust and foreign investment

fund rules;

(iii) measures designed to ensure that taxes can be effectively recovered

(conservancy measures); and

(e) nothing in the Convention shall be construed as restricting, in any manner,

the application of any provision of the laws of a Contracting State which is

designed to prevent the avoidance or evasion of taxes.

2. With reference to Article 5 (Permanent establishment),

the Contracting States agree that the term “permanent establishment” fully

encompasses the concept of a “fixed base” used in other double tax treaties in

the context of independent personal services.

3. With reference to Article 7 (Business profits),


(a) nothing in paragraph 3 of the Article shall permit the deduction of an

expense which would not be deductible if the permanent establishment

were an independent enterprise which incurred the expense; and



(b) where:

(i) a resident of a Contracting State is beneficially entitled, whether

directly or through one or more interposed trust estates, to a share

of the business profits of an enterprise carried on in the other

Contracting State by the trustee of a trust estate other than a trust

estate which is treated as a company for tax purposes; and

(ii) in relation to that enterprise, that trustee would, in accordance with

the principles of Article 5, have a permanent establishment in that

other State,

the enterprise carried on by the trustee shall be deemed to be a business

carried on in the other State by that resident through a permanent

establishment situated in that other State and that share of business

profits shall be attributed to that permanent establishment.

4. With reference to Article 9 (Associated enterprises),

the Contracting States note that the expression “dealing wholly independently

with one another” is included in paragraph 1 of the Article to conform to

Australia’s consistent treaty practice and to address Australia’s concerns that

the appropriate benchmark for determining the conditions operating between the

associated enterprises should have regard to whether those dealings between the

enterprises occurred on a truly independent basis.



5. With reference to Article 10 (Dividends),

the Contracting States agree that if the relevant law in either Contracting State

at the date of signature of the Convention is varied otherwise than in minor

respects so as not to affect its general character, the Contracting States shall

consult each other with a view to agreeing to any amendment of paragraph 2

and 3 of the Article as may be appropriate.

6. With reference to Article 11 (Interest),


(a) the term “financial institution” shall not include a corporate treasury or a

member of a corporate group performing financing services for the group;

and

(b) nothing in the Convention shall have the effect of subjecting to tax in a

Contracting State any interest paid by a resident of that State to a resident

of the other State where the payer has outside both Contracting States a

permanent establishment in connection with which the indebtedness on

which the interest is paid was incurred, and that interest is borne by that

permanent establishment.



7. With reference to Article 12 (Royalties),


(a) the term “royalties” shall not include payments for the use of spectrum

licences. The provisions of Article 7 of the Convention shall apply to such

payments; and


Contracting State any royalties paid by a resident of that State to a resident


permanent establishment in connection with which the liability to pay the

royalties was incurred, and the royalties are borne by the permanent

establishment.

8. With reference to Article 14 (Income from employment),


(a) income or gains derived by employees in relation to share option schemes

shall be treated as “other similar remuneration” for the purposes of Article

14;

(b) unless the facts otherwise indicate, the period of employment to which the

option relates shall be taken to be the period between the grant of the

option and the date on which all the conditions for its exercise have been

satisfied (the vesting of the option); and



(c) where a resident of a Contracting State derives such income or gains, and

(i) the period of employment to which the share option relates is the

period between grant and vesting of the option;

(ii) the employee remains in that employment at the date of alienation

or exercise of the option; and

(iii) that employment has been exercised by the employee in the other

Contracting State during all or part of the period between grant and

vesting of the option;

the proportion of the income or gain which shall be attributable to

employment exercised in the other Contracting State shall be determined

in accordance with the ratio of the number of days of employment

exercised in that State between grant and vesting of the option to the total

number of days of employment exercised between grant and vesting of

the option.

9. With reference to Article 25 (Non-discrimination),


(a) in relation to paragraph 4 and subparagraph 6(c) of the Article, the

reference to capital being owned or controlled “directly or indirectly”

includes cases where the capital is held through a chain of companies or

other entities; and



(b) nothing in the Article shall be construed as obliging a Contracting State

to allow tax rebates and credits in relation to dividends received by a

person who is a resident of the other Contracting State.

10. With reference to Article 26 (Mutual agreement procedure) and Article

27 (Exchange of information),

the Contracting States agree that the provisions of the Articles shall have effect

from the date of entry into force of the Convention, without regard to the date of

the relevant transactions or the taxable or chargeable period to which the matter

relates.

11. With reference to Article 26 (Mutual agreement procedure),

the Contracting States agree that in relation to paragraph 1 of the Article, the

applicable time limits in the domestic laws bearing on the time available for

presenting a case to the relevant competent authority shall apply, whether or not

those applicable time limits specifically refer to the competent authority

process.

12. Miscellaneous

The Contracting States agree that the two Governments shall consult each other

at intervals of not more than five years regarding the terms, operation and

application of the Convention with a view to ensuring that it continues to serve

the purposes of avoiding double taxation and preventing fiscal evasion. The

first such consultation shall take place no later than the end of the fifth year

after the entry into force of the Convention.



If the foregoing proposals are acceptable to the Government of the United

Kingdom of Great Britain and Northern Ireland, the Department has the honour

to propose that the present Note and the High Commission’s confirmatory Note

in reply shall constitute an Agreement on certain matters between the

Government of the United Kingdom of Great Britain and Northern Ireland and

the Government of Australia for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital

Gains, which shall enter into force at the same time as the entry into force of the

Convention.

The Department of Foreign Affairs and Trade avails itself of this opportunity to

renew to the British High Commission to Australia the assurances of its highest

consideration.

[Seal omitted]

CANBERRA

21 August 2003



41/03

The British High Commission to Australia presents its compliments to the

Department of Foreign Affairs and Trade and has the honour to refer to the

Department’s Note No LGB 03/170 of 21 August 2003 which reads as follows:

“The Department of Foreign Affairs and Trade presents its compliments to the

British High Commission to Australia and has the honour to refer to the

Convention between the Government of the United Kingdom of Great Britain

and Northern Ireland and the Government of Australia for the Avoidance of

Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on

Income and on Capital Gains which has been signed today (the “Convention”).

The Department has the honour to make the following proposals on behalf of

the Government of Australia:

1. With reference generally to the application of the Convention (including

these Notes),


(a) the term “income or gains” includes “profits”;

(b) the term “laws” includes the full body of law, and is not limited to

statutory law;



(c) the terms “paid or credited” and “payments or credits” shall not include

the recording of internal transactions between a permanent

establishment and another part of the same enterprise;

(d) the expression “any provision of the laws of a Contracting State which

is designed to prevent the avoidance or evasion of taxes” includes:

(i) measures designed to address thin capitalisation, dividend stripping

and transfer pricing;

(ii) controlled foreign company, transferor trust and foreign investment

fund rules;

(iii) measures designed to ensure that taxes can be effectively recovered

(conservancy measures); and

(e) nothing in the Convention shall be construed as restricting, in any

manner, the application of any provision of the laws of a Contracting

State which is designed to prevent the avoidance or evasion of taxes.

2. With reference to Article 5 (Permanent establishment),

the Contracting States agree that the term “permanent establishment” fully

encompasses the concept of a “fixed base” used in other double tax treaties in

the context of independent personal services.



3. With reference to Article 7 (Business profits),


(a) nothing in paragraph 3 of the Article shall permit the deduction of an

expense which would not be deductible if the permanent establishment

were an independent enterprise which incurred the expense; and

(b) where:

(i) a resident of a Contracting State is beneficially entitled, whether





(ii) in relation to that enterprise, that trustee would, in accordance with


other State,


carried on in the other State by that resident through a permanent

establishment situated in that other State and that share of business

profits shall be attributed to that permanent establishment.

4. With reference to Article 9 (Associated enterprises),

the Contracting States note that the expression “dealing wholly independently

with one another” is included in paragraph 1 of the Article to conform to



Australia’s consistent treaty practice and to address Australia’s concerns that

the appropriate benchmark for determining the conditions operating between the

associated enterprises should have regard to whether those dealings between the

enterprises occurred on a truly independent basis.

5. With reference to Article 10 (Dividends),

the Contracting States agree that if the relevant law in either Contracting State

at the date of signature of the Convention is varied otherwise than in minor

respects so as not to affect its general character, the Contracting States shall

consult each other with a view to agreeing to any amendment of paragraph 2

and 3 of the Article as may be appropriate.

6. With reference to Article 11 (Interest),


(a) the term “financial institution” shall not include a corporate treasury or a

member of a corporate group performing financing services for the group;

and


Contracting State any interest paid by a resident of that State to a resident


permanent establishment in connection with which the indebtedness on

which the interest is paid was incurred, and that interest is borne by that






(a) the term “royalties” shall not include payments for the use of spectrum

licences. The provisions of Article 7 of the Convention shall apply to

such payments; and


Contracting State any royalties paid by a resident of that State to a

resident of the other State where the payer has outside both Contracting

States a permanent establishment in connection with which the liability to

pay the royalties was incurred, and the royalties are borne by the


8. With reference to Article 14 (Income from employment),


(a) income or gains derived by employees in relation to share option schemes

shall be treated as “other similar remuneration” for the purposes of

Article 14;

(b) unless the facts otherwise indicate, the period of employment to which

the option relates shall be taken to be the period between the grant of the

option and the date on which all the conditions for its exercise have been

satisfied (the vesting of the option); and



(c) where a resident of a Contracting State derives such income or gains, and

(i) the period of employment to which the share option relates is

the period between grant and vesting of the option;

(ii) the employee remains in that employment at the date of

alienation or exercise of the option; and

(iii) that employment has been exercised by the employee in the

other Contracting State during all or part of the period between

grant and vesting of the option;

the proportion of the income or gain which shall be attributable to

employment exercised in the other Contracting State shall be determined

in accordance with the ratio of the number of days of employment

exercised in that State between grant and vesting of the option to the total

number of days of employment exercised between grant and vesting of

the option.

9. With reference to Article 25 (Non-discrimination),


(a) in relation to paragraph 4 and subparagraph 6(c) of the Article, the

reference to capital being owned or controlled “directly or indirectly”

includes cases where the capital is held through a chain of companies or

other entities; and



(b) nothing in the Article shall be construed as obliging a Contracting State

to allow tax rebates and credits in relation to dividends received by a

person who is a resident of the other Contracting State.

10. With reference to Article 26 (Mutual agreement procedure) and Article

27 (Exchange of information),

the Contracting States agree that the provisions of the Articles shall have effect

from the date of entry into force of the Convention, without regard to the date of

the relevant transactions or the taxable or chargeable period to which the matter

relates.

11. With reference to Article 26 (Mutual agreement procedure),

the Contracting States agree that in relation to paragraph 1 of the Article, the

applicable time limits in the domestic laws bearing on the time available for

presenting a case to the relevant competent authority shall apply, whether or not

those applicable time limits specifically refer to the competent authority

process.

12. Miscellaneous

The Contracting States agree that the two Governments shall consult each other

at intervals of not more than five years regarding the terms, operation and

application of the Convention with a view to ensuring that it continues to serve

the purposes of avoiding double taxation and preventing fiscal evasion. The



first such consultation shall take place no later than the end of the fifth year

after the entry into force of the Convention.

If the foregoing proposals are acceptable to the Government of the United

Kingdom of Great Britain and Northern Ireland, the Department has the honour

to propose that the present Note and the High Commission’s confirmatory Note

in reply shall constitute an Agreement on certain matters between the

Government of the United Kingdom of Great Britain and Northern Ireland and

the Government of Australia for the Avoidance of Double Taxation and the



Convention.

The Department of Foreign Affairs and Trade avails itself of this opportunity to

renew to the British High Commission to Australia the assurances of its highest

consideration.”

The High Commission has the honour to advise that the Department’s proposals

are acceptable to the Government of the United Kingdom of Great Britain and

Northern Ireland and that the Department’s Note and this confirmatory Note in

reply shall constitute an Agreement on certain matters between the Government

of the United Kingdom of Great Britain and Northern Ireland and the

Government of Australia for the Avoidance of Double Taxation and the



Convention.



The British High Commission to Australia avails itself of this opportunity to

renew to the Department of Foreign Affairs and Trade the assurances of its

highest consideration.

[Seal omitted]

CANBERRA

21 August 2003

Convention between the Government of Australia and the Government of the United

States of America for the Avoidance of Double Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on Income Schedule 2


Schedule 2—Convention between the

Government of Australia and the

Government of the United States of

America for the Avoidance of Double

Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on

Income Section 3

The Government of Australia and the Government of the United States of

America,

Desiring to conclude a Convention for the Avoidance of Double Taxation

and the Prevention of Fiscal Evasion with Respect to Taxes on Income,


ARTICLE 1

Personal Scope

(1) Except as otherwise provided in this Convention, this Convention shall

apply to persons who are residents of one or both of the Contracting States.

(2) This Convention shall not restrict in any manner any exclusion, exemption,

deduction, rebate, credit or other allowance accorded from time to time:

(a) by the laws of either Contracting State; or

(b) by any other agreement between the Contracting States.

(3) Notwithstanding any provision of this Convention, except paragraph (4) of

this Article, a Contracting State may tax its residents (as determined under

Article 4 (Residence)) and individuals electing under its domestic law to be

taxed as residents of that State, and by reason of citizenship may tax its citizens,

as if this Convention had not entered into force. For this purpose, the term

“citizen” shall, with respect to United States source income according to United

States law relating to United States tax, include a former citizen whose loss of

Schedule 2 Convention between the Government of Australia and the Government of

the United States of America for the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with respect to Taxes on Income


citizenship had as one of its principal purposes the avoidance of tax, but only

for a period of 10 years following such loss.

(4) The provisions of paragraph (3) shall not affect:

(a) the benefits conferred by a Contracting State under paragraph (2) of

Article 9 (Associated Enterprises), paragraph (2) or (6) of Article 18

(Pensions, Annuities, Alimony and Child Support), Article 22 (Relief

from Double Taxation), 23 (Non--Discrimination), 24 (Mutual

Agreement Procedure) or paragraph (1) of Article 27 (Miscellaneous);

or

(b) the benefits conferred by a Contracting State under Article 19

(Governmental Remuneration), 20 (Students) or 26 (Diplomatic and

Consular Privileges) upon individuals who are neither citizens of, nor

have immigrant status in, that State (in the case of benefits conferred by

the United States), or who are not ordinarily resident in that State (in the

case of benefits conferred by Australia).

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are:

(a) in the United States: the Federal income taxes imposed by the Internal

Revenue Code, but excluding the accumulated earnings tax and the

personal holding company tax; and

(b) in Australia: the Australian income tax, including the additional tax

upon the undistributed amount of the distributable income of a private

company.

(2) This Convention shall also apply to any identical or substantially similar

taxes which are imposed by either Contracting State after the date of signature

of this Convention in addition to, or in place of, the existing taxes. At the end of

each calendar year, the competent authority of each Contracting State shall

notify the competent authority of the other Contracting State of any substantial

changes which have been made during that year in the laws of his State relating

to the taxes to which this Convention applies or in the official interpretation of

those laws or of this Convention.





ARTICLE 3

General Definitions

(1) For the purposes of this Convention, unless the context otherwise requires:

(a) the term “person” includes an individual, an estate of a deceased

individual, a trust, a partnership, a company and any other body of

persons;

(b) the term “company” means any body corporate or any entity which is


(c) the terms “enterprise of one of the Contracting States” and “enterprise

of the other Contracting State” mean an enterprise carried on by a

resident of Australia or an enterprise carried on by a resident of the

United States, as the context requires;

(d) the term “international traffic” means any transport by a ship or aircraft,

except where such transport is solely between places within a

Contracting State;

(e) the term “competent authority” means:

(i) in the case of the United States: the Secretary of the Treasury or

his delegate; and

(ii) in the case of Australia: the Commissioner of Taxation or his

authorized representative;

(f) the terms “Contracting State”, “one of the Contracting States” and “the

other Contracting State” mean the United States or Australia, as the

context requires;

(g) (i) the term “United States corporation” means a corporation which,

under United States law relating to United States tax, is a

domestic corporation or an unincorporated entity treated as a

domestic corporation, and which is not, under the law of

Australia relating to Australian tax, a resident of Australia; and

(ii) the term “Australian corporation” means a company, as defined

under the law of Australia relating to Australian tax, which, under

that law, is a resident of Australia, and which is not, under United

States law relating to United States tax, a domestic corporation or

an unincorporated entity treated as a domestic corporation;

(h) the term “State” means any National State, whether or not one of the

Contracting States;

(i) the term “United States tax” means tax imposed by the United

States to which this Convention applies by virtue of Article 2

(Taxes Covered) and the term “Australian tax” means tax





imposed by Australia to which this Convention applies by virtue

of Article 2 (Taxes Covered), but neither term includes any

amount which represents a penalty or interest imposed under the

law of either Contracting State relating to United States tax or

Australian tax;

(j) (i) the term “United States” means the United States of America;

and

(ii) when used in a geographical sense, the term “United States”

means the states thereof and the District of Columbia and also

includes:

(A) the territorial waters thereof; and

(B) the sea--bed and subsoil of the submarine areas adjacent to

the coast thereof, but beyond the territorial waters, over

which the United States exercises rights, in accordance

with international law, for the purposes of exploration for,

or exploitation of, the natural resources of those areas;

(k) the term “Australia” means the Commonwealth of Australia and, when

used in a geographical sense, includes:





(v) the Coral Sea Islands Territory; and

(vi) any area adjacent to the territorial limits of Australia or of the

said Territories in respect of which there is for the time being in

force, consistently with international law, a law of Australia or of

a State or part of Australia or of a Territory aforesaid dealing

with the exploitation of any of the natural resources of the

sea--bed and subsoil of the continental shelf;

(l) the terms “resident of one of the Contracting States” and “resident of

the other Contracting State” mean a resident of Australia or a resident

of the United States, as the context requires.

(2) As regards the application of this Convention by one of the Contracting

States, any term not defined herein shall, unless the context otherwise requires,

have the meaning which it has under the laws of that State relating to the taxes

to which this Convention applies.





ARTICLE 4

Residence

(1) For the purposes of this Convention:

(a) a person is a resident of Australia if the person is:

(i) an Australian corporation; or

(ii) any other person (except a company as defined under the law of

Australia relating to Australian tax) who, under that law, is a

resident of Australia,

provided that, in relation to any income, a person who:

(iii) is subject to Australian tax on income which is from sources in

Australia; or

(iv) is a partnership, an estate of a deceased individual or a trust

(other than a trust that is a provident, benefit, superannuation or

retirement fund, or that is established for public charitable

purposes or for the purpose of enabling scientific research to be

conducted by or in conjunction with a public university or public

hospital, the income of which is exempt from tax under the law

of Australia relating to Australian tax),

shall not be treated as a resident of Australia except to the extent that

the income is subject to Australian tax as the income of a resident,

either in the hands of that person or in the hands of a partner or

beneficiary, or, if that income is exempt from Australian tax, is so

exempt solely because it is subject to United States tax; and

(b) a person is a resident of the United States if the person is:

(i) a United States corporation; or

(ii) any other person (except a corporation or unincorporated entity

treated as a corporation for United States tax purposes) resident

in the United States for purposes of its tax, provided that, in

relation to any income derived by a partnership, an estate of a

deceased individual or a trust, such person shall not be treated as

a resident of the United States except to the extent that the

income is subject to United States tax as the income of a resident,

either in its hands or in the hands of a partner or beneficiary, or, if

that income is exempt from United States tax, is exempt other

than because such person, partner or beneficiary is not a United

States person according to United States law relating to United

States tax.





(2) Where by application of paragraph (1) an individual is a resident of both

Contracting States, he shall be deemed to be a resident of the State:

(a) in which he maintains his permanent home;

(b) if the provisions of sub--paragraph (a) do not apply, in which he has an

habitual abode if he has his permanent home in both Contracting States

or in neither of the Contracting States; or

(c) if the provisions of sub--paragraphs (a) and (b) do not apply, with which

his personal and economic relations are closer if he has an habitual

abode in both Contracting States or in neither of the Contracting States.

For the purposes of this paragraph, in determining an individual’s permanent

home, regard shall be given to the place where the individual dwells with his

family, and in determining the Contracting State with which an individual’s

personal and economic relations are closer, regard shall be given to his

citizenship (if he is a citizen of one of the Contracting States).

(3) An individual who is deemed to be a resident of one of the Contracting

States for any year of income, or taxable year, as the case may be by reason of

the provisions of paragraph (2) shall, for all purposes of this Convention, be

deemed to be a resident only of that State for such year.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Convention, the term “permanent establishment”



(2) The term “permanent establishment” shall include especially:


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of

natural resources;

(g) an agricultural, pastoral or forestry property;

(h) a building site or construction, assembly or installation project which

exists for more than 9 months; and





(i) an installation, drilling rig or ship that, for an aggregate period of at

least 6 months in any 24 month period, is used by an enterprise of one

of the Contracting States in the other Contracting State for dredging or

for or in connection with the exploration or exploitation of natural

resources of the sea--bed and subsoil.

(3) Notwithstanding paragraphs (1) and (2), an enterprise of one of the

Contracting States shall not be regarded as having a permanent establishment

solely as a result of one or more of the following:

(a) the use of facilities for the purpose of storage, display or delivery of

goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the

enterprise for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the

enterprise for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business for the purpose of

purchasing goods or merchandise, or for collecting information, for the

enterprise;

(e) the maintenance of a fixed place of business for the purpose of activities

which have a preparatory or auxiliary character, such as advertising or

scientific research, for the enterprise;

(f) the maintenance of a building site or construction, assembly or

installation project which does not exist for more than 9 months; or

(g) the use by that enterprise in the other Contracting State, of an

installation, drilling rig or ship for dredging, or for or in connection

with the exploration or exploitation of natural resources of the sea--bed

and subsoil, provided that such use is not for an aggregate period of at

least 6 months in any 24 month period.

(4) Notwithstanding paragraphs (1) and (2), an enterprise of one of the

Contracting States shall be deemed to have a permanent establishment in the

other Contracting State if:

(a) it carries on business in that other State through a person, other than an

agent of independent status to whom paragraph (5) applies, who has

authority to conclude contracts on behalf of that enterprise and

habitually exercises that authority in that other State, unless the

activities of such person are limited to those mentioned in paragraph (3)

which, if exercised through a fixed place of business, would not make





that fixed place of business a permanent establishment under the

provisions of that paragraph;

(b) it maintains substantial equipment for rental or other purposes within

that other State (excluding equipment let under a hire--purchase

agreement) for a period of more than 12 months;

(c) it engages in supervisory activities in that other State for more than 9

months in any 24 month period in connection with a building site or

construction, assembly or installation project in that other State; or

(d) it has goods or merchandise belonging to it that:

(i) were purchased by it in that other State, and not subjected to prior

substantial processing outside that other State; or

(ii) were produced by it or on its behalf in that other State,

and are, after such purchase or production, subjected to substantial

processing in that other State by an enterprise where either enterprise

participates directly or indirectly in the management, control or capital

of the other enterprise, or where the same persons participate directly or

indirectly in the management, control or capital of the other enterprise,

or where the same persons participate directly or indirectly in the

management, control or capital of both enterprises.

(5) An enterprise of one of the Contracting States shall not be deemed to have

a permanent establishment in the other Contracting State merely because that

enterprise carries on business in that other State through a broker, general

commission agent, or any other agent of independent status, where such broker

or agent is acting in the ordinary course of his business as a broker, general

commission agent or other agent of independent status.

(6) The fact that a company which is a resident of one of the Contracting

States controls or is controlled by a company which is a resident of the other


through a permanent establishment or otherwise), shall not of itself constitute

either company a permanent establishment of the other.

(7) The principles set forth in the preceding paragraphs of this Article shall be

applied in determining for purposes of this Convention whether there is a

permanent establishment in a State other than one of the Contracting States and

whether an enterprise other than an enterprise of one of the Contracting States

has a permanent establishment in one of the Contracting States.





ARTICLE 6

Income from Real Property

(1) Income from real property may be taxed by the Contracting State in which

such real property is situated.

(2) For the purposes of this Convention:

(i) a leasehold interest in land, whether or not improved, shall be

regarded as real property situated where the land to which the interest

relates is situated; and

(ii) rights to exploit or to explore for natural resources shall be regarded as

real property situated where the natural resources are situated or

sought.

ARTICLE 7

Business Profits

(1) The business profits of an enterprise of one of the Contracting States shall

be taxable only in that State unless the enterprise carries on business in the other

Contracting State through a permanent establishment situated therein. If the

enterprise carries on business as aforesaid, the business profits of the enterprise

may be taxed in the other State but only so much of them as is attributable to

that permanent establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise of one of

the Contracting States carries on business in the other Contracting State through

a permanent establishment situated therein, there shall in each Contracting State

be attributed to that permanent establishment the business profits which it might

be expected to make if it were a distinct and independent enterprise engaged in

the same or similar activities under the same or similar conditions and dealing

wholly independently with the enterprise of which it is a permanent

establishment or with other enterprises with which it deals.

(3) In the determination of the business profits of a permanent establishment,

there shall be allowed as deductions expenses which are reasonably connected

with the profits (including executive and general administrative expenses) and

which would be deductible if the permanent establishment were an independent

entity which paid those expenses, whether incurred in the Contracting State in

which the permanent establishment is situated or elsewhere.

(4) No business profits shall be attributed to a permanent establishment by

reason of the mere purchase by that permanent establishment of goods or

merchandise for the enterprise.





(5) For the purposes of the preceding paragraphs of this Article, the business

profits to be attributed to the permanent establishment shall be determined by

the same method year by year unless there is good and sufficient reason to the

contrary.

(6) Where business profits include items of income which are dealt with



(7) Nothing in this Article shall affect the application of any law of a




establishment, provided that, on the basis of the available information, the

determination of the profits of the permanent establishment is consistent with

the principles stated in this Article.

(8) Nothing in this Article shall in a Contracting State prevent the operation in

that State of its law relating specifically to the taxation of any person who

carries on the business of any form of insurance (as long as that law as in effect

on the date of signature of this Convention is not varied otherwise than in minor

respects so as not to affect its general character).

ARTICLE 8

Shipping and Air Transport

(1) Profits derived by a resident of one of the Contracting States from the

operation in international traffic of ships or aircraft shall be taxable only in that

State. For the purposes of this Article, profits from the operation in international

traffic of ships or aircraft include:

(a) profits from the lease on a full basis of ships or aircraft operated in

international traffic by the lessee, provided that the lessor either

operates ships or aircraft otherwise than solely between places in the

other Contracting State or regularly leases ships or aircraft on a full

basis; and

(b) profits from the lease of ships or aircraft on a bare boat basis or of

containers and related equipment, provided that such lease is merely

incidental to the operation in international traffic of ships or aircraft by

the lessor and the leased ships or aircraft are operated in international

traffic, or the containers and related equipment are used in international

traffic, by the lessee.





(2) The provisions of paragraph (1) shall apply to the share of the profits from

the operation in international traffic of ships or aircraft derived by a resident of

one of the Contracting States through participation in a pool service, in a joint

transport operating organization or in an international operating agency.

(3) For the purposes of this Article, profits derived from the carriage by ships

or aircraft of passengers, livestock, mail, goods or merchandise shipped in a

Contracting State for discharge at another place in that State shall not be treated

as profits from the operation in international traffic of ships or aircraft and may

be taxed in that State.

ARTICLE 9

Associated Enterprises

(1) Where:

(a) an enterprise of one of the Contracting States participates directly or

indirectly in the management, control or capital of an enterprise of the

other Contracting State; or

(b) the same persons participate directly or indirectly in the management,

control or capital of an enterprise of one of the Contracting States and

an enterprise of the other Contracting State,




independently with one another, then any profits which, but for those

conditions, might have been expected to accrue to one of the enterprises, but, by



(2) Where profits on which an enterprise of one of the Contracting States has

been charged to tax in that State are also included, by virtue of paragraph (1), in

the profits of an enterprise of the other Contracting State and taxed accordingly,

and the profits so included are profits which might have been expected to have

accrued to that enterprise of the other State if the conditions operative between

the enterprises had been those which might have been expected to have

operated between independent enterprises dealing wholly independently with

one another, then the first--mentioned State shall make an appropriate

adjustment to the amount of tax charged on those profits in the first--mentioned

State. In determining such an adjustment, due regard shall be had to the other





provisions of this Convention and the competent authorities of the Contracting

States shall if necessary consult each other.


Contracting State relating to the determination of the tax liability of a person,

including determinations in cases where the information available to the

competent authority of that State is inadequate to determine the income to be

attributed to an enterprise, provided that, on the basis of the available

information, the determination of that tax liability is consistent with the

principles stated in this Article.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of one of the Contracting

States for the purposes of its tax, being dividends to which a resident of the

other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such dividends may be taxed in the Contracting State of which the

company paying the dividends is a resident for the purposes of its tax, and

according to the law of that State, but the tax so charged shall not exceed 15

percent of the gross amount of the dividends.

(3) The term “dividends” in this Article means income from shares and other

income assimilated to income from shares by the taxation law of the

Contracting State of which the company making the distribution is a resident for

the purposes of its tax.

(4) The provisions of paragraph (2) shall not apply if the person beneficially

entitled to the dividends, being a resident of one of the Contracting States,

carries on business in the other Contracting State, being the 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 provisions of Article 7 (Business Profits) or

Article 14 (Independent Personal Services), as the case may be, shall apply.

(5) Where a company is a resident of one of the Contracting States, the other

Contracting State may not impose any tax on dividends paid by the company,

except insofar as:

(a) a resident of that other State is beneficially entitled to the dividends;





(b) 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; or

(c) that other State does not impose a tax of the kind described in

paragraph (6) (excluding the accumulated earnings tax and the personal

holding company tax imposed by the United States) and the dividends

are paid out of profits attributable to one or more permanent

establishments which such company had in that other State, provided

that the gross income attributable to such permanent establishments

constituted at least 50 percent of such company’s gross income from all

sources.

Where sub--paragraph (c) applies and sub--paragraphs (a) and (b) do not apply,

any such tax shall not exceed 15 percent of the dividends.

(6) Nothing in this Convention shall be construed as preventing a Contracting

State from imposing on the income of a company which is a resident of the

other Contracting State, tax in addition to the taxes referred to in Article 2 in

relation to the first--mentioned Contracting State which are payable by a

company which is a resident of the first--mentioned State, provided that any

such additional tax shall not exceed 15 percent of the amount by which the

taxable income of the first--mentioned company of a year of income exceeds the

tax payable on that taxable income to the first--mentioned State. Any tax

payable to a Contracting State on the undistributed profits of a company which

is a resident of the other Contracting State shall be calculated as if that company

were not liable to the additional tax referred to in this paragraph and had paid

dividends of such amount that tax equal to the amount of that additional tax

would have been payable on the dividends in accordance with paragraph (2) of

this Article.

ARTICLE 11

Interest

(1) Interest from sources in one of the Contracting States, being interest to

which a resident of the other Contracting State is beneficially entitled, may be

taxed in that other State.

(2) Such interest may be taxed in the Contracting State in which it has its

source, and according to the law of that State, but the tax so charged shall not

exceed 10 percent of the gross amount of the interest.





(3) Paragraph (2) shall not apply if the person beneficially entitled to the

interest, being a resident of one of the Contracting States, has a permanent

establishment in the other Contracting State or performs independent personal

services in that other State from a fixed base situated therein and the

indebtedness giving rise to the interest is effectively connected with such

permanent establishment or fixed base. In such a case the provisions of Article

7 (Business Profits) or Article 14 (Independent Personal Services), as the case

may be, shall apply.

(4) Where, owing to a special relationship between the payer and the person

beneficially entitled to the interest, or between both of them and some other

person, the amount of the interest paid, having regard to the indebtedness for

which it is paid, exceeds the amount which might have been expected to have

been agreed upon by the payer and the person so entitled in the absence of such

relationship, the provisions of this Article shall apply only to the

last--mentioned amount. In that case, the excess part of the amount of the

interest paid shall remain taxable according to the law of each Contracting

State, but subject to the other provisions of this Convention.

(5) The term “interest” as used in this Convention includes income which,

under the taxation law of the Contracting State in which the income has its

source, is assimilated to income from money lent.

(6) A Contracting State may not impose any tax on interest paid by a resident

of the other Contracting State, except insofar as:

(a) such interest has its source in the first--mentioned State, or is interest to

which a resident of that State is beneficially entitled; or

(b) the indebtedness in respect of which the interest is paid is effectively

connected with a permanent establishment or a fixed base of the

beneficial owner of the interest situated in the first--mentioned State.

(7) Interest shall be treated as income from sources in a Contracting State

when the payer is that State itself or a political subdivision or local authority of

that State or a person who is a resident of that State for the purposes of its tax.

Where, however, the person paying the interest, whether he is a resident of one

of the Contracting States or not, has in one of the Contracting States or outside

both Contracting States a permanent establishment or fixed base in connection

with which the indebtedness on which the interest is paid was incurred, and

such interest is borne by such permanent establishment or fixed base, then such

interest shall be deemed to have its source in the State in which the permanent

establishment or fixed base is situated.





ARTICLE 12

Royalties

(1) Royalties from sources in one of the Contracting States, being royalties to



(2) Such royalties may be taxed in the Contracting State in which they have

their source, and according to the law of that State, but the tax so charged shall

not exceed 10 percent of the gross amount of the royalties.

(3) Paragraph (2) shall not apply if the person beneficially entitled to the

royalties, being a resident of one of the Contracting States, has a permanent

establishment in the other Contracting State or performs independent personal

services in that other State from a fixed base situated therein, and the property

or rights giving rise to the royalties are effectively connected with such

permanent establishment or fixed base. In such a case, the provisions of Article

7 (Business Profits) or Article 14 (Independent Personal Services), as the case


(4) The term “royalties” in this Article means:

(a) payments or credits of any kind to the extent to which they are

consideration for the use of or the right to use any:

(i) copyright, patent, design or model, plan, secret formula or

process, trademark or other like property or right;

(ii) industrial, commercial or scientific equipment, other than

equipment let under a hire purchase agreement;

(iii) motion picture films; or

(iv) films or video tapes for use in connection with television or tapes

for use in connection with radio broadcasting;

(b) payments or credits of any kind to the extent to which they are

consideration for:

(i) the supply of scientific, technical, industrial or commercial

knowledge or information owned by any person;

(ii) the supply of any assistance of an ancillary and subsidiary nature

furnished as a means of enabling the application or enjoyment of

knowledge or information referred to in sub--paragraph (b) (i) or

of any other property or right to which this Article applies; or

(iii) a total or partial forbearance in respect of the use or supply of any

property or right described in this paragraph; or





(c) income derived from the sale, exchange or other disposition of any

property or right described in this paragraph to the extent to which the

amounts realized on such sale, exchange or other disposition are

contingent on the productivity, use or further disposition of such

property or right.


beneficially entitled to the royalties or between both of them and some other

person, the amount of the royalties paid or credited, having regard to what they

are paid or credited for, exceeds the amount which might have been expected to

have been agreed upon by the payer and the person so entitled in the absence of

such relationship, the provisions of this Article shall apply only to the


royalties paid or credited shall remain taxable according to the law of each

Contracting State, but subject to the other provisions of this Convention.

(6) (a) Royalties shall be treated as income from sources in a Contracting State

when the payer is that State itself or a political subdivision or local

authority of that State or a person who is a resident of that State for the

purposes of its tax. Where, however, the person paying the royalties,

whether he is a resident of one of the Contracting States or not, has in

one of the Contracting States or outside both Contracting States a

permanent establishment or fixed base in connection with which the

liability to pay the royalties was incurred, and the royalties are borne by

the permanent establishment or fixed base, then the royalties shall be

deemed to have their source in the State in which the permanent


(b) Where sub--paragraph (a) does not operate to treat royalties as being

from sources in one of the Contracting States, and the royalties relate to

use or the right to use in one of the Contracting States of any property

or right described in paragraph (4), the royalties shall be treated as

income from sources in that State.

ARTICLE 13

Alienation of Property

(1) Income or gains derived by a resident of one of the Contracting States from

the alienation or disposition of real property situated in the other Contracting

State may be taxed in that other State.





(2) For the purposes of this Article:

(a) the term “real property situated in the other Contracting State”, where

the United States is that other Contracting State, includes a United

States real property interest, and real property referred to in Article 6

which is situated in the United States; and

(b) the term “real property”, in the case of Australia, shall have the

meaning which it has under the laws in force from time to time in

Australia and, without limiting the foregoing, includes:

(i) real property referred to in Article 6;

(ii) shares or comparable interests in a company, the assets of which

consist wholly or principally of real property situated in

Australia; and

(iii) an interst in a partership, trust or estate of a deceased individual,

the assets of which consist wholly or principally of real property

situated in Australia.

(3) Income or gains derived by an enterprise of one of the Contracting States

from the alienation of ships, aircraft or containers operated or used by it in

international traffic shall, except to the extent to which that enterprise has been

allowed depreciation in the other Contracting State in respect of those ships,

aircraft or containers, be taxable only in that State, and income described in

sub--paragraph (4) (c) of Article 12 (Royalties) shall be taxable only in

accordance with the provisions of Article 12.

(4) For the purposes of this Article, real property consisting of shares in a

company referred to in sub--paragraph (2) (b) (ii), and interests in a partnership,

trust or estate referred to in sub--paragraph (2) (b) (iii), shall be deemed to be

situated in Australia.

ARTICLE 14

Independent Personal Services

Income derived by an individual who is a resident of one of the Contracting

States from the performance of personal services in an independent capacity

shall be taxable only in that State unless such services are performed in the

other Contracting State and:

(a) the individual is present in that other State for a period or periods

aggregating more than 183 days in the taxable year or year of income of

that other State; or





(b) the individual has a fixed base regularly available to him in that other

State for the purpose of performing his activities, in which case so much

of the income as is attributable to that fixed base may be taxed in such

other State.

ARTICLE 15

Dependent Personal Services

(1) Subject to the provisions of Articles 18 (Pensions, Annuities, Alimony and

Child Support) and 19 (Governmental Remuneration), salaries, wages and other

similar remuneration derived by an individual who is a resident of one of the

Contracting States in respect of an employment or in respect of services

performed as a director of a company shall be taxable only in that State unless

the employment is exercised or the services performed in the other Contracting

State. If the employment is so exercised or the services so performed, such

remuneration as is derived from that exercise or performance may be taxed in

that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by

an individual who is a resident of one of the Contracting States in respect of an

employment exercised in the other Contracting State or in respect of services

performed in the other Contracting State as a director of a company shall be

taxable only in the first--mentioned State if:

(a) the recipient is present in that other State for a period or periods not

exceeding in the aggregate 183 days in the taxable year or year of

income of that other State;

(b) the remuneration is paid by, or on behalf of, an employer or company

who is not a resident of that other State; and

(c) the remuneration is not deductible in determining taxable profits of a

permanent establishment, a fixed base or a trade or business which the

employer or company has in that other State.

(3) Notwithstanding the preceding provisions of this Article, remuneration in

respect of an employment exercised aboard a ship or aircraft operated in

international traffic by a resident of one of the Contracting States may be taxed

in that State.





ARTICLE 16

Limitation on Benefits

(1) A person (other than an individual) which is a resident of one of the

Contracting States shall not be entitled under this Convention to relief from

taxation in the other Contracting State unless:

(a) more than 75 percent of the beneficial interest in such person (or in the

case of a company, more than 75 percent of the number of shares of

each class of the company’s shares) is owned, directly or indirectly, by

any combination of one or more of:

(i) individuals who are residents of the United States;

(ii) citizens of the United States;

(iii) individuals who are residents of Australia;

(iv) companies as described in sub--paragraph (b); and

(v) the Contracting States;

(b) it is a company in whose principal class of shares there is substantial

and regular trading on a recognized stock exchange in one of the

Contracting States; or

(c) the establishment, acquisition and maintenance of such person and the

conduct of its operations did not have as one of its principal purposes

the purpose of obtaining benefits under the Convention.

(2) For the purposes of sub--paragraph (1) (b), the term “a recognized stock

exchange” includes, in relation to the United States, the NASDAQ System

owned by the National Association of Securities Dealers, Inc.

(3) Where:

(a) income derived by a trustee is to be treated for the purposes of this

Convention as income of a resident of one of the Contracting States;

and

(b) the trustee derived the income in connection with a scheme a principal

purpose of which was to obtain a benefit under this Convention,

then, notwithstanding any other provision of this Convention, the Convention

does not apply in relation to that income.





ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 (Independent Personal

Services) and 15 (Dependent Personal Services), income derived by entertainers

(such as theatrical, motion picture, radio or television artistes, musicians and

athletes) from their personal activities as such may be taxed in the Contracting

State in which these activities are exercised, except where the amount of the

gross receipts derived by any such entertainer, including expenses reimbursed to

him or borne on his behalf, from such activities does not exceed ten thousand

United States dollars ($10,000) or its equivalent in Australian dollars for the

taxable year or year of income concerned.

(2) Where income in respect of activities exercised by an entertainer in his

capacity as such accrues not to the entertainer but to another person, that

income may, notwithstanding the provisions of Articles 7 (Business Profits), 14

(Independent Personal Services) and 15 (Dependent Personal Services), be

taxed in the Contracting State in which the activities of the entertainer are

exercised, unless it is established that neither the entertainer nor any person

related to him participates directly or indirectly in any profits of such other

person in any manner, including the receipt of deferred remuneration, bonuses,

fees, dividends, partnership distributions or other distributions.

ARTICLE 18

Pensions, Annuities, Alimony and Child Support

(1) Subject to the provisions of Article 19 (Governmental Remuneration),

pensions and other similar remuneration paid to an individual who is a resident

of one of the Contracting States in consideration of past employment shall be

taxable only in that State.

(2) Social security payments and other public pensions paid by one of the

Contracting States to an individual who is a resident of the other Contracting

State or a citizen of the United States shall be taxable only in the

first--mentioned State.

(3) Annuities paid to an individual who is a resident of one of the Contracting

States shall be taxable only in that State.

(4) The term “pensions and other similar remuneration”, as used in this

Article, means periodic payments made by reason of retirement or death, in





consideration for services rendered, or by way of compensation paid after

retirement for injuries received in connection with past employment.

(5) The term “annuities”, as used in this Article, means stated sums paid

periodically at stated times during life, or during a specified or ascertainable

number of years, under an obligation to make the payments in return for

adequate and full consideration (other than services rendered or to be rendered).

(6) Any alimony or other maintenance payments, including payments for the

support of a minor child, arising in one of the Contracting States and paid to a

resident of the other Contracting State, shall be taxable only in the


ARTICLE 19

Governmental Remuneration

Wages, salaries, and similar remuneration, including pensions, paid from

funds of one of the Contracting States, of a state or other political subdivision

thereof or of an agency or authority of any of the foregoing for labor or personal

services performed as an employee of any of the above in the discharge of

governmental functions to a citizen of that State shall be exempt from tax by the

other Contracting State.

ARTICLE 20

Students

Where a student, who is a resident of one of the Contracting States or who

was a resident of that State immediately before visiting the other Contracting

State and who is temporarily present in that other State for the purpose of his

full--time education, receives payments from sources outside that other State for

the purpose of his maintenance or education, those payments shall be exempt

from tax in that other State.

ARTICLE 21

Income Not Expressly Mentioned

(1) Items of income of a resident of one of the Contracting States which are

not expressly mentioned in the foregoing Articles of this Convention shall be






(2) However, if such income is derived by a resident of one of the Contracting

States from sources in the other Contracting State, such income may also be

taxed in the State in which it has its source.

(3) The provisions of paragraph (1) shall not apply to income derived by a

resident of one of the Contracting States which is effectively connected with a

permanent establishment situated in the other Contracting State. In such a case,

the provisions of Article 7 (Business Profits) shall apply.

ARTICLE 22

Relief from Double Taxation

(1) Subject to paragraph (4) and in accordance with the provisions and subject

to the limitations of the law of the United States (as it may be amended from

time to time without changing the general principle hereof), in the case of the

United States, double taxation shall be avoided as follows:

(a) the United States shall allow to a resident or citizen of the United States

as a credit against United States tax the appropriate amount of income

tax paid to Australia; and

(b) in the case of a United States corporation owning at least 10 percent of

the voting stock of a company which is a resident of Australia from

which it receives dividends in any taxable year, the United States shall

also allow as a credit against United States tax the appropriate amount

of income tax paid to Australia by that company with respect to the

profits out of which such dividends are paid.

Such appropriate amount shall be based upon the amount of income tax paid to

Australia. For purposes of applying the United States credit in relation to

income tax paid to Australia the taxes referred to in sub--paragraph (1) (b) and

paragraph (2) of Article 2 (Taxes Covered) shall be considered to be income

taxes. No provision of this Convention relating to source of income shall apply

in determining credits against United States tax for foreign taxes other than

those referred to in sub--paragraph (1) (b) and paragraph (2) of Article 2 (Taxes

Covered).

(2) Subject to paragraph (4), United States tax paid under the law of the United

States and in accordance with this Convention, other than United States tax

imposed in accordance with paragraph (3) of Article 1 (Personal Scope) solely

by reason of citizenship or by reason of an election by an individual under

United States domestic law to be taxed as a resident of the United States, in

respect of income derived from sources in the United States by a person who,





under Australian law relating to Australian tax, is a resident of Australia shall

be allowed as a credit against Australian tax payable in respect of the income.

The credit shall not exceed the amount of Australian tax payable on the income

or any class thereof or on income from sources outside Australia. Subject to

these general principles, the credit shall be in accordance with the provisions

and subject to the limitations of the law of Australia as that law may be in force

from time to time.

(3) An Australian corporation that owns at least 10 percent of the voting power

in a United States corporation is, in accordance with the law of Australia as in

force at the date of signature of this Convention, entitled to a rebate in its

assessment, at the average rate of tax payable by it, in respect of dividends paid

by the United States corporation that are included in the taxable income of the

Australian corporation. However, should the law as so in force be amended so

that the rebate in relation to the dividends ceases to be allowable under that law,

Australia shall allow credit under paragraph (2) for the United States tax paid on

the profits out of which the dividends are paid as well as for the United States

tax paid on the dividends.

(4) For the purposes of computing United States tax, where a United States

citizen is a resident of Australia, the United States shall allow as a credit against

United States tax the income tax paid to Australia after the credit referred to in

paragraph (2). The credit so allowed against United States tax shall not reduce

that portion of the United States tax that is creditable against Australian tax in

accordance with paragraph (2).

ARTICLE 23

Non--Discrimination

(1) Each Contracting State in enacting tax measures shall ensure that:

(a) citizens of a Contracting State who are residents of the other

Contracting State shall not be subjected in that other State to any

taxation or any requirement connected therewith which is more

burdensome than the taxation or connected requirements to which

citizens of that other State who are residents of that other State in the

same circumstances are or may be subjected;

(b) except where the provisions of paragraph (1) of Article 9 (Associated

Enterprises), paragraph (4) of Article 11 (Interest) or paragraph (5) of

Article 12 (Royalties) apply, interest, royalties and other disbursements

paid by a resident of a Contracting State to a resident of the other

Contracting State shall, for the purpose of determining the taxable





profits of the resident of the first--mentioned State, be deductible under

the same conditions as if they had been paid to a resident of the

first--mentioned State;

(c) a corporation of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by one or more

residents of the other Contracting State, shall not be subjected in the

first--mentioned State to any taxation or any requirement connected

therewith which is more burdensome than the taxation or connected

requirements to which other similar corporations of the first--mentioned

State in the same circumstances are or may be subjected; and

(d) the taxation on a permanent establishment which a resident of a

Contracting State has in the other Contracting State shall not be less

favorably levied in that other State than the taxation levied on residents

of that other State that carry on the same activities in the same

circumstances.

(2) Nothing in this Article relates to any provision of the taxation laws of a

Contracting State:

(a) in force on the date of signature of this Convention;

(b) adopted after the date of signature of this Convention but which is

substantially similar in general purpose or intent to a provision covered

by subparagraph (a); or

(c) reasonably designed to prevent the avoidance or evasion of taxes;

provided that, with respect to provisions covered by subparagraphs (b) or (c),

such provisions (other than provisions in international agreements) do not

discriminate between citizens or residents of the other Contracting State and

those of any third State.

(3) Without limiting by implication the interpretation of this Article, it is

hereby declared that, except to the extent expressly so provided, nothing in the

Article prevents a Contracting State from distinguishing in its taxation laws

between residents and non--residents solely on the ground of their residence.

(4) Where one of the Contracting States considers that the taxation measures

of the other Contracting State infringe the principles set forth in this Article the

Contracting States shall consult together in an endeavor to resolve the matter.





ARTICLE 24

Mutual Agreement Procedure

(1) (a) Where a resident of one of the Contracting States considers that the

action of one or both of the Contracting States results or will result for

him in taxation not in accordance with this Convention, he may,

notwithstanding the remedies provided by the domestic laws of those

States, present his case to the competent authority of the Contracting

State of which he is a resident or citizen. The case must be presented

within three years from the first notification of that action.

(b) Should the claim be considered to have merit by the competent

authority of the Contracting State to which the claim is made, that

competent authority shall seek to come to an agreement with the

competent authority of the other Contracting State with a view to the

avoidance of taxation contrary to the provisions of this Convention.

Any agreement reached shall be implemented notwithstanding any time

limits or other procedural limitations in the domestic law of the

Contracting States.

(2) The competent authorities of the Contracting States shall seek to resolve by

agreement any difficulties or doubts arising as to the application or

interpretation of this Convention. In particular the competent authorities of the

Contracting States may agree:

(a) to the same attribution of income, deductions, credits, or allowances of

an enterprise of one of the Contracting States to its permanent

establishment situated in the other Contracting State;

(b) to the same allocation of income, deductions, credits, or allowances

between persons;

(c) to the same determination of the source of particular items of income;

(d) to the same meaning of any term used in this Convention; or

(e) to which of the Contracting States an individual described in

subparagraph (2) (c) of Article 4 (Residence) has closer personal and

economic relations.

(3) The competent authorities of the Contracting States may communicate with

each other directly for the purpose of reaching an agreement in the sense of this

Article.





ARTICLE 25

Exchange of Information

(1) The competent authorities shall exchange such information as is necessary

for carrying out the provisions of this Convention or for the prevention of fraud

or for the administration of statutory provisions concerning taxes to which this

Convention applies provided the information is of a class that can be obtained

under the laws and administrative practices of each Contracting State with

respect to its own taxes.

(2) Any information so exchanged shall be treated as secret and shall not be

disclosed to any persons other than those (including a Court or administrative

body) concerned with the assessment, collection, administration or enforcement

of, or with litigation with respect to, the taxes to which this Convention applies.

(3) No information shall be exchanged which would be contrary to public

policy.

(4) If specifically requested by the competent authority of one of the

Contracting States, the competent authority of the other Contracting State shall

provide information under this Article in the form of copies of unedited original

documents (including books, papers, statements, records, accounts or writings)

to the same extent such documents can be obtained under the laws and

administrative practices of that other State with respect to its own taxes.

(5) Each of the Contracting States shall endeavor to collect on behalf of the

other Contracting State amounts equal to such taxes imposed by the other State

as will ensure that any exemption or reduction in rate of tax granted under this

Convention by that other State shall not be enjoyed by persons not entitled to

such benefits.

ARTICLE 26

Diplomatic and Consular Privileges

Nothing in this Convention shall affect diplomatic and consular privileges

under the general rules of international law or under the provisions of special

agreements.

ARTICLE 27

Miscellaneous

(1) (a) Income derived by a resident of the United States which, under this

Convention, may be taxed in Australia shall for the purposes of the





income tax law of Australia and of this Convention be deemed to be

income from sources in Australia.

(b) Income derived by a resident of Australia which, under this Convention,

may be taxed in the United States, other than income taxed by the

United States in accordance with paragraph (3) of Article 1 (Personal

Scope) solely by reason of citizenship or by reason of an election by an

individual under United States domestic law to be taxed as a resident of

the United States, shall for the purposes of paragraph (2) of Article 22

(Relief from Double Taxation) and of the income tax law of Australia

be deemed to be income from sources in the United States.

(c) Where paragraph (4) of Article 22 (Relief from Double Taxation)

applies, income referred to in that paragraph shall be deemed to have its

source in Australia to the extent necessary to give effect to the

provisions of that paragraph.

(2) Any exemption from tax by one of the Contracting States provided for in

Article 14 (Independent Personal Services), 15 (Dependent Personal Services),

17 (Entertainers) or 19 (Governmental Remuneration) shall be inapplicable to

the extent that the income to which the exemption relates is not or, upon the

application of the relevant Article of this Convention (prior to application of

this paragraph), will not be subject to tax by the other Contracting State.

ARTICLE 28

Entry into Force

(1) This Convention shall be subject to ratification in accordance with the

applicable procedures of each Contracting State, and instruments of ratification

shall be exchanged at Washington, D.C., as soon as possible.

(2) The Convention shall enter into force upon the exchange of instruments of

ratification and its provisions shall have effect:

(a) with respect to those dividends, interest and royalties to which Articles

10 (Dividends), 11 (Interest) and 12 (Royalties), respectively, apply and

which are paid, credited or otherwise derived on or after the first day of

the second month following the date on which the Convention enters

into force; and

(b) with respect to all other income of a taxpayer, for the taxpayer’s years

of income or taxable years, as the case may be, commencing on or after

the first day of the second month following the date on which the






(3) Subject to paragraph (4), the Convention between the Government of the

United States of America and the Government of the Commonwealth of

Australia for the Avoidance of Double Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on Income signed at Washington on May 14,

1953 (in this Article referred to as the 1953 Convention) shall cease to have

effect with respect to taxes to which this Convention applies under

paragraph (2).

(4) The 1953 Convention shall terminate on the expiration of the last date on

which it has effect in accordance with the foregoing provisions of this Article.

ARTICLE 29

Termination

(1) This Convention shall remain in force until terminated by a Contracting

State. Either Contracting State may terminate the Convention at any time after 5

years from the date on which the Convention enters into force, provided that at

least 6 months prior notice of termination has been given through the diplomatic

channel. In such event, the Convention shall cease to have effect:

(a) with respect to those dividends, interest and royalties to which Articles

10 (Dividends), 11 (Interest) and 12 (Royalties) respectively apply, and

which are paid, credited or otherwise derived on or after the first day of

January following the expiration of the 6 month period; and

(b) with respect to all other income of a taxpayer, for the taxpayer’s years

of income or taxable years, as the case may be, commencing on or after

the first day of January following the expiration of the 6 month period.

(2) Notwithstanding the provisions of paragraph (1), upon prior notice to be

given through the diplomatic channel, the provisions of paragraph (2) of Article

18 (Pensions, Annuities, Alimony and Child Support) may be terminated by

either Contracting State at any time after this Convention enters into force.

DONE in duplicate at Sydney this sixth day of August 1982.

JOHN HOWARD R.D. NESEN

FOR THE GOVERNMENT OF

AUSTRALIA

FOR THE GOVERNMENT OF THE

UNITED STATES OF AMERICA

United States protocol Schedule 2A


Schedule 2A—United States protocol Note: See section 3.

PROTOCOL AMENDING THE CONVENTION BETWEEN THE

GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE

UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL

EVASION WITH RESPECT TO TAXES ON INCOME

The Government of Australia and the Government of the United States of

America,

Desiring to amend the Convention between the Government of Australia and

the Government of the United States of America for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

signed at Sydney on the sixth day of August 1982 (in this Protocol referred to as

“the Convention”),


ARTICLE 1

Article 1 of the Convention is amended by:

(a) inserting in the last sentence of paragraph (3) “or long-term

resident” after “include a former citizen”; and

Schedule 2A United States protocol


(b) by omitting in the last sentence of paragraph (3) “citizenship” and

substituting “such status”.

ARTICLE 2

Article 2 of the Convention is amended by omitting paragraph (1) and

substituting:

“(1) The existing taxes to which this Convention shall apply are:

(a) in the United States: the Federal income taxes imposed by

the Internal Revenue Code; and

(b) in Australia:

(i) the Australian income tax, including tax on capital gains;

and

(ii) the resource rent tax in respect of offshore projects relating

to exploration for or exploitation of petroleum resources,

imposed under the federal law of Australia.”.

ARTICLE 3


(a) deleting “or” at the end of sub-paragraph (1)(b)(i) and inserting

after that sub-paragraph the following:

“(ii) a United States citizen, other than a United States citizen

who is a resident of a State other than Australia for the purposes



of a double tax agreement between that State and Australia; or”;

and

(b) renumbering sub-paragraph (1)(b)(ii) as sub-paragraph (1)(b)(iii).

ARTICLE 4

Article 7 of the Convention is amended by inserting:

“(9) Where:

(a) a resident of one of the Contracting States is beneficially entitled,

whether directly or through one or more interposed fiscally transparent

entities, to a share of the business profits of an enterprise carried on in the

other Contracting State by the fiscally transparent entity (or, in the case of

a trust, by the trustee of the trust estate); and

(b) in relation to that enterprise, that fiscally transparent entity (or

trustee) would, in accordance with the principles of Article 5 (Permanent

Establishment), have a permanent establishment in that other State, that

enterprise carried on by that fiscally transparent entity (or trustee) shall be

deemed to be a business carried on in the other State by that resident

through a permanent establishment situated in that other State and that

share of business profits shall be attributed to that permanent

establishment.”.



ARTICLE 5


(a) omitting sub-paragraph (1)(b) and substituting:

“(b) profits from the lease of ships or aircraft on a bare boat

basis, provided that such lease is merely incidental to the

operation in international traffic of ships or aircraft by the

lessor.”; and

(b) omitting paragraphs (2) and (3) and substituting:

“(2) Profits of an enterprise of one of the Contracting States

from the use, maintenance, or rental of containers (including

trailers, barges, and related equipment for the transport of

containers) used in international traffic shall be taxable only in

that State.

(3) The profits to which the provisions of paragraphs (1) and

(2) apply include profits from the participation in a pool service

or other profit sharing arrangement.

(4) For the purposes of this Article, profits derived from the

carriage by ships or aircraft of passengers, livestock, mail, goods

or merchandise taken on board in a Contracting State for

discharge in that State shall not be treated as profits from the



operation in international traffic of ships or aircraft and may be

taxed in that State.”.

ARTICLE 6

Article 10 of the Convention is omitted and the following Article is substituted:

“ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of one of the

Contracting States for the purposes of its tax, being dividends to which a

resident of the other Contracting State is beneficially entitled, may be taxed in

that other State.

(2) However, those dividends may also be taxed in the Contracting State of

which the company paying the dividends is a resident for the purposes of its tax,

and according to the law of that State, but:

(a) the tax charged shall not exceed 5 percent of the gross amount of

the dividends, if the person beneficially entitled to those dividends is a

company which holds directly at least 10 percent of the voting power in

the company paying the dividends; and

(b) the tax charged shall not exceed 15 percent of the gross amount

of the dividends to the extent to which those dividends are not within

sub-paragraph (a),



provided that if the relevant law in either Contracting State is varied after the

effective date of this provision otherwise than in minor respects so as not to

affect its general character, the Contracting States shall consult each other with

a view to agreeing to any amendment of this paragraph that may be appropriate.

(3) Notwithstanding the provisions of paragraph (2), dividends shall

not be taxed in the Contracting State of which the company paying the

dividends is a resident if the person who is beneficially entitled to the

dividends is a company that is a resident of the other Contracting State that

has owned shares representing 80 percent or more of the voting power of

the company paying the dividends for a 12-month period ending on the

date the dividend is declared and:

(a) is a qualified person by reason of sub-paragraph (c) of

paragraph (2) of Article 16 (Limitation on Benefits); or

(b) is entitled to benefits with respect to the dividends under

paragraph (5) of that Article.

(4) (a) Sub-paragraph (a) of paragraph (2) and paragraph (3) shall not

apply in the case of dividends paid by a Regulated Investment Company

(RIC) or a Real Estate Investment Trust (REIT).

(b) In the case of dividends paid by a RIC, sub-paragraph (b) of

paragraph (2) shall apply.



(c) In the case of dividends paid by a REIT, sub-paragraph (b) of

paragraph (2) shall apply only if:

(i) the person beneficially entitled to the dividends is an

individual holding an interest of not more than 10 percent

in the REIT;

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

is publicly traded and the person beneficially entitled to the

dividends holds an interest of not more than 5 percent of

any class of the REIT’s stock; or

(iii) the person beneficially entitled to the dividends holds an

interest of not more than 10 percent in the REIT and the

gross value of no single interest in real property held by the

REIT exceeds 10 percent of the gross value of the REIT’s

total interest in real property.

(d) Notwithstanding sub-paragraph (c), sub-paragraph (b) of

paragraph (2) shall apply with respect to dividends paid by a REIT to a

listed Australian property trust (“LAPT”). However, if the responsible

entity for the LAPT knows or has reason to know that one or more

unitholders each owns 5 percent or more of the beneficial interests in the

LAPT, each of such 5 percent or more unitholders shall, for purposes of

this paragraph, be deemed to hold such proportion of the LAPT’s direct



interest in the REIT as equals that person’s proportionate interest in the

LAPT and shall be deemed to be beneficially entitled to the REIT

dividends paid with respect thereto, and the provisions of

sub-paragraph (c) shall apply to that person. For purposes of this

paragraph, dividends paid with respect to REIT shares held by an LAPT

shall be deemed to be paid with respect to a class of stock that is publicly

traded. For these purposes, a “listed Australian property trust” means an

Australian unit trust registered as a “Managed Investment Scheme” under

the Australian Corporations Act in which the principal class of units is

listed on a recognized stock exchange in Australia and regularly traded on

one or more recognized stock exchanges (as defined in Article 16

(Limitation on Benefits)).

(5) The above provisions of this Article shall not apply if the person

beneficially entitled to 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

in that other State, or performs in that other State independent personal services

from a fixed base situated in that other State, and the holding in respect of

which the dividends are paid is effectively connected with that permanent

establishment or fixed base. In that case the provisions of Article 7 (Business



Profits) or Article 14 (Independent Personal Services), as the case may be, shall

apply.

(6) The term “dividends” as used in this Article means income from shares,

as well as other amounts which are subjected to the same taxation treatment as

income from shares by the law of the State of which the company making the

distribution is a resident for the purposes of its tax.

(7) Where a company which is a resident of a Contracting State derives


impose any tax on the dividends paid by the company—being dividends to

which a person who is not a resident of the other Contracting State is

beneficially entitled—except insofar as the holding in respect of which such

dividends are paid is effectively connected with a permanent establishment or a

fixed base situated in that other State, nor may it impose tax on a company’s

undistributed profits, except as provided in paragraph (8), even if the dividends

paid consist wholly or partly of profits or income arising in such other State.

(8) A company which is a resident of one of the Contracting States

and that has a permanent establishment in the other State or that is subject

to tax in the other State on a net basis on its income or gains that may be

taxed in the other State under Article 6 (Income from Real Property) or

under paragraph (1) or (3) of Article 13 (Alienation of Property) may be

subject in that other State to a tax in addition to the tax allowable under the



other provisions of this Convention. Such tax, however, may be imposed

on only the portion of the business profits of the company attributable to

the permanent establishment and the portion of the income or gains

referred to in the preceding sentence that is subject to tax under Article 6

(Income from Real Property) or under paragraph (1) or (3) of Article 13

(Alienation of Property) that, in the case of the United States, represents

the dividend equivalent amount of such profits, income or gains and, in the

case of Australia, is an amount that is analogous to the dividend equivalent

amount. This paragraph shall not apply in the case of a company which:

(a) is a qualified person by reason of sub-paragraph (c) of

paragraph (2) of Article 16 (Limitation on Benefits) of this Convention;

or

(b) is entitled to benefits with respect to the dividends under

paragraph (5) of that Article.

(9) The tax referred to in paragraph (8) may not be imposed at a rate in

excess of the rate specified in sub-paragraph (a) of paragraph (2).”.

ARTICLE 7


“ARTICLE 11

Interest



(1) Interest arising in one of the Contracting States, being interest to which

a resident of the other Contracting State is beneficially entitled, may be taxed in

that other State.

(2) However, that interest may also be taxed in the Contracting State in


shall not exceed 10 percent of the gross amount of the interest.

(3) Notwithstanding paragraph (2), interest arising in one of the

Contracting States to which a resident of the other Contracting State is

beneficially entitled may not be taxed in the first-mentioned State if:

(a) the interest is derived by one of the Contracting States or by a

political or administrative sub-division or a local authority thereof, or

by any other body exercising governmental functions in a Contracting

State, or by a bank performing central banking functions in a

Contracting State;

(b) the interest is derived by a financial institution which is unrelated

to and dealing wholly independently with the payer. For the purposes of

this Article, the term “financial institution” means a bank or other

enterprise substantially deriving its profits by raising debt finance in the

financial markets or by taking deposits at interest and using those funds

in carrying on a business of providing finance.



(4) (a) Notwithstanding paragraph (3), interest referred to in

sub-paragraph (b) of that paragraph may be taxed in the State in which

it arises at a rate not exceeding 10 percent of the gross amount of the

interest if the interest is paid as part of an arrangement involving

back-to-back loans or other arrangement that is economically equivalent

and intended to have a similar effect to back-to-back loans.

(b) Nothing in this Article shall be construed as restricting, in any

manner, the right of a Contracting State to apply any anti-avoidance

provisions of its taxation law.

(5) The term “interest” in this Article means interest from government

securities or from bonds or debentures (including premiums attaching to such

securities, bonds or debentures), whether or not secured by mortgage and

whether or not carrying a right to participate in profits, interest from any other

form of indebtedness, as well as income which is subjected to the same taxation

treatment as income from money lent by the law of the Contracting State in

which the income arises. Income dealt with in Article 10 (Dividends) and

penalty charges for late payment shall not be regarded as interest for the

purposes of this Article.

(6) The provisions of paragraphs (1), (2), (3) and (4) shall not apply if the

person beneficially entitled to the interest, being a resident of one of the

Contracting States, carries on business in the other Contracting State, in which



the interest arises, through a permanent establishment situated in that other

State, or performs in that other State independent personal services from a fixed

base situated in that other State, and the indebtedness in respect of which the

interest is paid is effectively connected with that permanent establishment or

fixed base. In that case the provisions of Article 7 (Business Profits) or Article

14 (Independent Personal Services), as the case may be, shall apply.

(7) Interest shall be deemed to arise in a Contracting State when the payer

is a resident of that State for the purposes of its tax. Where, however, the person


not, has in a Contracting State a permanent establishment or fixed base in

connection with which the indebtedness on which the interest is paid was

incurred, and that interest is borne by that permanent establishment or fixed

base, then the interest shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.

(8) Where, by reason of a special relationship between the payer and the

person beneficially entitled to the interest, or between both of them and some

other person, the amount of the interest paid, having regard to the indebtedness

for which it is paid, exceeds the amount which might reasonably have been

expected to have been agreed upon by the payer and the person so entitled in the

absence of that relationship, the provisions of this Article shall apply only to the

last-mentioned amount. In that case the excess part of the amount of the interest



paid shall remain taxable according to the law of each Contracting State, due

regard being had to the other provisions of this Convention.

(9) Notwithstanding the provisions of paragraphs (1), (2), (3) and (4):

(a) interest that is paid by a resident of one of the Contracting

States and that is determined with reference to the profits of the issuer

or of one of its associated enterprises, as defined in sub-paragraph (a) or

(b) of paragraph (1) of Article 9 (Associated Enterprises), being interest

to which a resident of the other State is beneficially entitled, also may

be taxed in the Contracting State in which it arises, and according to the

laws of that State, at a rate not exceeding 15 percent of the gross

amount of the interest; and

(b) interest that is paid with respect to the ownership interests in a

person used for the securitization of real estate mortgages or other

assets, to the extent that the amount of interest paid exceeds the normal

rate of return on publicly-traded debt instruments with a similar risk

profile, may be taxed by each State in accordance with its domestic law.

(10) Where interest expense is deductible in determining the profits, income

or gains of a company resident in one of the Contracting States, being profits,

income or gains which:

(a) are attributable to a permanent establishment of that company in




(b) may be taxed in the other Contracting State under Article 6

(Income from Real Property) or paragraph (1) or (3) of Article 13

(Alienation of Property),

and that interest expense exceeds the interest paid by that permanent

establishment or paid with respect to the debt secured by real property located

in the other Contracting State, the amount of that excess shall be deemed to be

interest arising in that other Contracting State to which a resident of the

first-mentioned Contracting State is beneficially entitled.”.

ARTICLE 8


(a) omitting “10” and substituting “5” in paragraph (2); and

(b) omitting sub-paragraph (a) of paragraph (4) and substituting:

“(a) payments or credits of any kind to the extent to which they are

consideration for the use of or the right to use any:


process, trademark or other like property or right;

(ii) motion picture films; or

(iii) films or audio or video tapes or disks, or any other means

of image or sound reproduction or transmission for use in

connection with television, radio or other broadcasting;”.



ARTICLE 9


(a) omitting paragraph (3) and substituting:

“(3) Income or gains from the alienation of property, other than

real property, that forms part of the business property of a permanent

establishment which an enterprise of one of the Contracting States has

in the other Contracting State or pertains to a fixed base available in that

other State to a resident of the first-mentioned State for the purpose of

performing independent personal services, including income or gains

from the alienation of that permanent establishment (alone or with the

whole enterprise) or of that fixed base, may be taxed in that other State.

(4) Income or gains derived by an enterprise of one of the

Contracting States from the alienation of ships, aircraft or containers

operated or used in international traffic or property, other than real

property, pertaining to the operation or use of such ships, aircraft, or

containers shall be taxable only in that State.

(5) Where an individual who, upon ceasing to be a resident of one

of the Contracting States, is treated under the taxation law of that State

as having alienated any property and is taxed in that State by reason

thereof, the individual may elect to be treated for the purposes of



taxation in the other Contracting State as if the individual had,

immediately before ceasing to be a resident of the first-mentioned State,

alienated and re-acquired the property for an amount equal to its fair

market value at that time.

(6) An individual who elects, under the taxation law of a

Contracting State, to defer taxation on income or gains relating to

property which would otherwise be taxed in that State upon the

individual ceasing to be a resident of that State for the purposes of its

tax, shall, if the individual is a resident of the other State, be taxable on

income or gains from the subsequent alienation of that property only in

that other State.

(7) Except as provided in the preceding paragraphs of this Article,

each Contracting State may tax capital gains in accordance with the

provisions of its domestic law.”; and

(b) renumbering paragraph (4) as paragraph (8).

ARTICLE 10


“ARTICLE 16

Limitation on Benefits



(1) Except as otherwise provided in this Article, a resident of one of the

Contracting States that derives income from the other Contracting State shall

not be entitled to the benefits of this Convention otherwise accorded to residents

of one of the Contracting States unless such resident is a “qualified person” as

defined in paragraph (2).

(2) A resident of one of the Contracting States shall be a qualified person

for a taxable year if the resident is:

(a) an individual;

(b) that State, any political subdivision or local authority thereof or

any agency or instrumentality of such State;

(c) a company, if:

(i) the principal class of its shares is listed on a recognized

stock exchange specified in sub-paragraph (a) or (b) of

paragraph (6) of this Article and is regularly traded on one or

more recognized stock exchanges; or

(ii) at least 50 percent of the aggregate vote and value of the

shares in the company is owned directly or indirectly by five or

fewer companies entitled to benefits under clause (i) of this

sub-paragraph, provided that, in the case of indirect ownership,

each intermediate owner is a resident of either Contracting State;



(d) a person other than an individual or a company, if:

(i) the principal class of units in that person is listed or

admitted to dealings on a recognized stock exchange specified in

sub-paragraph (a) or (b) of paragraph (6) of this Article and is

regularly traded on one or more of the recognized stock

exchanges; or

(ii) the direct or indirect owners of at least 50 percent of the

beneficial interests in that person are qualified persons by reason

of clause (i) of sub-paragraph (c) or clause (i) of this

sub-paragraph;

(e) an entity organized under the laws of one of the Contracting

States and established and maintained in that State exclusively for a

religious, charitable, educational, scientific, or other similar purpose,

even if the entity is generally exempt from tax in that State;

(f) an entity organized under the laws of one of the Contracting

States and established and maintained in that State to provide, pursuant

to a plan, pensions or other similar benefits to employed and

self-employed persons, even if the entity is generally exempt from tax

in that State, provided that more than 50 percent of the entity’s

beneficiaries, members or participants are individuals resident in either

Contracting State;



(g) a person other than an individual, if:

(i) on at least half the days of the taxable year persons that are

qualified persons by reason of sub-paragraph (a), (b), (c)(i), or

(d)(i) of this paragraph own, directly or indirectly, at least 50

percent of the aggregate vote and value of the shares or other

beneficial interests in the person; and

(ii) less than 50 percent of the person’s gross income for the

taxable year is paid or accrued, directly or indirectly, to persons

who are not residents of either Contracting State in the form of

payments that are deductible for purposes of the taxes covered by

this Convention in the person’s State of residence (but not

including arm’s length payments in the ordinary course of

business for services or tangible property and payments in respect

of financial obligations to a bank, provided that where such a

bank is not a resident of one of the Contracting States such

payment is attributable to a permanent establishment of that bank

located in one of the Contracting States); or

(h) a recognized headquarters company for a multinational corporate

group. For purposes of this paragraph, a person shall be considered a

recognized headquarters company if:



(i) it provides in its State of residence a substantial

portion of the overall supervision and

administration of a group of companies (which

may be part of a larger group of companies),

which may include, but cannot be principally,

group financing;

(ii) the group of companies consists of corporations

resident in, and engaged in an active business

in, at least five countries (or groupings of

countries), and the business activities carried on

in each of the five countries (or groupings of

countries) generate at least 10 percent of the

gross income of the group;

(iii) the business activities carried on in any one

country other than the Contracting State of

residence of the headquarters company generate

less than 50 percent of the gross income of the

group;

(iv) no more than 25 percent of its gross income is

derived from the other Contracting State;



(v) it has, and exercises, independent discretionary

authority to carry out the functions referred to

in sub-paragraph (i);

(vi) it is subject to generally applicable rules of

taxation in its country of residence; and

(vii) the income derived in the other Contracting

State either is derived in connection with, or is

incidental to, the active business referred to in

sub-paragraph (ii).

If the income requirements for being considered a recognized

headquarters company (sub-paragraphs (ii), (iii), or (iv)) are not

fulfilled, they will be deemed to be fulfilled if the required percentages

are met when averaging the gross income of the preceding four years.

(3) (a) A resident of one of the Contracting States will be entitled to the

benefits of the Convention with respect to an item of income derived

from the other State, regardless of whether the resident is a qualified

person, if the resident is engaged in the active conduct of a trade or

business in the first-mentioned State (other than the business of making

or managing investments for the resident’s own account, unless these

activities are banking, insurance or securities activities carried on by a

bank, insurance company or a registered, licensed or authorized



securities dealer), and the income derived from the other Contracting

State is derived in connection with, or is incidental to, that trade or

business.

(b) If the resident or any of its associated enterprises carries on a

trade or business activity in the other Contracting State which gives rise

to an item of income, sub-paragraph (a) of this paragraph shall apply to

such item only if the trade or business activity in the first-mentioned

State is substantial in relation to the trade or business activity in the

other State. Whether a trade or business activity is substantial for

purposes of this paragraph will be determined based on all the facts and

circumstances.

(c) In determining whether a person is “engaged in the active

conduct of a trade or business” in a Contracting State under

sub-paragraph (a) of this paragraph, activities conducted by a

partnership in which that person is a partner and activities conducted by

persons connected to such person shall be deemed to be conducted by

such person. A person shall be connected to another if one possesses at

least 50 percent of the beneficial interest in the other (or, in the case of a

company, at least 50 percent of the aggregate vote and value of the

company’s shares or of the beneficial equity interest in the company) or

another person possesses, directly or indirectly, at least 50 percent of



the beneficial interest (or, in the case of a company, at least 50 percent

of the aggregate vote and value of the company’s shares or of the

beneficial equity interest in the company) in each person. In any case, a

person shall be considered to be connected to another if, based on all

the relevant facts and circumstances, one has control of the other or

both are under the control of the same person or persons.

(4) Notwithstanding the preceding provisions of this Article, if a company

that is a resident of one of the Contracting States, or a company that owns at

least 50 percent of the aggregate vote or value of such a company, has

outstanding a class of shares:

(a) which is subject to terms or other arrangements which entitle its

holders to a portion of the income of the company derived from the

other Contracting State that is larger than the portion such holders

would receive absent such terms or arrangements (“the disproportionate

part of the income”); and

(b) 50 percent or more of the voting power and value of which is

owned by persons who are not qualified persons,

the benefits of this Convention shall not apply to the disproportionate part of the

income.

(5) A resident of one of the Contracting States that is not a qualified person

pursuant to the provisions of paragraph (2) of this Article shall, nevertheless, be



granted benefits of the Convention if the competent authority of the other

Contracting State determines, in accordance with the law of that other State,

that the establishment, acquisition or maintenance of such person and the

conduct of its operations did not have as one of its principal purposes the

obtaining of benefits under the Convention.

(6) For purposes of this Article the term “recognized stock exchange”

means:

(a) the NASDAQ System owned by the National Association of

Securities Dealers, Inc., and any stock exchange registered with the

U.S. Securities and Exchange Commission as a national securities

exchange under the U.S. Securities Exchange Act of 1934;

(b) the Australian Stock Exchange and any other Australian stock

exchange recognized as such under Australian law; and

(c) any other stock exchange agreed upon by the competent

authorities.

(7) Nothing in this Article shall be construed as restricting, in any manner,

the right of a Contracting State to apply any anti-avoidance provisions of its

taxation law.”.



ARTICLE 11


“ARTICLE 21

Other Income

(1) Items of income of a resident of one of the Contracting States, wherever

arising, not dealt with in the foregoing Articles of this Convention shall be


(2) The provisions of paragraph (1) shall not apply to income, other than

income from real property as defined in paragraph (2) of Article 6 (Income from

Real Property), derived by a resident of one of the Contracting States where that

income is effectively connected with a permanent establishment or fixed base

situated in the other Contracting State. In that case the provisions of Article 7

(Business Profits) or Article 14 (Independent Personal Services), as the case


(3) Notwithstanding the provisions of paragraphs (1) and (2), items of

income of a resident of one of the Contracting States not dealt with in the

foregoing Articles of this Convention from sources in the other Contracting

State may also be taxed in the other Contracting State.”.



ARTICLE 12

Article 22 of the Convention is amended by omitting in paragraph (1)

“sub-paragraph (1)(b)” and substituting “sub-paragraph (1)(b)(i)” in each place

it occurs.

ARTICLE 13

(1) This Protocol shall be subject to ratification in accordance with the

applicable procedures of each Contracting State, and instruments of ratification

shall be exchanged as soon as possible.

(2) This Protocol, which shall form an integral part of the Convention, shall

enter into force upon the exchange of instruments of ratification and its

provisions shall have effect:

(a) in Australia:

(i) in respect of withholding tax on dividends, royalties and

interest that is derived by a non-resident, in relation to

income derived on or after the later of:

(A) the first day of the second month next following

the date on which the Protocol enters into force;

or

(B) 1 July, 2003;



(ii) in respect of other Australian tax, in relation to income,

profits or gains of any year of income beginning on or

after 1 July in the calendar year next following that in

which the Protocol enters into force; and

(b) in the United States:

(i) in respect of withholding tax on dividends, royalties and

interest that is derived by a non-resident, in relation to

income derived on or after the later of:

(A) the first day of the second month next following

the date on which the Protocol enters into force;

or

(B) 1 July, 2003;

(ii) in respect of other taxes, for taxable periods beginning on

or after 1 January in the calendar year next following

that in which the Protocol enters into force.

(3) Notwithstanding paragraph (2), Article 6 of this Protocol shall not apply

to dividends paid by a REIT if the person beneficially entitled to the dividends

is an LAPT (as defined in paragraph (4) of Article 10 (Dividends) of the

Convention as amended by this Protocol) and the shares in respect of which the

dividends are paid were:

(a) owned by the LAPT on March 26, 2001;



(b) acquired by the LAPT pursuant to a binding contract entered into

on or before March 26, 2001; or

(c) acquired by the LAPT pursuant to a reinvestment of dividends

(ordinary or capital) with respect to such shares.

In such case, the provisions of Article 10 (Dividends), as it was on March 26,

2001, shall apply.

IN WITNESS WHEREOF the undersigned, being duly authorized, have signed

this Protocol.

DONE in duplicate at Canberra, this twenty-seventh day of September 2001.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT

AUSTRALIA: OF THE UNITED STATES

OF AMERICA:

PETER COSTELLO J THOMAS SCHIEFFER


Schedule 3 Convention between Australia and Canada for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income


Schedule 3—Convention between Australia

and Canada for the Avoidance of

Double Taxation and the Prevention of

Fiscal Evasion with respect to Taxes

on Income Section 3

The Government of Australia and the Government of Canada

Desiring to conclude a Convention for the avoidance of double taxation and



CHAPTER I

SCOPE OF THE CONVENTION

ARTICLE 1

Personal Scope

This Convention shall apply to persons who are residents of one or both of

the Contracting States.

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are—

(a) in Australia:

the Australian income tax, including the additional tax upon the

undistributed amount of the distributable income of a private company;

(b) in Canada:

the income taxes imposed by the Government of Canada.

(2) This Convention shall also apply to any identical or substantially

similar taxes which are imposed by either Contracting State after the date of

signature of this Convention in addition to, or in place of, the existing taxes. At

the end of each calendar year, each Contracting State shall notify the other

Convention between Australia and Canada for the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with respect to Taxes on Income Schedule 3


Contracting State of any substantial changes which have been made in its laws

relating to the taxes to which this Convention applies.

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

(1) In this Convention, unless the context otherwise requires—

(a) the term “Australia” means the Commonwealth of Australia and, when








said Territories which is an area where Australia may, in

accordance with its national legislation and international law,

exercise rights in respect of the seabed and sub--soil and their

natural resources.

(b) the term “Canada” used in a geographical sense, means the territory of

Canada, including any area beyond the territorial waters of Canada

which is an area where Canada may, in accordance with its national

legislation and international law, exercise rights with respect to the

seabed and sub--soil and their natural resources;

(c) the terms “Contracting State, one of the Contracting States” and “other

Contracting State” mean Australia or Canada, as the context requires;

(d) the term “person” includes an individual, an estate, a trust, a company

and any other body of persons;

(e) the term “company” means any body corporate or any entity which is

assimilated to a body corporate for tax purposes, in French, the term

“société” also means a “corporation” within the meaning of Canadian

Law;

(f) the terms “enterprise of one of the Contracting States” and “enterprise

of the other Contracting State” mean respectively an enterprise carried

on by a resident of one of the Contracting States and an enterprise

carried on by a resident of the other Contracting State;




(g) the term “tax” means Australian tax or Canadian tax, as the context

requires;

(h) the term “Australian tax” means tax imposed by Australia, being tax to

which this Convention applies by virtue of Article 2;

(i) the term “Canadian tax” means tax imposed by Canada, being tax to


(j) the term “competent authority” means, in the case of Australia, the

Commissioner of Taxation or his authorized representative, and in the

case of Canada, the Minister of National Revenue or his authorized

representative;

(k) words in the singular include the plural and words in the plural include

the singular.

(2) In this Convention, the terms “Australian tax” and “Canadian tax” do

not include any penalty or interest imposed under the law of either Contracting

State relating to the taxes to which this Convention applies by virtue of Article

2.

(3) In the application of this Convention by a Contracting State, any term

not otherwise defined shall, unless the context otherwise requires, have the

meaning which it has under the laws of that Contracting State relating to the

taxes to which this Convention applies.

ARTICLE 4

Residence

(1) Subject to paragraph (2), for the purposes of this Convention, a person

is a resident of one of the Contracting States if that person is a resident of that

State for the purposes of its tax.

(2) In relation to income from sources in Canada, a person who is subject to

Australian tax on income which is from sources in Australia shall not be treated

as a resident of Australia unless the income from sources in Canada is subject to

Australian tax or, if that income is exempt from Australian tax, it is so exempt

solely because it is subject to Canadian tax.

(3) Where by reason of the provisions of paragraph (1) an individual is a

resident of both Contracting States, then his status shall be determined in

accordance with the following rules:

(a) he shall be deemed to be a resident solely of the Contracting State in

which he has a permanent home available to him;




(b) if he has a permanent home available to him in both Contracting States,

or if he does not have a permanent home available to him in either of

them, he shall be deemed to be a resident solely of the Contracting State

with which his personal and economic relations are the closer.

(4) Where by reason of the provisions of paragraph (1) a person other than

an individual is a resident of both Contracting States, then the person’s status

shall be determined as follows:

(a) it shall be deemed to be a resident of the Contracting State in which it is

incorporated or otherwise constituted;

(b) if it is not incorporated or otherwise constituted in either of the

Contracting States, it shall be deemed to be a resident of the Contracting

State in which its place of effective management is situated.

ARTICLE 5


(1) For the purposes of this Convention, the term “permanent

establishment” means a fixed place of business through which the business of

an enterprise is wholly or partly carried on.

(2) The term “permanent establishment” includes especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;


(h) a building site or construction, installation or assembly project which

exists for more than twelve months.

(3) An enterprise shall not be deemed to have a permanent establishment

merely by reason of—

(a) the use of facilities solely for the purpose of storage, display or delivery

of goods or merchandise belonging to the enterprise;


enterprise solely for the purpose of storage, display or delivery;


enterprise solely for the purpose of processing by another enterprise;




(d) the maintenance of a fixed place of business solely for the purpose of


enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of

activities which have a preparatory or auxiliary character for the

enterprise, such as advertising or scientific research.

(4) An enterprise shall be deemed to have a permanent establishment in one

of the Contracting States and to carry on business through that permanent

establishment if—

(a) it carries on supervisory activities in that State for more than twelve

months in connection with a building site, or a construction, installation

or assembly project which is being undertaken in that State; or

(b) substantial equipment is being used in that State for more than twelve

months by, for or under contract with the enterprise in exploration for,

or the exploitation of, natural resources or in activities connected with

such exploration or exploitation.

(5) A person acting in one of the Contracting States on behalf of an

enterprise of the other Contracting State—other than an agent of an independent

status to whom paragraph (6) applies—shall be deemed to be a permanent

establishment of that enterprise in the first--mentioned State if—

(a) he has, and habitually exercises in that State, an authority to conclude

contracts on behalf of the enterprise, unless his activities are limited to

the purchase of goods or merchandise for the enterprise; or

(b) in so acting, he manufactures or processes in that State for the enterprise

goods or merchandise belonging to the enterprise.

(6) An enterprise of one of the Contracting States shall not be deemed to

have a permanent establishment in the other Contracting State merely because it

carries on business in that other State through a broker, general commission

agent or any other agent of an independent status, where that person is acting in

the ordinary course of his business as such a broker or agent.




through a permanent establishment or otherwise) shall not of itself make either


(8) The principles set forth in paragraphs (1) to (7) inclusive shall be

applied in determining for the purposes of this Convention whether there is a




permanent establishment outside both Contracting States and whether an

enterprise, not being an enterprise of one of the Contracting States, has a

permanent establishment in one of the Contracting States.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6


(1) Income from real property, including royalties and other payments in

respect of the operation of mines or quarries or of the exploitation of any natural

resource, may be taxed in the Contracting State in which the real property,

mines, quarries, or natural resources are situated.

(2) Income from real property or from any direct interest in or over land

shall be regarded as income from real property situated where the real property

or land is situated.

(3) Ships, boats or aircraft shall not be regarded as real property.

(4) The provisions of paragraphs (1) and (2) shall also apply to the income

from real property of an enterprise and to income from real property used for

the performance of professional services.

ARTICLE 7

Business Profits

(1) The profits of an enterprise of one of the Contracting States shall be

taxable only in that State unless the enterprise carries on business in the other


enterprise carries on or has carried on business as aforesaid, the profits of the

enterprise may be taxed in the other State, but only so much of them as is





be attributed to that permanent establishment the profits which it might be

expected to make if it were a distinct and separate enterprise engaged in the

same or similar activities under the same or similar conditions and dealing






(3) In the determination of the profits of a permanent establishment, there

shall be allowed as deductions expenses of the enterprise, being expenses which

are incurred for the purposes of the permanent establishment (including

executive and general administrative expenses so incurred) and which would be

deductible if the permanent establishment were an independent entity which

paid those expenses, whether incurred in the Contracting State in which the

permanent establishment is situated or elsewhere.

(4) No profits shall be attributed to a permanent establishment by reason of


the enterprise.

(5) If the information available to the competent authority of a Contracting

State is inadequate to determine the profits to be attributed to the permanent

establishment of an enterprise, nothing in this Article shall affect the application

of any law of that State relating to the determination of the tax liability of a

person provided that that law shall be applied, so far as the information

available to the competent authority permits, in accordance with the principles

of this Article.

(6) For the purposes of this Article, except as provided in the Articles

referred to in this paragraph, the profits of an enterprise do not include items of

income dealt with in Articles 6, 8, 10, 11, 12, 13, 14, 16 and 17 and

paragraphs (3) and (4) of Article 21.

(7) Nothing in this Article shall affect the operation of any law of a

Contracting State relating specifically to taxation of any person who carries on a

business of any form of insurance, provided that if the law in force in either

Contracting State at the date of signature of this Convention is varied (otherwise

than in minor respects so as not to affect its general character) the Contracting

States shall consult with each other with a view to agreeing to any amendment

of this paragraph that may be appropriate.

ARTICLE 8


(1) Profits from the operation of ships or aircraft derived by a resident of

one of the Contracting States shall be taxable only in that State.

(2) Notwithstanding the provisions of paragraph (1), such profits may be

taxed in the other Contracting State where they are profits from operations of

ships or aircraft confined solely to places in that other State.




(3) The provisions of paragraphs (1) and (2) shall apply in relation to the

share of the profits from the operation of ships or aircraft derived by a resident

of one of the Contracting States through participation in a pool service, in a

joint transport operating organisation or in an international operating agency.

(4) For the purposes of this Article, profits derived from the carriage by

ships or aircraft of passengers, livestock, mail, goods or merchandise taken on

board in a Contracting State for discharge at another place in that State shall be

treated as profits from operations confined solely to places in that State.

ARTICLE 9


(1) Where—















State is inadequate to determine the profits to be attributed to an enterprise,

nothing in this Article shall affect the application of any law of that State

relating to the determination of the tax liability of a person, provided that that

law shall be applied, so far as the information available to the competent

authority permits, in accordance with the principles of this Article.

(3) Where profits on which an enterprise of one of the Contracting States

has been charged to tax in that State are also included, by virtue of

paragraph (1) or (2), in the profits of an enterprise of the other Contracting State

and taxed accordingly, and the profits so included are profits which might have

been expected to have accrued to that enterprise of the other State if the

conditions operative between the enterprises had been those which might have




been expected to have operated between independent enterprises dealing wholly

independently with one another, then the first--mentioned State shall, subject to

paragraph (4), make an appropriate adjustment to the amount of tax charged on

those profits in the first--mentioned State. In determining such an adjustment,

due regard shall be had to the other provisions of this Convention in relation to

the nature of the income, and for this purpose the competent authorities of the

Contracting States shall if necessary consult each other.

(4) The provisions of paragraph (3) relating to an appropriate adjustment

are not applicable after the expiration of six years from the end of the year of

income or taxation year in respect of which a Contracting State has charged to

tax the profits to which the adjustment would relate.

ARTICLE 10

Dividends




that other State.



according to the law of that State, but the tax so charged shall not exceed 15 per

cent of the gross amount of the dividends.


Contracting States, being dividends to which a person who is not a resident of

the other Contracting State is beneficially entitled, shall be exempt from tax in

that other State except 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. Provided that this paragraph shall not apply in

relation to dividends paid by any company which is a resident of Australia for

the purposes of Australian tax and which is also a resident of Canada for the

purposes of Canadian tax.

(4) The term “dividends” in this Article means income from shares and

other income assimilated to income from shares by the taxation law of the

Contracting State of which the company making the distribution is a resident.

(5) The provisions of paragraphs (1) and (2) shall not apply if the person


States, carries on business through a permanent establishment situated in the

other Contracting State, or performs professional services from a fixed base




situated in that other State, being the State of which the company paying the

dividends is a resident and the holding in respect of which the dividends are

paid is effectively connected with that permanent establishment or fixed base.

In such a case, the provisions of Article 7 or 14, as the case may be, shall apply.

(6) Canada may impose tax, on the earnings attributable to a permanent

establishment in Canada of a company which is a resident of Australia, in

addition to the tax which would be chargeable on the earnings of a company

which is a resident of Canada; provided that any additional tax so imposed shall

not exceed 15 per cent of the amount of such earnings which have not been

subjected to such additional tax in previous taxation years. For the purpose of

this provision, the term “earnings” means the profits attributable to a permanent

establishment in Canada in a year and previous years, after deducting therefrom

all taxes, other than the additional tax referred to herein, imposed on such

profits in Canada.

(7) Australia may impose an income tax (in this paragraph called a “branch

profits tax”) on the reduced taxable income of a company that is a resident of

Canada in addition to the income tax (in this paragraph called “the general

income tax”) payable by the company in respect of its taxable income; provided

that any branch profits tax so imposed in respect of a year of income shall not

exceed 15 per cent of the amount by which the reduced taxable income of that

year of income exceeds the general income tax payable in respect of the reduced

taxable income of that year of income.

ARTICLE 11

Interest



that other State.

(2) Such interest may be taxed in the Contracting State in which it arises,

and according to the law of that State, but the tax so charged shall not exceed 15

per cent of the gross amount of the interest.

(3) The term “interest” in this Article includes interest from Government

securities or from bonds or debentures, whether or not secured by mortgage and

whether or not carrying a right to participate in profits, and interest from any

other form of indebtedness as well as all other income assimilated to interest by

the taxation law of the Contracting State in which the income arises.


beneficially entitled to the interest, being a resident of one of the Contracting






situated in that other State, being the State in which the interest arises, and the

indebtedness giving rise to the interest is effectively connected with that


7 or 14, as the case may be, shall apply.


is that Contracting State itself or a political sub--division or a local authority

thereof or a person who is a resident of that State for the purposes of its tax.


of the Contracting States or not, has in a State other than that of which he is a

resident a permanent establishment or a fixed base in connection with which the

indebtedness on which the interest is paid was incurred, and that interest is

borne by that permanent establishment or fixed base, then such interest shall be

deemed to arise in the Contracting State in which the permanent establishment

or fixed base is situated.

(6) Where, owing to a special relationship between the payer and the

person beneficially entitled to the interest or between both of them and some

other person the amount of the interest paid, having regard to the indebtedness

for which it is paid, exceeds the amount which might have been expected to






ARTICLE 12

Royalties

(1) Royalties arising in one of the Contracting States, being royalties to



(2) Such royalties may be taxed in the Contracting State in which they

arise, and according to the law of that State, but the tax so charged shall not

exceed 10 per cent of the gross amount of the royalties.

(3) The term “royalties” in this Article means payments (including credits),

whether periodical or not, and however described or computed, to the extent to

which they are paid as consideration for the use of, or the right to use, any

copyright, patent, design or model, plan, secret formula or process, trademark,




or other like property or right, or industrial, commercial or scientific equipment,

or for the supply of scientific, technical, industrial or commercial knowledge or

information, or for the supply of any assistance of an ancillary and subsidiary

nature furnished as a means of enabling the application or enjoyment of such

knowledge or information or any other property or right to which this Article

applies and includes any payments to the extent to which they are paid as

consideration for the use of, or the right to use, motion picture films, films or

video tapes for use in connection with television or tapes for use in connection

with radio broadcasting, or for total or partial forbearance in respect of the use

of a property or right referred to in this paragraph.


beneficially entitled to the royalties, being a resident of one of the Contracting



situated in that other State, being the State in which the royalties arise and the

asset giving rise to the royalties is effectively connected with that permanent

establishment or fixed base. In such a case, the provisions of Article 7 or 14, as

the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer

is that Contracting State itself or a political sub--division or a local authority

thereof or a person who is a resident of that State for the purposes of its tax.

Where, however, the person paying the royalties, whether he is a resident of one

of the Contracting States or not, has in a State other than that of which he is a

resident a permanent establishment or a fixed base in connection with which the

obligation to pay the royalties was incurred, and those royalties are borne by

that permanent establishment or fixed base, then such royalties shall be deemed

to arise in the Contracting State in which the permanent establishment or fixed

base is situated.


person beneficially entitled to the royalties or between both of them and some

other person the amount of the royalties paid, having regard to what they are

paid for, exceeds the amount which might have been expected to have been

agreed upon by the payer and the person so entitled in the absence of such



royalties paid shall remain taxable according to the law of each Contracting





ARTICLE 13


Income or gains from the alienation of real property or of a direct interest in

or over land or of a right to exploit, or to explore for, a natural resource may be

taxed in the Contracting State in which the real property, the land or the natural

resource is situated.

ARTICLE 14


(1) Income derived by an individual who is a resident of one of the

Contracting States in respect of professional services or other independent

activities of a similar character shall be taxable only in that State unless he has a

fixed base regularly available to him in the other Contracting State for the

purpose of performing his activities. If he has such a fixed base, the income

may be taxed in the other State but only so much of it as is attributable to

activities exercised from that fixed base.

(2) The term “professional services” includes services performed in the

exercise of independent scientific, literary, artistic, educational or teaching

activities as well as in the exercise of the independent activities of physicians,

lawyers, engineers, architects, dentists and accountants.

ARTICLE 15


(1) Subject to the provisions of Articles 16, 18 and 19, salaries, wages and

other similar remuneration derived by an individual who is a resident of one of

the Contracting States in respect of an employment shall be taxable only in that




(2) Notwithstanding the provisions of paragraph (1), remuneration derived

by an individual who is a resident of one of the Contracting States in respect of

an employment exercised in the other Contracting State shall be taxable only in

the first--mentioned State if the recipient is present in the other State for a

period or periods not exceeding in the aggregate 183 days in the year of income

or the taxation year as the case may be, of that other State and either—




(a) the remuneration does not exceed in the said year the greater of the

following amounts:

(i) three thousand Canadian dollars

and

(ii) two thousand six hundred Australian dollars; or

(b) the remuneration is paid by, or on behalf of, an employer who is not a

resident of that other State and the remuneration is not deductible in

determining taxable profits of a permanent establishment or a fixed base

which the employer has in that other State.

(3) The Treasurer of Australia and the Minister of National Revenue of

Canada may agree, in letters exchanged for the purpose, to variations in the

amounts specified in sub--paragraph (a) of paragraph (2) and the variations so

agreed shall have effect according to the tenor of the letters.

(4) Notwithstanding the preceding provisions of this Article, remuneration

in respect of an employment exercised aboard a ship or aircraft operated in


in that State.

ARTICLE 16

Directors’ Fees

Directors’ fees and similar payments derived by a resident of one of the

Contracting States in his capacity as a member of the board of directors of a

company which is a resident of the other Contracting State may be taxed in that

other State.

ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 and 15, income derived

by entertainers (such as theatrical, motion picture, radio or television artistes

and musicians and athletes) from their personal activities as such may be taxed

in the Contracting State in which these activities are exercised.

(2) Where income in respect of the personal activities of an entertainer as

such accrues not to the entertainer but to another person, that income may,

notwithstanding the provisions of Articles 14 and 15, be taxed in the

Contracting State in which the activities of the entertainer are exercised.




(3) The provisions of paragraph (2) shall not apply if it is established that

neither the entertainer nor persons related to the entertainer, participate directly

or indirectly in the profits of the other person referred to in that paragraph.

ARTICLE 18

Pensions and Annuities

(1) Pensions and annuities arising in a Contracting State for the benefit of

and paid to a resident of the other Contracting State may be taxed in that other

State.

(2) Pensions and annuities arising in a Contracting State in a year of

income or taxation year may be taxed in that State and according to the law of

that State, but the tax so charged shall not exceed the lesser of:

(a) 15 per cent of the pension or annuity received in the year; and

(b) the tax that would be payable in respect of the pension or annuity

received in the year if the recipient were a resident of the Contracting

State in which the pension or annuity arises.

However, the limitation on the tax that may be charged in the Contracting

State in which pensions and annuities arise does not apply to payments of any

kind under an income--averaging annuity contract.

(3) Any alimony or other maintenance payment arising in a Contracting

State and paid to a resident of the other Contracting State, shall be taxable only

in the first--mentioned State.

ARTICLE 19

Government Service

(1) Remuneration (other than a pension or annuity) paid by a Contracting

State or a political sub--division or a local authority thereof to any individual in

respect of services rendered in the discharge of governmental functions shall be

taxable only in that State. However, such remuneration shall be taxable only in

the other Contracting State if the services are rendered in that State and the

recipient is a resident of that State who:

(a) is a citizen of that State; or


performing the services.

(2) The provisions of paragraph (1) shall not apply to remuneration in

respect of services rendered in connection with any trade or business carried on




by one of the Contracting States or a political sub--division or a local authority

thereof. In such a case the provisions of Articles 15 and 16 shall apply.

ARTICLE 20

Students



State and who is temporarily present in the other State solely for the purpose of

his education, receives payments from sources outside the other State for the

purpose of his maintenance or education, those payments shall be exempt from

tax in the other State.

ARTICLE 21


(1) Subject to the provisions of paragraph (2), items of income of a resident

of one of the Contracting States which are not expressly mentioned in the

foregoing Articles of this Convention shall be taxable only in that Contracting

State.

(2) However, if such income is derived by a resident of one of the

Contracting States from sources in the other Contracting State, such income

may also be taxed in the Contracting State in which it arises and, subject to

paragraph (3), according to the law of that State.

(3) Where the income is income derived from an estate or trust resident in

Canada by a resident of Australia the Canadian tax on that income shall not

exceed 15 per cent of the gross amount of the income if it is subject to tax in

Australia.

(4) The provisions of paragraph (3) shall not apply if the recipient of the

income, being a resident of Australia, carries on in Canada a business through a

permanent establishment situated therein, or performs in Canada professional

services from a fixed base situted therein, and the right or interest in the estate

or trust in respect of which the income is paid is effectively connected with such

permanent establishment or fixed base. In such a case the provisions of Article

7 or 14, as the case may be, shall apply.




ARTICLE 22

Source of Income

(1) Income derived by a resident of one of the Contracting States which,

under any one or more of Articles 6 to 8 and 10 to 18 may be taxed in the other

Contracting State, shall for the purposes of Article 23, be deemed to be income

from sources in that other State.

(2) Income derived by a resident of Canada which, under any one or more

of Articles 6 to 8 and 10 to 18, may be taxed in Australia may be deemed, for

the purposes of the Australian income tax law, to be income from sources in

Australia.

CHAPTER IV

METHODS OF PREVENTION OF DOUBLE TAXATION

ARTICLE 23


(1) Subject to the provisions of the law of Australia from time to time in


in a country outside Australia (which shall not affect the general principle

hereof), tax paid in Canada, whether directly or by deduction, in respect of

income derived by a person who is a resident of Australia from sources in

Canada (not including, in the case of a dividend, tax paid in respect of the

profits out of which the dividend is paid) shall be allowed as a credit against

Australian tax payable in respect of that income.

(2) In the case of Canada, double taxation shall be avoided as follows:

(a) Subject to the existing provisions of the law of Canada regarding the

deduction from tax payable in Canada of tax paid in a territory outside

Canada and to any subsequent modification of those provisions (which,

however, shall not affect the general principle hereof) and unless a

greater deduction or relief is provided under the law of Canada, tax paid

in Australia in accordance with this Convention on profits, income or

gains arising in Australia shall be deducted from any Canadian tax

payable in respect of such profits, income or gains.

(b) Subject to the existing provisions of the law of Canada regarding the

determination of the exempt surplus of a foreign affiliate and to any

subsequent modification of those provisions (which, however, shall not

affect the general principle hereof) for the purpose of computing

Canadian tax, a company which is a resident of Canada shall be allowed




to deduct in computing its taxable income any dividend received by it

out of the exempt surplus of a foreign affiliate which is a resident of

Australia.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 24


(1) Where a resident of a Contracting State considers that the actions of the

competent authority of one or both of the Contracting States result or will result

for him in taxation not in accordance with this Convention, he may, without

prejudice to the remedies provided by the national laws of those States, present

his case in writing to the competent authority of the Contracting State of which

he is a resident.

(2) The competent authority shall endeavour, if the taxpayer’s claim

appears to it to be justified and if it is not itself able to arrive at an appropriate

solution, to resolve the case with the competent authority of the other

Contracting State, with a view to the avoidance of taxation not in accordance

with this Convention.

(3) The competent authorities of the Contracting States shall jointly

endeavour to resolve any difficulties or doubts arising as to the application of

this Convention.

(4) The competent authorities of the Contracting States may consult

together with respect to the elimination of double taxation in cases not provided

for in the Convention.

(5) The competent authorities of the Contracting States may communicate

with each other directly for the purpose of giving effect to the provisions of this

Convention.

ARTICLE 25


(1) The competent authorities of the Contracting States shall exchange such

information as is necessary for the carrying out of this Convention or of the

domestic laws of the Contracting States concerning the taxes to which this

Convention applies insofar as the taxation thereunder is not contrary to this

Convention. The exchange of information is not restricted by Article 1. Any




information received by the competent authority of a Contracting State shall be

treated as secret in the same manner as information obtained under the domestic

laws of that State and shall be disclosed only to persons or authorities (including

courts and administrative bodies) concerned with the assessment, collection or

enforcement of the taxes to which this Convention applies, or with the

determination of appeals in relation thereto, and shall be used only for such

purposes.

(2) In no case shall the provisions of paragraph (1) be construed so as to

impose on a Contracting State the obligation—

(a) to carry out administrative measures at variance with the laws or the

administrative practice of that or of the other Contracting State;

(b) to supply particulars which are not obtainable under the laws or in the

normal course of the administration of that or of the other Contracting

State;



supply information the disclosure of which would be contrary to public

policy.

ARTICLE 26

Diplomatic and Consular Officials

(1) Nothing in this Convention shall affect the fiscal privileges of

diplomatic or consular officials under the general rules of international law or

under the provisions of special agreements.

(2) This Convention shall not apply to International Organizations, to

organs or officials thereof and to persons who are members of a diplomatic,

consular or permanent mission of a third State, being present in a Contracting

State and who are not liable in either Contracting State to the same obligations

in relation to tax on their total world income as are residents thereof.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 27

Entry Into Force

(1) This Convention shall come into force on the date on which the

Government of Australia and the Government of Canada exchange notes

through the diplomatic channel notifying each other that the last of such things




has been done as is necessary to give this Convention the force of law in

Australia and in Canada, as the case may be, and thereupon this Convention

shall have effect—

(a) in Australia—


non--resident, in respect of income derived on or after 1 July

1975

(ii) in respect of other Australian tax, for any year of income

beginning on or after 1 July 1975

(b) in Canada—

(i) in respect of tax withheld at the source on amounts paid or

credited to non--residents on or after 1 January 1976

(ii) in respect of other Canadian tax, for taxation years beginning on

or after 1 January 1976.

(2) Subject to paragraph (3) of this Article, the Agreement between the

Government of the Commonwealth of Australia and the Government of Canada

for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income signed at Mont Tremblant on 1 October 1957 (in this

Article referred to as “the 1957 Agreement”) shall cease to have effect in

relation to any tax in respect of which this Convention comes into effect in

accordance with paragraph (1) of this Article.

(3) Where any provision of the 1957 Agreement would have afforded any

greater relief from tax in one of the Contracting States than is afforded by this

Convention, any such provision shall continue to have effect in that Contracting

State—

(a) in the case of Australia in respect of withholding tax on income that is

derived by a non--resident, in respect of income derived during any

financial year beginning before the date of signature of this Convention

and, in respect of other Australian tax, for any year of income beginning

before that date;

(b) in the case of Canada in respect of tax withheld at the source on

amounts paid or credited to non--residents before 31 December in the

calendar year during which this Convention was signed and, in respect

of other Canadian tax for any taxation year beginning on or before that

date.

(4) The 1957 Agreement shall terminate on the last date on which it has

effect in accordance with the foregoing provisions of this Article.




ARTICLE 28

Termination

This Convention shall continue in effect indefinitely, but the Government of

Australia or the Government of Canada may, on or before 30 June in any

calendar year after the year 1983, give to the other Government through the

diplomatic channel written notice of termination and, in that event, this

Convention shall cease to be effective—

(a) in Australia—


non--resident, in respect of income derived on or after 1 July in




beginning on or after 1 July in the calendar year next following

that in which the notice of termination is given;

(b) in Canada—

(i) in respect of tax withheld at the source on amounts paid or

credited to non--residents on or after 1 January in the second

calendar year next following that in which the notice of


(ii) in respect of other Canadian tax, for any taxation year

beginning on or after 1 January in the second calendar year next

following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have

signed this Convention.

DONE in Canberra on the twenty--first day of May 1980 in the English and

French languages, the two versions being equally authentic.

JOHN HOWARD EDWARD LUMLEY

For the Government of Australia For the Government of Canada

Canadian protocol Schedule 3A


Schedule 3A—Canadian protocol Note: See section 3.

PROTOCOL AMENDING THE CONVENTION BETWEEN

AUSTRALIA AND CANADA FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME

The Government of Australia and the Government of Canada,

Desiring to amend the Convention between Australia and Canada for the

avoidance of double taxation and the prevention of fiscal evasion with respect

to taxes on income signed at Canberra on 21 May 1980 (in this Protocol

referred to as the “Convention”),


ARTICLE 1

Article 2 of the Convention shall be deleted and replaced by the

following:

“ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are:


the income tax, and the resource rent tax in respect of

offshore projects relating to exploration for or

exploitation of petroleum resources, imposed under

the federal law of Australia;

(b) in the case of Canada:

the income taxes imposed by the Government of

Canada under the Income Tax Act.

Schedule 3A Canadian protocol


(2) This Convention shall apply also to any identical or

substantially similar taxes which are imposed under the federal law of

Australia or the law of Canada after the date of signature of this

Convention in addition to, or in place of, the existing taxes. The

competent authorities of the Contracting States shall notify each other of

any substantial changes which have been made in the law of their

respective States relating to the taxes to which this Convention applies

within a reasonable period of time after those changes.”.

ARTICLE 2

1. Subparagraphs (a) and (k) of paragraph (1) of Article 3 of the Convention

shall be deleted and respectively replaced by the following:

“(a) the term “Australia”, when used in a geographical sense,

excludes all external territories other than:





(v) the Territory of Heard Island and McDonald Islands;

and


and includes any area adjacent to the territorial limits of

Australia (including the Territories specified in this

subparagraph) in respect of which there is for the time being

in force, consistently with international law, a law of

Australia dealing with the exploration for or the exploitation

of any of the natural resources of the seabed and subsoil of

the continental shelf;”; and



“(k) the term “international traffic” means any voyage of a ship

or aircraft operated by an enterprise of a Contracting State to

transport passengers or property except where the principal

purpose of the voyage is to transport passengers or property

between places within the other Contracting State.”.

2. Paragraph (3) of Article 3 of the Convention shall be deleted and replaced

by the following:

“(3) As regards the application of this Convention at any time by

a Contracting State, any term not defined therein shall, unless the context

otherwise requires, have the meaning that it has at that time under the law

of that State concerning the taxes to which the Convention applies, any

meaning under the applicable tax law of that State prevailing over a

meaning given to the term under other law of that State.”.

ARTICLE 3

Paragraphs (1) and (2) of Article 4 of the Convention shall be deleted and

replaced by the following:

“(1) Subject to paragraph (2), for the purposes of this

Convention, a person is a resident of a Contracting State if that person is

a resident of that State for the purposes of its tax. A Contracting State or

any political subdivision or local authority thereof or any agency or

instrumentality of any such State, subdivision or authority is also a

resident of that State for the purposes of this Convention.

(2) A person is not a resident of a Contracting State for the

purposes of this Convention if the person is liable to tax in that State in

respect only of income from sources in that State.”.

ARTICLE 4

Subparagraph (b) of paragraph (4) of Article 5 of the Convention shall be

deleted and replaced by the following:

“(b) substantial equipment is being used in that State by, for or

under contract with the enterprise other than in connection

with a building site or construction, installation or assembly

project of the enterprise.”.



ARTICLE 5


following:

“ARTICLE 6


(1) Income from real property may be taxed in the Contracting

State in which the real property is situated.

(2) For the purposes of this Convention, the term “real property”

in relation to a Contracting State, shall have the meaning which it has

under the law of that State and shall include:

(a) a lease of land and any other interest in or over land, whether

improved or not, including a right to explore for mineral, oil

or gas deposits or other natural resources, and a right to mine

those deposits or resources; and

(b) a right to receive variable or fixed payments either as

consideration for or in respect of the exploitation of, or the

right to explore for or exploit, mineral, oil or gas deposits,

quarries or other places of extraction or exploitation of

natural resources.

(3) Any interest or right referred to in paragraph (2) shall be

regarded as situated where the land, mineral, oil or gas deposits, quarries

or natural resources, as the case may be, are situated or where the

exploration may take place.

(4) The provisions of paragraphs (1) and (3) shall also apply to

the income from real property of an enterprise and to income from real

property used for the performance of independent personal services.”.

ARTICLE 6

1. Paragraph (6) of Article 7 of the Convention shall be deleted and replaced

by the following:



“(6) Where profits include items which are dealt with separately

in other Articles of this Convention, then the provisions of those Articles

shall not be affected by the provisions of this Article.”.

2. A new paragraph (8) shall be added to Article 7 of the Convention as

follows:

“(8) Where:

(a) a resident of Canada is beneficially entitled, whether directly

or through one or more interposed trusts, to a share of the

business profits of an enterprise carried on in Australia by

the trustee of a trust other than a trust which is treated as a

company for tax purposes; and

(b) in relation to that enterprise, that trustee would, in

accordance with the principles of Article 5, have a

permanent establishment in Australia,


carried on in Australia by that resident through a permanent

establishment situated in Australia and that share of business profits shall

be attributable to that permanent establishment.”.

ARTICLE 7

Paragraph (4) of Article 8 of the Convention shall be deleted and replaced

by the following:

“(4) For the purposes of this Article, profits derived from the

carriage by ships or aircraft of passengers, livestock, mail, goods or

merchandise taken on board in a Contracting State for discharge at a

place in that State shall be treated as profits from operations confined

solely to places in that State.”.

ARTICLE 8

1. Paragraphs (2), (4) and (6) of Article 10 of the Convention shall be

deleted and respectively replaced by the following:



“(2) However, those dividends may also be taxed in the

Contracting State of which the company paying the dividends is a

resident for the purposes of its tax, and according to the law of that State,

but the tax so charged shall not exceed:

(a) (i) in the case of dividends paid by a company that is a

resident of Australia for the purposes of its tax, 5 per

cent of the gross amount of the dividends, to the

extent to which the dividends have been fully franked

in accordance with the law of Australia, if a company

that holds directly at least 10 per cent of the voting

power of the company paying the dividends is

beneficially entitled to those dividends; and

(ii) in the case of dividends paid by a company that is a

resident of Canada for the purposes of its tax, except

in the case of dividends paid by a non-resident-owned

investment corporation that is a resident of Canada for

the purposes of its tax, 5 per cent of the gross amount

of the dividends if a company that controls directly or

indirectly at least 10 percent of the voting power in

the company paying the dividends is beneficially

entitled to those dividends; and

(b) 15 per cent of the gross amount of the dividends in all other

cases,

and if the relevant law of either Contracting State is varied in a manner

that bears upon this provision, otherwise than in minor respects so as not

to affect its general character, the Contracting States shall consult each

other with a view to agreeing to any amendment of this paragraph that

may be appropriate.”;

“(4) The term “dividends” as used in this Article means income

from shares, as well as other amounts which are subjected to the same

taxation treatment as income from shares by the law of the State of which

the company making the distribution is a resident for the purposes of its

tax.”; and

“(6) Canada may impose, on the earnings attributable to a

permanent establishment in Canada of a company which is a resident of

Australia or on the earnings of such company attributable to the



alienation of real property situated in Canada where the company is

carrying on a trade in real property, a tax (in this paragraph referred to as

a “branch tax”) in addition to the tax that would be chargeable on the

earnings of a company that is a resident of Canada, except that any

branch tax so imposed shall not exceed 5 per cent of the amount of such

earnings that have not been subjected to such branch tax in previous

taxation years. For the purposes of this provision, the term “earnings”

means the earnings attributable to the alienation of such real property

situated in Canada as may be taxed by Canada under the provisions of

Article 6 or paragraph (1) of Article 13, and the profits, including any

gains, attributable to a permanent establishment in Canada in a year and

previous years after deducting therefrom all other taxes, other than the

branch tax referred to herein, imposed on such profits in Canada.”.

2. The reference in paragraph (7) of Article 10 of the Convention to “15 per

cent” shall be deleted and replaced by a reference to “5 per cent”.

ARTICLE 9

The reference in paragraph (2) of Article 11 of the Convention to “15 per

cent” shall be deleted and replaced by a reference to “10 per cent”.

ARTICLE 10

1. Paragraph (3) of Article 12 of the Convention shall be deleted and

replaced by the following:

“(3) The term “royalties” as used in this Article means payments

or credits, whether periodical or not, and however described or computed,

to the extent to which they are made as consideration for:

(a) the use of, or the right to use, any copyright, patent, design

or model, plan, secret formula or process, trade mark or

other like property or right; or

(b) the use of, or the right to use, any industrial, commercial or

scientific equipment; or

(c) the supply of scientific, technical, industrial or commercial

knowledge or information; or



(d) the supply of any assistance that is ancillary and subsidiary

to, and is furnished as a means of enabling the application or

enjoyment of, any such property or right as is mentioned in

subparagraph (a), any such equipment as is mentioned in

subparagraph (b) or any such knowledge or information as is

mentioned in subparagraph (c); or

(e) the use of, or the right to use:


(ii) films or videotapes or other means of reproduction for

use in connection with television; or

(iii) tapes for use in connection with radio broadcasting; or

(f) total or partial forbearance in respect of the use or supply of

any property or right referred to in this paragraph.”.


follows:

“(7) Without prejudice to whether or not such payments would be

dealt with as royalties under this Article in the absence of this paragraph,

the term “royalties” as used in this Article shall not include payments or

credits made as consideration for the supply of, or the right to use, source

code in a computer software program, provided that the right to use the

source code is limited to such use as is necessary to enable effective

operation of the program by the user.”.


follows:

“(8) Without prejudice to whether or not such payments would be

dealt with as royalties under this Article in the absence of this paragraph,

the term “royalties” as used in this Article shall include payments or

credits, whether periodical or not, and however described or computed, to

the extent to which they are made as consideration for:

(a) the reception of, or the right to receive, visual images or

sounds, or both, that are transmitted to the public by satellite

or by cable, optic fibre or similar technology; or



(b) the use of, or the right to use, in connection with television

or radio broadcasting, visual images or sounds, or both, that

are transmitted by satellite or by cable, optic fibre or similar

technology; or

(c) total or partial forbearance in respect of the use or supply of

any property or right referred to in this paragraph.”.

ARTICLE 11


following:

“ARTICLE 13


(1) Income, profits or gains derived by a resident of a

Contracting State from the alienation of real property situated in the other

Contracting State may be taxed in that other State.

(2) Income, profits or gains from the alienation of property,

other than real property, that forms part of the business property of a

permanent establishment which an enterprise of a Contracting State has

in the other Contracting State or pertains to a fixed base available in that

other State to a resident of the first-mentioned State for the purpose of

performing independent personal services, including income, profits or

gains from the alienation of that permanent establishment (alone or with

the whole enterprise) or of that fixed base, may be taxed in that other

State.

(3) Income, profits or gains from the alienation of ships or

aircraft operated in international traffic, or of property, other than real

property, pertaining to the operation of those ships or aircraft, shall be

taxable only in the Contracting State of which the enterprise alienating

such ships, aircraft, or other property is a resident.


Contracting State from the alienation of any shares or other interests in a

company, or of an interest of any kind in a partnership, trust or other

entity, where the value of the assets of such entity is derived principally,

whether directly or indirectly (including through one or more interposed



entities, such as, for example, through a chain of companies), from real

property situated in the other Contracting State, may be taxed in that

other State.

(5) Nothing in this Convention shall affect the application of a

law of a Contracting State relating to the taxation of gains of a capital

nature derived from the alienation of any property other than that to

which any of the preceding paragraphs of this Article apply.

(6) Where an individual who ceases to be a resident of a

Contracting State, and immediately thereafter becomes a resident of the

other Contracting State, is treated for the purposes of taxation in the

first-mentioned State as having alienated a property and is taxed in that

State by reason thereof, the individual may elect to be treated for the

purposes of taxation in the other State as if the individual had,

immediately before becoming a resident of that State, disposed of and

re-acquired the property for an amount equal to its fair market value at

that time.”.

ARTICLE 12

1. Paragraphs (2) and (3) of Article 15 of the Convention shall be deleted

and replaced by the following:

“(2) Notwithstanding the provisions of paragraph (1),

remuneration derived by an individual who is a resident of a Contracting

State in respect of an employment exercised in the other Contracting

State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other State for a period or

periods not exceeding in the aggregate 183 days in any

twelve month period commencing or ending in the year of

income or taxation year of that other State; and

(b) the remuneration is paid by, or on behalf of, an employer

who is not a resident of that other State; and

(c) the remuneration is not deductible in determining taxable

profits of a permanent establishment or a fixed base which

the employer has in that other State.”.



2. Paragraph (4) of Article 15 of the Convention shall be renumbered as

paragraph (3).

ARTICLE 13


following:

“ARTICLE 22

Source of Income


Contracting State which, under any one or more of Articles 6 to 8 and 10

to 19, may be taxed in the other Contracting State, shall for the purposes

of the law of that other Contracting State relating to its tax be deemed to

be income from sources in that other Contracting State.


Contracting State which, under any one or more of Articles 6 to 8 and 10

to 19, may be taxed in the other Contracting State, shall for the purposes

of Article 23 and of the law of the first-mentioned Contracting State

relating to its tax be deemed to be income from sources in the other

Contracting State.”.

ARTICLE 14


following:

“ARTICLE 23

Elimination of Double Taxation

(1) In the case of Australia, double taxation shall be avoided as

follows:

(a) subject to the provisions of the law of Australia from time to

time in force which relate to the allowance of a credit against

Australian tax of tax paid in a country outside Australia

(which shall not affect the general principle of this Article),



Canadian tax paid under the law of Canada and in

accordance with this Convention, whether directly or by

deduction, in respect of income derived by a person who is a

resident of Australia from sources in Canada shall be

allowed as a credit against Australian tax payable in respect

of that income;

(b) subject to the provisions of the law of Australia from time to

time in force which relate to the allowance of a credit against

Australian tax of tax paid in a country outside Australia

(which shall not affect the general principle of this Article),

where a company which is a resident of Canada and is not a

resident of Australia for the purposes of Australian tax pays

a dividend to a company which is a resident of Australia and

which controls directly or indirectly at least 10 per cent of

the voting power of the first-mentioned company, the credit

referred to in subparagraph (a) shall include the Canadian

tax paid by that first-mentioned company in respect of that

portion of its profits out of which the dividend is paid.

(2) In the case of Canada, double taxation shall be avoided as

follows:

(a) subject to the existing provisions of the law of Canada

regarding the deduction from tax payable in Canada of tax

paid in a territory outside Canada and to any subsequent

modification of those provisions (which shall not affect the

general principle hereof) and unless a greater deduction or

relief is provided under the laws of Canada, tax payable in

Australia on profits, income or gains from sources in

Australia shall be deducted from any Canadian tax payable

in respect of such profits, income or gains;

(b) subject to the existing provisions of the law of Canada

regarding the allowance as a credit against Canadian tax of

tax payable in a territory outside Canada and to any

subsequent modification of those provisions (which shall not

affect the general principle hereof) where a company which

is a resident of Australia pays a dividend to a company

which is a resident of Canada and which controls directly or

indirectly at least 10 per cent of the voting power in the

first-mentioned company, the credit shall take into account



the tax payable in Australia by that first-mentioned company

in respect of the profits out of which such dividend is paid;

and

(c) where, in accordance with any provision of this Convention,

income derived by a resident of Canada is exempt from tax

in Canada, Canada may nevertheless, in calculating the

amount of tax on other income, take into account the

exempted income.”.

ARTICLE 15

A new paragraph (6) shall be added to Article 24 of the Convention as

follows:

“(6) For the purposes of paragraph 3 of Article XXII

(Consultation) of the General Agreement on Trade in Services, the

Contracting States agree that, notwithstanding that paragraph, any dispute

between them as to whether a measure falls within the scope of this

Convention may be brought before the Council for Trade in Services, as

provided by that paragraph, only with the consent of both Contracting

States. Any doubt as to the interpretation of this paragraph shall be

resolved under paragraph (3) of this Article or, failing agreement under

that procedure, pursuant to any other procedure agreed to by both

Contracting States.”.

ARTICLE 16

A new Article 26A shall be added to the Convention immediately after

Article 26 as follows:

“ARTICLE 26A

Various Interests of Canadian Residents

Nothing in this Convention shall be construed as preventing

Canada from imposing a tax on amounts included in the income of a

resident of Canada with respect to a partnership, trust, or controlled

foreign affiliate, in which that resident has an interest.”.



ARTICLE 17

The Government of Australia and the Government of Canada shall notify

each other through the diplomatic channel of the completion of their respective

internal procedures required for the bringing into force of this Protocol which

shall form an integral part of the Convention. The Protocol shall enter into force

on the date of the later of these notifications and its provisions shall thereupon

have effect:

(a) in Australia:

(i) in respect of withholding tax on income that is derived

by a non-resident, in relation to income derived on or

after 1 January in the calendar year next following

that in which the Protocol enters into force; and

(ii) in respect of other Australian tax, in relation to

income, profits or gains of any year of income

beginning on or after 1 July in the calendar year next

following that in which the Protocol enters into force;

(b) in Canada:

(i) in respect of tax withheld at the source on amounts

paid or credited to non-residents, on or after 1 January


Protocol enters into force; and

(ii) in respect of other Canadian tax, for taxation years

beginning on or after 1 January in the calendar year

next following that in which the Protocol enters into

force.

IN WITNESS WHEREOF the undersigned, duly authorised thereto by

their respective Governments, have signed this Protocol.

DONE at Canberra, this twenty-third day of January 2002, in the English

and French languages, the two versions being equally authentic.



FOR THE GOVERNMENT FOR THE GOVERNMENT

OF AUSTRALIA: OF CANADA:

Helen Lloyd Coonan Jean T. Fournier


Schedule 4 Agreement between the Government of Australia and the Government of

New Zealand for the Avoidance of Double Taxation and the Prevention of Fiscal

Evasion with respect to Taxes on Income


Schedule 4—Agreement between the


Government of New Zealand for the

Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with

respect to Taxes on Income Section 3

THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF

NEW ZEALAND

DESIRING to conclude an Agreement for the avoidance of double taxation and


HAVE AGREED as follows:

Article 1

Personal scope

This Agreement shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

Taxes covered

1. The existing taxes to which this Agreement shall apply are:

(a) In New Zealand:

the income tax and the fringe benefit tax;

(b) In Australia:

the income tax, the resource rent tax in respect of offshore projects

relating to exploration for or exploitation of petroleum resources and

the fringe benefits tax imposed under the federal law of Australia.

2. This Agreement shall apply also to any identical or substantially similar

taxes which are imposed under the federal law of Australia or the law of New

Zealand after the date of signature of this Agreement in addition to, or in place

Agreement between the Government of Australia and the Government of New Zealand

for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect

to Taxes on Income Schedule 4


of, the existing taxes. The competent authorities of the Contracting States shall

notify each other within a reasonable period of time of any significant changes

which have been made in the law of their respective States relating to the taxes

to which this Agreement applies.

Article 3

General definitions

1. For the purposes of this Agreement, unless the context otherwise requires:

(a) (i) the term “New Zealand” means the territory of New Zealand but

does not include Tokelau or the Associated Self Governing States

of the Cook Islands and Niue; it also includes any area beyond the

territorial sea which by New Zealand legislation and in accordance

with international law has been, or may hereafter be, designated as

an area in which the rights of New Zealand with respect to natural

resources may be exercised;

(ii) the term “Australia”, when used in a geographical sense, excludes


(A) the Territory of Norfolk Island;

(B) the Territory of Christmas Island;

(C) the Territory of Cocos (Keeling) Islands;

(D) the Territory of Ashmore and Cartier Islands;

(E) the Territory of Heard Island and McDonald Islands; and

(F) the Coral Sea Islands Territory,






subsoil of the continental shelf;

(b) the term “Australian tax” means tax imposed by Australia, being tax to

which this Agreement applies by virtue of Article 2;

(c) the term “company” means any body corporate or any entity which is


(d) the term “competent authority” means:

(i) in the case of New Zealand, the Commissioner of Inland Revenue

or an authorised representative of the Commissioner; and


authorised representative of the Commissioner;





(e) the terms “a Contracting State” and “other Contracting State” mean

New Zealand or Australia, the Governments of which have concluded

this Agreement, as the context requires;

(f) the terms “enterprise of a Contracting State” and “enterprise of the other

Contracting State” mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident

of the other Contracting State;

(g) the term “international traffic” means any transport by a ship or aircraft

operated by an enterprise of a Contracting State, except when the ship

or aircraft is operated solely from a place or between places in the other

Contracting State;

(h) the term “New Zealand tax” means tax imposed by New Zealand, being

tax to which this Agreement applies by virtue of Article 2;

(i) the term “paid”, in relation to any amount, includes distributed (whether

in cash or other property), credited or dealt with on behalf of a person or

at that person’s direction; and the terms “pay, payable” and “payment”

have corresponding meanings;

(j) the term “person” includes an individual, a company and any other

body of persons;

(k) the term “tax” means New Zealand tax or Australian tax, as the context

requires, but does not include any penalty or interest imposed under the

law of either Contracting State relating to its tax.

2. For the purposes of Articles 10, 11 and 12, a trustee subject to tax in a

Contracting State in respect of dividends, interest or royalties shall be deemed

to be beneficially entitled to such dividends, interest or royalties.

3. In the application of this Agreement by a Contracting State, any term not

defined in this Agreement shall, unless the context otherwise requires, have the

meaning which it has under the law of that State from time to time in force

relating to the taxes to which this Agreement applies.

Article 4

Residence

1. For the purposes of this Agreement, a person is a resident of a Contracting

State:

(a) in the case of New Zealand, if the person is resident in New Zealand for

the purposes of New Zealand tax; and





(b) in the case of Australia, if the person is a resident of Australia for the

purposes of Australian tax.

2. A person is not a resident of a Contracting State for the purposes of this

Agreement if the person is liable to tax in that State in respect only of income

from sources in that State.

3. Where by reason of the preceding provisions of this Article a person, being

an individual, is a resident of both Contracting States, then the status of the

person shall be determined in accordance with the following rules:

(a) the person shall be deemed to be a resident solely of the State in which

a permanent home is available to the person; if a permanent home is

available to the person in both States, the person shall be deemed to be a

resident solely of the State with which the person’s personal and

economic relations are closer;

(b) if the person is unable to be deemed to be a resident solely of a State in

accordance with the provisions of subparagraph (a), the person shall be

deemed to be a resident solely of the State in which the person has an

habitual abode;

(c) if the person has an habitual abode in both States or in neither of them,

the person shall be deemed to be a resident solely of the State of which

the person is a citizen.

4. Where by reason of the provisions of paragraphs 1 and 2 a person other

than an individual is a resident of both Contracting States then it shall be

deemed to be a resident solely of the Contracting State in which its place of

effective management is situated.

Article 5

Permanent establishment

1. For the purposes of this Agreement, the term “permanent establishment”



2. The term “permanent establishment” includes especially:


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;






natural resources; and


3. A building site, or a construction, installation or assembly project

constitutes a permanent establishment if it lasts for more than 6 months.

4. An enterprise shall be deemed to have a permanent establishment in a


establishment if:

(a) it carries on supervisory activities in that State for more than 6 months

in connection with a building site or a construction, installation or

assembly project which is being undertaken in that State; or

(b) in that State it carries on activities which consist of, or which are

connected with, the exploration for or exploitation of natural resources

situated in that State; or

(c) substantial equipment is being used in that State by, for or under

contract with the enterprise; or

(d) it performs in that State any operations for the felling, removal or other

exploitation of standing timber.

5. For the purposes of determining the duration of activities under paragraph

3 and subparagraph 4(a), the period during which activities are carried on in a

Contracting State by an enterprise associated with another enterprise shall be

aggregated with the period during which activities are carried on by the

enterprise with which it is associated if the firstmentioned activities are

connected with the activities carried on in that State by the lastmentioned

enterprise, provided that any period during which two or more associated

enterprises are carrying on concurrent activities is counted only once. An

enterprise shall be deemed to be associated with another enterprise if one is

controlled directly or indirectly by the other, or if both are controlled directly or

indirectly by a third person or persons.

6. An enterprise shall not be deemed to have a “permanent establishment”

merely by reason of:


of goods or merchandise belonging to the enterprise; or


enterprise solely for the purpose of storage, display or delivery; or






enterprise solely for the purpose of processing by another enterprise; or


purchasing goods or merchandise, or of collecting information, for the

enterprise; or


carrying on, for the enterprise, any other activity of a preparatory or

auxiliary character, such as advertising or scientific research.

7. Notwithstanding the provisions of paragraphs 1 and 2, a person acting in a

Contracting State on behalf of an enterprise of the other Contracting State—

other than an agent of an independent status to whom paragraph 8 applies—

shall be deemed to be a permanent establishment of that enterprise in the

firstmentioned State if:

(a) the person has and habitually exercises in the firstmentioned State an

authority to conclude contracts on behalf of that enterprise, unless the

activities of that person are limited to those described in paragraph 6

and, if exercised through a fixed place of business, would not make this

fixed place of business a permanent establishment under the provisions

of that paragraph; or

(b) in so acting, the person manufactures or processes in that State for the

enterprise goods or merchandise belonging to that enterprise.

8. An enterprise of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries

on business in that other State through a person who is a broker, general

commission agent or any other agent of an independent status and is acting in

the ordinary course of the person’s business as such a broker or agent.

9. The fact that a company which is a resident of a Contracting State controls

or is controlled by a company which is a resident of the other Contracting State,

or which carries on business in that other State (whether through a permanent

establishment or otherwise), shall not of itself make either company a

permanent establishment of the other.

10. The principles set forth in the preceding paragraphs of this Article shall be

applied in determining for the purposes of paragraph 5 of Article 11 and

paragraph 5 of Article 12 whether there is a permanent establishment outside

both Contracting States, and whether an enterprise, not being an enterprise of a

Contracting State, has a permanent establishment in a Contracting State.





Article 6

Income from real property

1. Income derived by a resident of a Contracting State from real property

situated in the other Contracting State may be taxed in that other State.

2. The term “real property” shall have the meaning which it has under the law

of the Contracting State in which that property is situated and shall in any case

include:

(a) a lease of land and any other interest in or over land, whether that land

is improved or not;

(b) a right to explore for or exploit mineral, oil or gas deposits, or other

natural resources;

(c) a right to receive variable or fixed payments either:

(i) as consideration for or in respect of the exploitation of, or

(ii) for the right to explore for or exploit,

mineral, oil or gas deposits, or other natural resources.

3. The provisions of paragraph 1 shall apply to income derived from the

direct use, letting, or use in any other form of real property.

4. Any interest or right referred to in paragraph 2 shall be regarded as situated

where the land, mineral, oil or gas deposits, quarries or natural resources, as the

case may be, are situated or where the exploration or exploitation may take

place.

5. The provisions of paragraphs 1, 3 and 4 shall also apply to income from

real property of an enterprise and to income from real property used for the

performance of independent personal services.

Article 7

Business profits

1. The profits of an enterprise of a Contracting State shall be taxable only in


through a permanent establishment situated in that other State. If the enterprise

carries on business in that manner, the profits of the enterprise may be taxed in

the other State but only so much of them as is attributable to that permanent

establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a

Contracting State carries on business in the other Contracting State through a

permanent establishment situated in that other State, there shall in each





Contracting State be attributed to that permanent establishment the profits

which it might be expected to make if it were a distinct and separate enterprise

engaged in the same or similar activities under the same or similar conditions

and dealing wholly independently with the enterprise of which it is a permanent


3. In the determination of the profits of a permanent establishment, there shall

be allowed as deductions expenses of the enterprise which are incurred for the

purposes of the permanent establishment (including executive and general

administrative expenses so incurred), whether incurred in the Contracting State

in which the permanent establishment is situated or elsewhere. However, no

deduction is allowable in respect of expenses which are not deductible under the

law of the Contracting State in which the permanent establishment is situated.

4. No profits shall be attributed to a permanent establishment by reason of the

mere purchase by that permanent establishment of goods or merchandise for the

enterprise.

5. Nothing in this Article shall affect the application of any law of a




establishment, provided that that law shall be applied, so far as the information

available to the competent authority permits, consistently with the principles of

this Article.

6. For the purposes of the preceding paragraphs of this Article, the profits to

be attributed to the permanent establishment shall be determined by the same

method year by year unless there is good and sufficient reason to the contrary.

7. Where:

(a) a resident of a Contracting State is beneficially entitled, whether

directly or through one or more interposed trusts, to a share of the

business profits of an enterprise carried on in the other Contracting

State by the trustee of a trust other than a trust which is treated as a


(b) in relation to that enterprise, that trustee would, in accordance with the

principles of Article 5, have a permanent establishment in that other

State,

the enterprise carried on by the trustee shall be deemed to be a business carried

on in the other State by that resident through a permanent establishment situated





in that other State and that share of business profits shall be attributed to that


8. Where profits include items of income or gains which are dealt with

separately in other Articles of this Agreement, then the provisions of those


9. Nothing in this Article shall affect the operation of any law of a

Contracting State relating to tax imposed on any income, profits or gains from

the business of any form of insurance. Provided that if the relevant law in force

in either Contracting State at the date of signature of this Agreement is varied

(otherwise than in minor respects so as not to affect its general character) the

Contracting States shall consult each other with a view to agreeing to any

amendment of this paragraph that may be appropriate.

Article 8

Ships and aircraft

1. Profits from ship or aircraft operations derived by a resident of a

Contracting State shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, such profits may be taxed

in the other Contracting State where they are profits from ship or aircraft

operations confined solely to places in that other State.

3. The provisions of paragraphs 1 and 2 shall apply in relation to the share of

the profits from ship or aircraft operations derived by a resident of a Contracting

State through participation in a pool service, in a joint business or operating

organisation or in an international operating agency.

4. For the purposes of this Article, profits derived from the carriage by ships

or aircraft of passengers, livestock, mail, goods or merchandise which are

shipped in a Contracting State for discharge at a place in that State shall be

treated as profits from ship or aircraft operations confined solely to places in

that State.

Article 9

Associated enterprises

1. Where:

(a) an enterprise of a Contracting State participates directly or indirectly in

the management, control or capital of an enterprise of the other







control or capital of an enterprise of a Contracting State and an

enterprise of the other Contracting State,












attributed to an enterprise, provided that that law shall be applied, so far as it is

practicable to do so, consistently with the principles of this Article.

3. Where profits on which an enterprise of a Contracting State has been

charged to tax in that State are also included, by virtue of paragraph 1 or 2, in

the profits of an enterprise of the other Contracting State and charged to tax in

that other State, and the profits so included are profits which might have been

expected to have accrued to that enterprise of the other State if the conditions

operative between the enterprises had been those which might have been

expected to have operated between independent enterprises dealing wholly

independently with one another, then the firstmentioned State shall make an

appropriate adjustment to the amount of tax charged on those profits in the

firstmentioned State. In determining such an adjustment, due regard shall be had

to the other provisions of this Agreement and for this purpose the competent

authorities of the Contracting States shall if necessary consult each other.

Article 10

Dividends

1. Dividends paid by a company which is a resident of a Contracting State for

the purposes of its tax, being dividends to which a resident of the other

Contracting State is beneficially entitled, may be taxed in that other State.

2. Those dividends may also be taxed in the Contracting State of which the







cent of the gross amount of the dividends. Provided that any deemed dividend

arising from the business of life insurance consequent upon an election made

and approved under section 204M of the Income Tax Act 1976 of New Zealand,

or any legislation enacted in substitution for that section, shall be taxed at a rate

not exceeding 5 per cent of the gross amount of such dividend.

3. The term “dividends” in this Article means income from shares and other

income assimilated to income from shares by the law, relating to tax, of the

Contracting State of which the company making the payment is a resident for


4. The provisions of paragraph 2 shall not apply if the person beneficially

entitled to 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 in that other

State, or performs in that other State independent personal services from a fixed

base situated in that other State, and the holding in respect of which the

dividends are paid is effectively connected with that permanent establishment or

fixed base. In that case, the provisions of Article 7 or 14, as the case may be,

shall apply.

5. Dividends paid by a company which is a resident of a Contracting State,

being dividends to which a person who is not a resident of the other Contracting

State is beneficially entitled, shall be exempt from tax in that other State except

in so far as the holding in respect of which the dividends are paid is effectively

connected with a permanent establishment or fixed base situated in that other

State. This paragraph shall not apply in relation to dividends paid by any

company which is a resident of Australia for the purposes of Australian tax and

which is also resident in New Zealand for the purposes of New Zealand tax.

Article 11

Interest

1. Interest arising in a Contracting State, being interest to which a resident of

the other Contracting State is beneficially entitled, may be taxed in that other

State.

2. That interest may be taxed in the Contracting State in which it arises, and


cent of the gross amount of the interest.

3. The term “interest” in this Article includes interest on indebtedness of

every kind, whether or not secured by mortgage and whether or not carrying a





right to participate in profits, and in particular, interest from government

securities and income from bonds or debentures, including premiums and prizes

attaching to such bonds or debentures, as well as all other income assimilated to

income from money lent by the law, relating to tax, of the Contracting State in

which the income arises, but does not include any income which is treated as a

dividend under Article 10.


entitled to the interest, being a resident of a Contracting State, carries on

business in the other Contracting State, in which the interest arises, through a

permanent establishment situated in that other State, or performs in that other

State independent personal services from a fixed base situated in that other

State, and the indebtedness in respect of which the interest is paid is effectively

connected with that permanent establishment or fixed base. In that case the

provisions of Article 7 or 14, as the case may be, shall apply.

5. Interest shall be deemed to arise in a Contracting State when the payer is

that State itself or a political subdivision or a local authority of that State, or a

person who is a resident of that State for the purposes of its tax. Where,

however, the person paying the interest, whether the person is a resident of a

Contracting State or not, has in a Contracting State or outside both Contracting

States a permanent establishment or fixed base in connection with which the

indebtedness on which the interest is paid was incurred, and that interest is

deductible in determining the income, profits or gains attributable to that

permanent establishment or fixed base, then the interest shall be deemed to arise

in the State in which the permanent establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the


other person, the amount of the interest, having regard to the indebtedness for


been agreed upon in the absence of that relationship by the payer and the person

beneficially entitled, the provisions of this Article shall apply only to the

lastmentioned amount. In that case the excess part of the amount of the interest

paid shall remain taxable according to the law, relating to tax, of each

Contracting State, subject to the other provisions of this Agreement.





Article 12

Royalties

1. Royalties arising in a Contracting State, being royalties to which a resident

of the other Contracting State is beneficially entitled, may be taxed in that other

State.

2. Those royalties may be taxed in the Contracting State in which they arise,


per cent of the gross amount of the royalties.

3. The term “royalties” in this Article means payments of any kind, whether



(a) the use of, or the right to use, any copyright, patent, trademark, design

or model, plan, secret formula or process, or other like property or right;

or

(b) the use of, or the right to use, any industrial, scientific or commercial

equipment; or

(c) the supply of scientific, technical, industrial or commercial knowledge

or information; or

(d) the supply of any assistance that is ancillary and subsidiary to, and is

furnished as a means of enabling the application or enjoyment of, any

such property or right as is mentioned in subparagraph (a), any such

equipment as is mentioned in subparagraph (b) or any such knowledge

or information as is mentioned in subparagraph (c); or

(e) the use of, or the right to use, any:

(i) motion picture film; or

(ii) film or videotape for use in connection with television; or

(iii) tape for use in connection with radio broadcasting; or

(f) the reception of, or the right to receive, visual images or sounds, or

both, transmitted to the public by:

(i) satellite; or

(ii) cable, optic fibre or similar technology; or

(g) the use in connection with television broadcasting or radio

broadcasting, or the right to use in connection with television

broadcasting or radio broadcasting, visual images or sounds, or both,

transmitted by:

(i) satellite; or

(ii) cable, optic fibre or similar technology; or





(h) total or partial forbearance in respect of the use or supply of any



entitled to the royalties, being a resident of a Contracting State, carries on

business in the other Contracting State, in which the royalties arise, through a

permanent establishment situated in that other State, or performs in that other

State independent personal services from a fixed base situated in that other

State, and the property or right in respect of which the royalties are paid is

effectively connected with that permanent establishment or fixed base. In that

case the provisions of Article 7 or 14, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is

that State itself or a political subdivision or local authority of that State or a


however, the person paying the royalties, whether the person is a resident of a



liability to pay the royalties was incurred, and the royalties are deductible in

determining the income, profits or gains attributable to that permanent

establishment or fixed base, then the royalties shall be deemed to arise in the

State in which the permanent establishment or fixed base is situated.


person beneficially entitled to the royalties, or between both of them and some

other person, the amount of the royalties, having regard to what they are paid

for, exceeds the amount which might have been expected to have been agreed

upon in the absence of that relationship by the payer and the person beneficially

entitled, the provisions of this Article shall apply only to the lastmentioned

amount. In that case the excess part of the amount of the royalties paid shall

remain taxable according to the law, relating to tax, of each Contracting State,

subject to the other provisions of this Agreement.

Article 13

Alienation of property

1. Income, profits or gains derived by a resident of a Contracting State from

the alienation of real property situated in the other Contracting State may be


2. Income, profits or gains from the alienation of property, other than real

property, forming part of the business property of a permanent establishment





which an enterprise of a Contracting State has in the other Contracting State or

pertaining to a fixed base available to a resident of a Contracting State in the

other Contracting State for the purpose of performing independent personal

services, including income, profits or gains from the alienation of that

permanent establishment (alone or with the whole enterprise) or of that fixed

base, may be taxed in that other State.

3. Income, profits or gains derived by a resident of a Contracting State from

the alienation of shares or comparable interests in a company, the assets of

which consist wholly or principally of real property situated in the other

Contracting State, may be taxed in that other State.

4. Income, profits or gains from the alienation of ships or aircraft operated in

international traffic, or of property (other than real property) pertaining to the

operation of those ships or aircraft, shall be taxable only in the Contracting

State in which the enterprise alienating such ships, aircraft or other property is a

resident.

5. Nothing in this Agreement affects the application of a law of a Contracting

State relating to the taxation of gains of a capital nature derived from the

alienation of any property other than that to which any of the preceding

paragraphs of this Article apply.

6. In this Article, the term “real property” has the same meaning as it has in

Article 6.

7. For the purposes of this Article, the situation of real property shall be

determined in accordance with paragraph 4 of Article 6.

Article 14

Independent personal services

1. Income derived by an individual who is a resident of a Contracting State in

respect of professional services or other independent activities shall be taxable

only in that State unless such services are performed in the other Contracting

State and:

(a) the individual is present in the other State for a period or periods

exceeding in the aggregate 183 days in any 12 month period

commencing or ending in the year of income concerned; or

(b) a fixed base is regularly available to the individual in the other State for

the purpose of performing the individual’s activities.





If the provisions of subparagraphs (a) or (b) are satisfied, the income may be

taxed in that other State but only so much of it as is attributable to activities

performed during such period or periods or from that fixed base.

2. The term “professional services” includes services performed in the


activities as well as in the performance of the independent activities of

physicians, lawyers, engineers, architects, dentists and accountants.

Article 15

Dependent personal services

1. Subject to the provisions of Articles 16, 17, 19 and 20, salaries, wages and

other similar remuneration derived by an individual who is a resident of a

Contracting State in respect of an employment shall be taxable only in that State

unless the employment is exercised in the other Contracting State. If the



2. Notwithstanding the provisions of paragraph 1, remuneration derived by an

individual who is a resident of a Contracting State in respect of an employment

exercised in the other Contracting State shall be taxable only in the

firstmentioned State if:


exceeding in the aggregate 183 days in any 12 month period

commencing or ending in the year of income concerned; and


resident of that other State; and

(c) the remuneration is not deductible in determining the taxable profits of

a permanent establishment or fixed base which the employer has in that

other State; and

(d) the remuneration is, or upon application of this Article will be, subject

to tax in the firstmentioned State.

3. Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated

in international traffic by a resident of a Contracting State may be taxed in that

State.





Article 16

Fringe benefits

1. Where, except for the application of this Article, a fringe benefit would be

subject to tax in both Contracting States the benefit will be taxable solely in the

Contracting State which has the sole or primary taxing right in respect of the

remuneration from the employment to which the benefit relates.


(a) “fringe benefit” includes a benefit provided to an employee or to an

associate of an employee by:

(i) an employer,

(ii) an associate of an employer, or

(iii) a person under an arrangement between that person and the

employer, associate of an employer, or another person in

respect of the employment of that employee,

and includes an accommodation allowance or housing benefit so

provided;

(b) a Contracting State has a “primary taxing right” if it has a taxing right

under this Agreement in respect of the remuneration for the relevant

employment and the other Contracting State is required under this

Agreement to allow relief for any taxes imposed in respect of such

remuneration by the first Contracting State.

Article 17

Directors’ fees

Directors’ fees and similar payments derived by a resident of a Contracting

State in that person’s capacity as a member of the board of directors of a


other State.

Article 18

Entertainers

1. Notwithstanding the provisions of Articles 14 and 15, income derived by

entertainers (such as theatrical, motion picture, radio or television artistes,

musicians, athletes and other sportspersons) from their personal activities as

such may be taxed in the Contracting State in which these activities are

exercised.





2. Where income in respect of the personal activities of an entertainer as such

accrues not to that entertainer but to another person, that income may,

notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the


3. The provisions of paragraphs 1 and 2 shall not apply to the income of a

sportsperson, being a resident of one or both of the Contracting States for the

purposes of its tax, derived as a member or associate of a recognised team

regularly playing in a league competition organised and conducted solely in

both Contracting States, except in respect of performance as a member or

associate of a national representative team of either Contracting State.

4. The term “associate”, as used in paragraph 3 includes any manager, coach,

trainer, runner, physician, physiotherapist or other provider of a like support

service.

Article 19

Pensions and annuities

1. Pensions (including government pensions) and annuities paid to a resident

of a Contracting State shall be taxable only in that State.

2. The term “annuity” means a stated sum payable periodically at stated times

during life or during a specified or ascertainable period of time under an

obligation to make the payments in return for adequate and full consideration in

money or money’s worth.

3. Any alimony or other maintenance payment arising in a Contracting State

and paid to a resident of the other Contracting State shall be taxable only in the

firstmentioned State.

Article 20

Government service

1. Remuneration (other than a pension or annuity) paid by the Government of

Australia, any Australian State, the Australian Capital Territory or the Northern

Territory, or any other Australian political subdivision or local authority to an

individual in respect of services rendered to any such government in the

discharge of governmental functions shall be exempt from New Zealand tax if

the individual is not a resident of New Zealand for the purposes of New Zealand

tax or is resident in New Zealand for the purposes of New Zealand tax solely for

the purpose of rendering those services.





2. Remuneration (other than a pension or annuity) paid by the Government of

New Zealand, a New Zealand political subdivision or local authority to an

individual in respect of services rendered to that Government, subdivision or

authority in the discharge of governmental functions shall be exempt from

Australian tax if the individual is not a resident of Australia for the purposes of

Australian tax or is resident in Australia for the purposes of Australian tax

solely for the purpose of rendering those services.

3. The provisions of paragraphs 1 and 2 shall not apply to remuneration in


by a government referred to in those paragraphs. In that case the provisions of

Article 15 or 17, as the case may be, shall apply.

Article 21

Students

Where a student, who is a resident of a Contracting State or who was a resident

of that State immediately before visiting the other Contracting State and who is

temporarily present in that other State solely for the purpose of the student’s

education, receives payments from sources outside that other State for the

purpose of the student’s maintenance or education, those payments shall be

exempt from tax in that other State.

Article 22

Other income

1. Items of income of a resident of a Contracting State, wherever arising, not

dealt with in the preceding Articles of this Agreement shall be taxable only in

that State except that if such income is derived from sources within the other

Contracting State, that income may also be taxed in that other State.

2. The provisions of paragraph 1 shall not apply to income, other than income

from real property as defined in paragraph 2 of Article 6, derived by a resident

of a Contracting State where that income is effectively connected with a

permanent establishment or fixed base situated in the other Contracting State. In

that case the provisions of Article 7 or 14, as the case may be, shall apply.

Article 23

Source of income

1. Income, profits or gains derived by a resident of a Contracting State which,

under any one or more of Articles 6 to 8, 10 to 20 and 22, may be taxed in the





other Contracting State shall, for the purposes of the law of that other

Contracting State relating to its tax, be deemed to be income from sources in

that other Contracting State.

2. Income, profits or gains derived by a resident of a Contracting State which,

under any one or more of Articles 6 to 8, 10 to 20 and 22, may be taxed in the

other Contracting State shall, for the purposes of Article 24 and of the law of

the firstmentioned Contracting State relating to its tax, be deemed to be income

from sources in the other Contracting State.

Article 24


1. Subject to the provisions of the law of New Zealand from time to time in

force which relate to the allowance of a credit against New Zealand income tax

of tax paid in a country outside New Zealand (which shall not affect the general

principle of this Article), Australian tax paid under the law of Australia and

consistently with this Agreement, whether directly or by deduction, in respect of

income derived by a resident of New Zealand from sources in Australia

(excluding, in the case of a dividend, tax paid in respect of the profits out of

which the dividend is paid) shall be allowed as a credit against New Zealand tax

payable in respect of that income.

2. Subject to the provisions of the law of Australia from time to time in force

which relate to the allowance of a credit against Australian income tax of tax

paid in a country outside Australia (which shall not affect the general principle

of this Article), New Zealand tax paid under the law of New Zealand and in

accordance with this Agreement, whether directly or by deduction, in respect of

income derived by a person who is a resident of Australia from sources in New

Zealand (excluding, in the case of a dividend, tax paid in respect of the profits

out of which the dividend is paid) shall be allowed as a credit against Australian

income tax payable in respect of that income.

Article 25

Mutual agreement procedure

1. Where a person who is a resident of a Contracting State considers that the

actions of one or both of the competent authorities of the Contracting States

result or will result for the person in taxation not in accordance with the

provisions of this Agreement, the person may, irrespective of the remedies

provided by the domestic law of the Contracting States, present a case to the

competent authority of the Contracting State of which the person is a resident.





The case must be presented within three years from the first notification of the

action which results in taxation not in accordance with the provisions of this

Agreement.

2. The competent authority shall endeavour, if the claim appears to it to be

justified and if it is not itself able to arrive at an appropriate solution, to resolve

the case with the competent authority of the other Contracting State, with a

view to the avoidance of taxation not in accordance with the provisions of this

Agreement. The solution so reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting States.

3. The competent authorities of the Contracting States shall jointly endeavour

to resolve any difficulties or doubts arising as to the interpretation or application

of the provisions of this Agreement.

4. The competent authorities of the Contracting States may communicate with

each other directly for the purpose of giving effect to the provisions of this

Agreement.

Article 26

Exchange of information

1. The competent authorities of the Contracting States shall exchange such

information as is necessary for carrying out the provisions of this Agreement or

of the domestic law of the Contracting States concerning the taxes to which this

Agreement applies insofar as the taxation under that law is not contrary to this

Agreement. The exchange of information is not restricted by Article 1. Any



law of that State and shall be disclosed only to persons or authorities (including

courts and administrative bodies) concerned with the assessment or collection

of, the enforcement or prosecution in respect of, or the determination of appeals

in relation to, the taxes to which this Agreement applies. Such persons or

authorities shall use the information only for such purposes.

2. In no case shall the provisions of paragraph 1 be construed so as to impose

on the competent authority of a Contracting State the obligation:

(a) to carry out administrative measures at variance with the law or


(b) to supply information which is not obtainable under the law or in the


State; or








policy.

Article 27

Diplomatic agents and consular officers

Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents

or consular officers under the general rules of international law or under the

provisions of special international agreements.

Article 28

Entry into force

1. This Agreement shall enter into force on the last date on which the

Contracting States exchange notes through the diplomatic channel notifying

each other that the last of such things has been done as is necessary to give this

Agreement the force of law in New Zealand and in Australia, as the case may

be, and, in that event, this Agreement shall have effect:

(a) in New Zealand:


non--resident, in relation to income derived on or after 1 April

next following the date on which the Agreement enters into

force;

(ii) in respect of other New Zealand tax, for any income year

beginning on or after 1 April next following the date on which

the Agreement enters into force;

(b) in Australia:



next following the date on which the Agreement enters into

force;


provided on or after 1 April next following the date on which

the Agreement enters into force;

(iii) in respect of other Australian tax, in relation to income, profits

or gains of any year of income beginning on or after 1 July next

following the date on which the Agreement enters into force.





2. The Agreement between the Government of the Commonwealth of

Australia and the Government of New Zealand signed at Melbourne on

8 November 1972 shall terminate and cease to have effect in relation to any tax

in respect of which this Agreement comes into effect in accordance with

paragraph 1.

Article 29

Termination

This Agreement shall continue in effect indefinitely, but either Contracting

State may, on or before 30 June in any calendar year beginning after the

expiration of 5 years from the date of its entry into force, give to the other

Contracting State through the diplomatic channel written notice of termination

and, in that event, this Agreement shall cease to be effective:

(a) in New Zealand:


non--resident, on or after 1 April in the calendar year next


(ii) in respect of other New Zealand tax, for any income year

beginning on or after 1 April in the calendar year next following


(b) in Australia:



in the calendar year next following that in which the notice of



provided on or after 1 April in the calendar year next following


(iii) in respect of other Australian tax, in relation to income, profits

or gains of any year of income beginning on or after 1 July in


termination is given.





IN WITNESS WHEREOF the undersigned, duly authorised thereto by their

respective Governments, have signed this Agreement.

DONE in duplicate at MELBOURNE this 27th day of JANUARY, One

thousand nine hundred and ninety--five in the English language.


AUSTRALIA:

FOR THE GOVERNMENT OF NEW

ZEALAND:

RALPH WILLIS BILL BIRCH

Schedule 4A The New Zealand protocol


Schedule 4A—The New Zealand protocol Note: See section 6C

PROTOCOL

AMENDING THE AGREEMENT BETWEEN

THE GOVERNMENT OF AUSTRALIA

AND

THE GOVERNMENT OF NEW ZEALAND

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND

THE PREVENTION OF FISCAL EVASION WITH RESPECT TO

TAXES ON INCOME

Melbourne, 15 November 2005

The New Zealand protocol Schedule 4A


PROTOCOL AMENDING THE AGREEMENT BETWEEN THE

GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF NEW

ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON

INCOME.

The Government of Australia and the Government of New Zealand,

Desiring to amend the Agreement between the Government of New Zealand

and the Government of Australia for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income signed at

Melbourne on the 27th day of January 1995 (in this Protocol referred to as “the

Agreement”),


ARTICLE 1

Article 2 of the Agreement is amended by inserting:

“3. Notwithstanding paragraphs 1 and 2, the taxes to which Articles 26 and

27 shall apply are:

a) in the case of New Zealand, taxes of every kind and description

imposed under its tax laws; and

b) in the case of Australia, taxes of every kind and description

imposed under the federal tax laws administered by the

Commissioner of Taxation.”



ARTICLE 2

Article 26 of the Agreement is omitted and the following Article is substituted:

“Article 26

EXCHANGE OF INFORMATION


information as is forseeably relevant for carrying out the provisions of this

Agreement or to the administration or enforcement of the domestic law

concerning taxes referred to in Article 2, insofar as the taxation thereunder is

not contrary to the Agreement. The exchange of information is not restricted by

Article 1.

2. Any information received under paragraph 1 by a Contracting State

shall be treated as secret in the same manner as information obtained under the

domestic law of that State and shall be disclosed only to persons or authorities

(including courts and administrative bodies) concerned with the assessment or

collection of, the enforcement or prosecution in respect of, the determination of

appeals in relation to, the taxes referred to in paragraph 1, or the oversight of the

above. Such persons or authorities shall use the information only for such

purposes. They may disclose the information in public court proceedings or in

judicial decisions.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as

to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the law

and administrative practice of that or of the other Contracting

State;

b) to supply information which is not obtainable by the competent

authority under the law or in the normal course of the

administration of that or of the other Contracting State;

c) to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process,

or information, the disclosure of which would be contrary to

public policy (ordre public).



4. If information is requested by a Contracting State in accordance with

this Article, the other Contracting State shall use its information gathering

measures to obtain the requested information, even though that other State may

not need such information for its own tax purposes. The obligation contained in

the preceding sentence is subject to the limitations of paragraph 3 but in no case

shall such limitations be construed to permit a Contracting State to decline to

supply information solely because it has no domestic interest in such

information.

5. In no case shall the provisions of paragraph 3 be construed to permit a

Contracting State to decline to supply information solely because the

information is held by a bank, other financial institution, nominee or person

acting in an agency or a fiduciary capacity or because it relates to ownership

interests in a person.”

ARTICLE 3

Article 27, Article 28 and Article 29 of the Agreement are renumbered as

Article 28, Article 29 and Article 30 respectively.

ARTICLE 4

The Agreement is amended by inserting:

“Article 27

ASSISTANCE IN COLLECTION OF TAXES

1. The Contracting States shall lend assistance to each other in the

collection of revenue claims. This assistance is not restricted by Article 1. The

competent authorities of the Contracting States may by mutual agreement settle

the mode of application of this Article.

2. The term “revenue claim” as used in this Article means an amount

owed in respect of taxes referred to in Article 2, insofar as the taxation

thereunder is not contrary to this Agreement or any other instrument to which

the Contracting States are parties, as well as interest, administrative penalties

and costs of collection or conservancy related to such amount.



3. When a revenue claim of a Contracting State is enforceable under the

law of that State and is owed by a person who, at that time, cannot, under the

law of that State, prevent its collection, that revenue claim shall, at the request

of the competent authority of that State, be accepted for purposes of collection

by the competent authority of the other Contracting State. That revenue claim

shall be collected by that other State in accordance with the provisions of its law

applicable to the enforcement and collection of its own taxes as if the revenue

claim were a revenue claim of that other State.

4. When a revenue claim of a Contracting State is a claim in respect of

which that State may, under its law, take measures of conservancy with a view

to ensure its collection, that revenue claim shall, at the request of the competent

authority of that State, be accepted for purposes of taking measures of

conservancy by the competent authority of the other Contracting State. That

other State shall take measures of conservancy in respect of that revenue claim

in accordance with the provisions of its law as if the revenue claim were a

revenue claim of that other State even if, at the time when such measures are

applied, the revenue claim is not enforceable in the first-mentioned State or is

owed by a person who has a right to prevent its collection.

5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim

accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in

that State, be subject to the time limits or accorded any priority applicable to a

revenue claim under the law of that State by reason of its nature as such. In

addition, a revenue claim accepted by a Contracting State for the purposes of

paragraph 3 or 4 shall not, in that State, have any priority applicable to that

revenue claim under the law of the other Contracting State.

6. Proceedings with respect to the existence, validity or the amount of a

revenue claim of a Contracting State shall not be brought before the courts or

administrative bodies of the other Contracting State.

7. Where, at any time after a request has been made by a Contracting State

under paragraph 3 or 4 and before the other Contracting State has collected and

remitted the relevant revenue claim to the first-mentioned State, the relevant

revenue claim ceases to be

a) in the case of a request under paragraph 3, a revenue claim of

the first-mentioned State that is enforceable under the law of

that State and is owed by a person who, at that time, cannot,

under the law of that State, prevent its collection, or

b) in the case of a request under paragraph 4, a revenue claim of

the first-mentioned State in respect of which that State may,



under its law, take measures of conservancy with a view to

ensure its collection

the competent authority of the first-mentioned State shall promptly notify the

competent authority of the other State of that fact and, at the option of the other

State, the first-mentioned State shall either suspend or withdraw its request.

8. In no case shall the provisions of this Article be construed so as to

impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the law


State;

b) to carry out measures which would be contrary to public policy

(ordre public);

c) to provide assistance if the other Contracting State has not

pursued all reasonable measures of collection or conservancy,

as the case may be, available under its law or administrative

practice;

d) to provide assistance in those cases where the administrative

burden for that State is clearly disproportionate to the benefit to

be derived by the other Contracting State;

e) to provide assistance if that State considers that the taxes with

respect to which assistance is requested are imposed contrary to

generally accepted taxation principles.”

ARTICLE 5

With reference to Articles 10, 11 and 12, if in any future Agreement with any

other State, New Zealand should limit its taxation at source of dividends,

interest or royalties to a rate lower than the one provided for in any of those

Articles, the Government of New Zealand shall without undue delay inform the

Government of Australia and shall enter into negotiations with the Government

of Australia with a view to providing the same treatment.



ARTICLE 6

1. The Government of New Zealand and the Government of Australia

shall notify each other in writing through the diplomatic channel of the

completion of their domestic requirements for the entry into force of this

Protocol.

2. The Protocol, which shall form an integral part of the Agreement, shall

enter into force on the date of the last notification, and thereupon the Protocol

shall have effect.

3. Notwithstanding paragraph 2, Article 4 shall have effect from the date

agreed in a subsequent exchange of notes through the diplomatic channel.

In WITNESS WHEREOF the undersigned, being duly authorised thereto by


DONE at Melbourne in duplicate this fifteenth day of November two thousand

and five in the English language.


AUSTRALIA:

Peter Costello


NEW ZEALAND:

Kate Lackey


Agreement between the Government of the Commonwealth of Australia and the

Government of the Republic of Singapore for the Avoidance of Double Taxation and




Government of the Commonwealth of

Australia and the Government of the

Republic of Singapore for the




The Government of the Commonwealth of Australia and the Government of the

Republic of Singapore,

Desiring to conclude an Agreement for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income,


ARTICLE 1

1. The existing taxes to which this Agreement applies are—

(a) in Australia:

the Commonwealth income tax, including the additional tax upon

the undistributed amount of the distributable income of a private

company;

(b) in Singapore:

the income tax.

2. This Agreement applies also to any identical or substantially similar

taxes which are imposed subsequent to the date of signature of this Agreement

by Singapore or the Commonwealth in addition to, or in place of, the existing

taxes to which this Agreement applies.

ARTICLE 2

1. In this Agreement, unless the context otherwise requires—

(a) the term “the Commonwealth” means the Commonwealth of Australia;

Schedule 5 Agreement between the Government of the Commonwealth of Australia

and the Government of the Republic of Singapore for the Avoidance of Double



(b) the term “Australia” means the whole of the Commonwealth and

includes—





(v) any territory which, subsequent to the date of signature of this

Agreement, becomes a Territory of the Commonwealth; and

(vi) any area outside the territorial limits of the Commonwealth and

the said Territories in respect of which there is for the time

being in force a law of the Commonwealth or of a State or part

of the Commonwealth or of a Territory aforesaid dealing with

the exploitation of any of the natural resources of the sea--bed

and sub--soil of the continental shelf;

(c) the term “Singapore” means the Republic of Singapore;

(d) the terms “Contracting State”, “one of the Contracting States”, and

“other Contracting State” mean Australia or Singapore, as the context

requires;

(e) the terms “Australian tax” and “Singapore tax” mean tax imposed by

the Commonwealth and tax imposed by Singapore respectively, being


(f) the term “company” includes any body or association which is treated

as a company for tax purposes;

(g) the term “competent authority” means, in the case of Australia, the

Commissioner of Taxation or his authorised representative and in the

case of Singapore, the Minister for Finance or his authorised

representative;

(h) the term “enterprise” includes undertaking;

(i) the term “Malaysian company” means a company which, for the

purposes of income tax in Malaysia, is resident in Malaysia;

(j) the term “person” includes an individual, a company and any body of

persons, corporate or not corporate;

(k) the terms “profits of a Singapore enterprise” and “profits of an

Australian enterprise” mean profits of a Singapore enterprise or profits

of an Australian enterprise respectively, but do not include—

(i) dividends, interest (as defined in Article 9), or royalties

(including those payments which come within the meaning of





“royalties” for the purposes of Article 10) other than such

dividends, interest or royalties that are effectively connected

with a trade or business carried on through a permanent

establishment in one of the Contracting States by an enterprise


(ii) rent;

(iii) remuneration or other income for personal (including

professional) services;

(iv) profits from the operation of ships or aircraft;

(v) payments to the extent to which they are received as

consideration for the use of, or the right to use, motion picture

films, literary, dramatic, musical or artistic copyrights, films or

video tapes for use in connection with television or tapes for use

in connection with radio broadcasting; or

(vi) payments to the extent to which they are received as

consideration for the supply of scientific, technical, industrial or

commercial knowledge, information or assistance (other than

those payments which come within the meaning of “royalties”

for the purposes of Article 10);

(l) the term “resident in Singapore” has the meaning which it has under the

laws of Singapore relating to Singapore tax; and the term “resident of

Australia” has the meaning which it has under the laws of the

Commonwealth relating to Australian tax;

(m) the term “tax” means Australian tax or Singapore tax, as the context

requires;

(n) words in singular include the plural and words in the plural include the

singular.

2. The terms “Australian tax” and “Singapore tax” do not include any

amount which represents a penalty or interest imposed under the law in force in

Australia or Singapore relating to the taxes to which this Agreement applies.

3. Where under this Agreement income is relieved from tax in one of the

Contracting States and, under the law in force in the other Contracting State, a

person, in respect of the said income, is subject to tax by reference to the

amount thereof which is remitted to or received in that other Contracting State

and not by reference to the full amount thereof, then the relief to be allowed

under this Agreement in the first--mentioned Contracting State shall apply only

to so much of the income as is remitted to or received in the other Contracting

State.





4. Unless the context otherwise requires, any term of this Agreement not

otherwise defined shall have, in a Contracting State, the meaning which it has

under the laws in that Contracting State relating to the taxes to which this

Agreement applies.

ARTICLE 3

1. For the purposes of this Agreement—

(a) the term Australian company means any company which being a

resident of Australia—

(i) is incorporated in Australia and has its centre of administrative

or practical management in Australia whether or not any person

outside Australia exercises or is capable of exercising any

overriding control or direction of the company or of its policy

or affairs in any way whatsoever; or

(ii) is managed and controlled in Australia;

(b) the term Singapore company means any company which is managed

and controlled in Singapore and which is not an Australian company;

(c) the term Singapore resident means any Singapore company and any

person (other than a company) who is resident in Singapore; and

(d) the term Australian resident means any Australian company and any

other person (other than a Singapore company) who is a resident of

Australia.

2. Where by reason of the provisions of paragraph 1 of this Article an

individual is both a Singapore resident and an Australian resident—

(a) he shall be treated solely as a Singapore resident—

(i) if he has a permanent home available to him in Singapore and

has not a permanent home available to him in Australia;

(ii) if sub--paragraph (a) (i) of this paragraph is not applicable but

he has an habitual abode in Singapore and has not an habitual

abode in Australia;

(iii) if neither sub--paragraph (a) (i) nor sub--paragraph (a) (ii) of

this paragraph is applicable but the Contracting State with

which his personal and economic relations are closest is

Singapore;

(b) he shall be treated solely as an Australian resident—

(i) if he has a permanent home available to him in Australia and

has not a permanent home available to him in Singapore;





(ii) if sub--paragraph (b) (i) of this paragraph is not applicable but

he has an habitual abode in Australia and has not an habitual

abode in Singapore;

(iii) if neither sub--paragraph (b) (i) nor sub--paragraph (b) (ii) of

this paragraph is applicable but the Contracting State with

which his personal and economic relations are closest is

Australia.

3. Where by reason of the provisions of paragraph 1 of this Article a

person other than an individual is both a Singapore resident and an Australian

resident—

(a) it shall be treated solely as a Singapore resident if it is managed and

controlled in Singapore;

(b) it shall be treated solely as an Australian resident if it is managed and

controlled in Australia.

4. In this Agreement the term “resident of one of the Contracting States”

and the term “resident of the other Contracting State” mean a person who is a

Singapore resident or a person who is an Australian resident as the context

requires.

5. In this Agreement, the term “Singapore enterprise” and the term

“Australian enterprise” mean an industrial or commercial enterprise (including a

mining, agricultural, pastoral, forestry or plantation enterprise) carried on by a

Singapore resident or by an Australian resident respectively, and the term

“enterprise of one of the Contracting States” and the term “enterprise of the

other Contracting State” mean an Australian enterprise or a Singapore

enterprise, as the context requires.

ARTICLE 4

1. For the purposes of this Agreement the term “permanent establishment”

in relation to an enterprise means a fixed place of trade or business in which the

trade or business of the enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes—

(a) a management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;






(g) an agricultural, pastoral, forestry or plantation property;

(h) a building site or a construction, installation or assembly project which

exists for more than six months.

3. The term “permanent establishment” shall not be deemed to include—







(d) the maintenance of a fixed place of trade or business solely for the

purpose of purchasing goods or merchandise, or for collecting

information, for the enterprise; or

(e) the maintenance of a fixed place of trade or business solely for the

purpose of activities which have a preparatory or auxiliary character for

the enterprise, such as advertising or scientific research.

4. An enterprise of one of the Contracting States shall be deemed to have a

permanent establishment in the other Contracting State and to carry on trade or

business through that permanent establishment if—

(a) it carries on supervisory activities in that other Contracting State for

more than six months in connection with a building site, or a

construction, installation or assembly project which is being

undertaken, in that other Contracting State; or

(b) substantial equipment is in that other Contracting State being used or

installed by, for or under contract with the enterprise.

5. A person acting in one of the Contracting States on behalf of an

enterprise of the other Contracting State (other than an agent of independent

status to whom paragraph 6 of this Article applies) shall be deemed to be a

permanent establishment of that enterprise in the first--mentioned Contracting

State—

(a) if he has, and habitually exercises in that first--mentioned Contracting

State, an authority to conclude contracts on behalf of the enterprise and

his activities are not limited solely to the purchase of goods or

merchandise for the enterprise;

(b) if there is maintained in that first--mentioned Contracting State a stock

of goods or merchandise belonging to the enterprise from which he

habitually fills orders on behalf of the enterprise; or





(c) if in so acting he manufactures or processes in that first--mentioned

Contracting State any goods for the enterprise.

6. An enterprise of one of the Contracting States shall not be deemed to


carries on trade or business in that other Contracting State through a broker, a

general commission agent or any other agent of independent status, where such

a person is acting in the ordinary course of his business as a broker, a general

commission agent or other agent of independent status.

7. The fact that a company which is a resident of one of the Contracting


Contracting State, or which carries on trade or business in that other Contracting

State (whether through a permanent establishment or otherwise), shall not of

itself constitute either company a permanent establishment of the other.

8. Where an enterprise of one of the Contracting States sells goods

manufactured, assembled, processed, packed or distributed in the other

Contracting State by an industrial or commercial enterprise for, or at, or to the

order of, that first--mentioned enterprise and—

(a) either enterprise participates directly or indirectly in the management,

control or capital of the other enterprise; or


control or capital of both enterprises,

then, for the purposes of this Agreement that first--mentioned enterprise shall be

deemed to have a permanent establishment in the other Contracting State and to

carry on trade or business in the other Contracting State through that permanent

establishment

ARTICLE 5

1. Profits of an Australian enterprise shall not be subject to Singapore tax

unless the enterprise carries on trade or business in Singapore through a

permanent establishment in Singapore. If it carries on trade or business as

aforesaid, Singapore tax may be imposed on those profits but only on so much

of them as is attributable to that permanent establishment.

2. Profits of a Singapore enterprise shall not be subject to Australian tax

unless the enterprise carries on trade or business in Australia through a

permanent establishment in Australia. If it carries on trade or business as

aforesaid, Australian tax may be imposed on those profits but only on so much

of them as is attributable to that permanent establishment.





3. Where an enterprise of one of the Contracting States carries on trade or

business in the other Contracting State through a permanent establishment

situated therein, there shall be attributed to that permanent establishment the

profits which it might be expected to make in that other Contracting State if it

were a distinct and separate enterprise engaged in the same or similar activities

and dealing wholly independently with the enterprise of which it is a permanent

establishment or with an independent enterprise; and the profits so attributed

shall be deemed to be income derived from sources in that other Contracting

State and shall be taxed accordingly.

4. In determining the profits attributable to a permanent establishment in

one of the Contracting States, there shall be allowed as deductions all expenses

of the enterprise, including executive and general administrative expenses,

which would be deductible if the permanent establishment were an independent

enterprise and which are reasonably allocable to the permanent establishment,

whether incurred in the Contracting State in which the permanent establishment

is situated or elsewhere, but where goods manufactured out of that Contracting

State by the enterprise are imported into that Contracting State, and the goods

are, either before or after importation, sold in that Contracting State by the

enterprise, the profits of the enterprise taxable in that Contracting State may be

determined by deducting from the sale price of the goods the amount for which,

at the date the goods were shipped to that Contracting State, goods of the same

nature and quality could be purchased by a wholesale buyer in the country of

manufacture, and the expenses incurred in transporting them to and selling them

in that Contracting State.

5. If the information available to the competent authority of the

Contracting State concerned is inadequate to determine the profits to be

attributed to the permanent establishment, nothing in this Article shall affect the

application of any law of that Contracting State in relation to the liability of the

enterprise to pay tax, in respect of the permanent establishment, on an amount

determined by the exercise of a discretion or the making of an estimate by the

competent authority of that Contracting State. Provided that the discretion shall

be exercised or the estimate shall be made, so far as the information available to

the competent authority permits, in accordance with the principles stated in this

Article.

6. Profits shall not be attributed to a permanent establishment by reason of

the mere purchase or mere purchase and transportation by that permanent

establishment of goods or merchandise for the enterprise.

7. Nothing in this Article shall apply to either Contracting State to prevent

the operation in the Contracting State of any provisions of its law relating





specifically to the taxation of any person who carries on a business of any form

of insurance or to the taxation of a non--resident who derives income under any

contract or agreement with any person in relation to the carrying on in the

Contracting State by that person of any form of film business controlled abroad.

Provided that if the law in force in either Contracting State at the date of

signature of this Agreement relating to the taxation of such persons is varied

(otherwise than in minor respects so as not to affect its general character), the

Contracting Governments shall consult with each other with a view to agreeing

to such amendment of this paragraph as may be necessary.

ARTICLE 6

1. Where—







and, in either case, conditions are operative between the two enterprises in their


expected to operate between distinct and separate enterprises dealing wholly

independently with one another, then, if by reason of those circumstances

profits which might be expected to accrue to one of the enterprises do not

accrue to that enterprise, there may be included in the profits of that enterprise

the profits which might have been expected so to accrue to it if it were a distinct

and separate enterprise engaged in the same or similar activities and its dealings

with the other enterprise were dealings wholly independently with that

enterprise or an independent enterprise.

2. Profits included in the profits of an enterprise of one of the Contracting

States under paragraph 1 of this Article shall be deemed to be income of that

enterprise derived from sources in that Contracting State and shall be taxed

accordingly.

3. If the information available to the competent authority of a Contracting

State is inadequate to determine, for the purposes of paragraph 1 of this Article,

the profits which might have been expected to accrue to an enterprise, nothing

in this Article shall affect the application of any law of that Contracting State in

relation to the liability of that enterprise to pay tax on an amount determined by

the exercise of a discretion or the making of an estimate by the competent





authority of that Contracting State. Provided that the discretion shall be

exercised or the estimate shall be made, so far as the information available to

the competent authority permits, in accordance with the principles stated in this

Article.

ARTICLE 7

1. The tax payable in a Contracting State by a resident of the other

Contracting State in respect of profits from the operation of ships, other than

profits from voyages or operations of ships confined solely to places in the

first--mentioned Contracting State, shall not exceed half the amount which

would be payable in respect of those profits but for this paragraph.

2. A resident of one of the Contracting States shall be exempt from tax in

the other Contracting State on profits from the operation of aircraft, other than

profits from flights of aircraft confined solely to places in the other Contracting

State.

3. The relief provided in paragraphs 1 and 2 of this Article shall apply in

relation to the share of the profits from the operation of ships or aircraft derived

by a resident of one of the Contracting States through participation in a pool

service, in a joint transport operating organisation or in an international

operating agency but only to the extent to which the share of the profits is not

attributable to profits from voyages, flights or operations confined solely to

places in the other Contracting State.

4. For the purpose of this Article profits derived from the carriage of

passengers, livestock, mails or goods shipped in one of the Contracting States

for discharge at another place in that Contracting State or, in the case of

Australia, at a place in the Territory of Papua or the Trust Territory of New

Guinea are profits from a voyage or flight of a ship or aircraft confined solely to

places in that Contracting State.

ARTICLE 8

1. The Australian tax on dividends, being dividends paid by a company

which is a resident of Australia, derived by a Singapore resident who is

beneficially entitled to the dividends, shall not exceed 15 per centum of the

gross amount of the dividends.

2. Subject to the provisions of this Article dividends paid by a company

which is resident in Singapore, and dividends paid by a Malaysian company out

of profits derived from sources in Singapore, being dividends derived by an

Australian resident who is beneficially entitled to the dividends, shall be exempt





from any tax in Singapore which may be chargeable on dividends in addition to

the tax chargeable in respect of the profits of the company.

3. Nothing in the preceding paragraph shall affect the provisions of

Singapore law under which the tax in respect of a dividend paid by a company

which is resident in Singapore, or by a Malaysian company out of profits

derived from sources in Singapore, from which Singapore tax has been, or has

been deemed to be, deducted may be adjusted by reference to the rate of tax

appropriate to the Singapore year of assessment immediately following that in

which the dividend was paid.

4. If Singapore, subsequent to the signing of this Agreement, imposes a

tax on dividends paid by a company which is resident in Singapore or by a

Malaysian company out of profits derived from sources in Singapore, which is

in addition to the tax chargeable in respect of the profits of the company, such

tax may be charged but the tax so charged on such dividends derived by an

Australian resident who is beneficially entitled to the dividends shall not exceed

15 per centum of the gross amount of the dividends.

5. Paragraphs 1, 2 and 4 of this Article shall not apply if the resident of

one of the Contracting States who is beneficially entitled to the dividends has in

the other Contracting State a permanent establishment and the holding giving

rise to the dividends is effectively connected with a trade or business carried on

through that permanent establishment.

6. Dividends paid by a company which is a resident of one of the

Contracting States, being dividends derived by a person who is beneficially

entitled to the dividends and who is not a resident of the other Contracting State,

shall be exempt from tax in that other Contracting State. This paragraph shall

not apply in relation to a Singapore company which is also a resident of

Australia or any Australian company which is also resident in Singapore.

ARTICLE 9

1. The Australian tax on interest derived by a Singapore resident who is

beneficially entitled to the interest shall not exceed 10 per centum of the gross

amount of the interest.

2. The Singapore tax on interest derived by an Australian resident who is

beneficially entitled to the interest shall not exceed 10 per centum of the gross

amount of the interest.

3. Paragraphs 1 and 2 of this Article shall not apply if the resident of one

of the Contracting States who is beneficially entitled to the interest has in the

other Contracting State a permanent establishment and the indebtedness giving





rise to the interest is effectively connected with a trade or business carried on

through that permanent establishment.

4. Where, owing to a special relationship between the payer and the


other person, the amount of the interest paid exceeds the amount which might

have been expected to have been agreed upon in the absence of such


last--mentioned amount.

5. In this Article the term “interest” means interest, and amounts in the

nature of interest, on bonds, securities, debentures or on any other form of

indebtedness.

ARTICLE 10

1. The Australian tax on royalties derived by a Singapore resident who is

beneficially entitled to the royalties shall not exceed 10 per centum of the gross

amount of the royalties.

2. The Singapore tax on royalties derived by an Australian resident who is

beneficially entitled to the royalties shall not exceed 10 per centum of the gross


3. In this Article royalties means payments of any kind to the extent to

which they are received as consideration for—

(a) the use of, or the right to use, any—

(i) copyright (other than a literary, dramatic, musical or artistic

copyright), patent, design or model, plan, secret formula or

process, trademark, or other like property or right; or

(ii) industrial, commercial or scientific equipment; or

(b) the supply of information concerning industrial, commercial or

scientific experience,

but does not include royalties or other payments in respect of the operation of

mines or quarries or of the exploitation of natural resources or payments to the

extent to which they are received as consideration for the use of, or the right to

use, motion picture films, tapes for use in connection with radio broadcasting or

films or video tapes for use in connection with television.

4. Paragraphs 1 and 2 of this Article shall not apply if the resident of one

of the Contracting States who is beneficially entitled to the royalties has in the

other Contracting State a permanent establishment and the information, right or

property giving rise to the royalties is effectively connected with a trade or

business carried on through that permanent establishment.





5. Where, owing to a special relationship between the payer and the

person who is beneficially entitled to the royalties or between both of them and

some other person, the amount of the royalties paid exceeds the amount which

might have been expected to have been agreed upon in the absence of such


last--mentioned amount.

ARTICLE 11

1. Subject to this Article and to Articles 12, 13 and 14 remuneration or

other income derived by an individual who is a resident of one of the

Contracting States in respect of personal (including professional) services shall

be subject to tax only in that Contracting State unless the services are performed

or exercised in the other Contracting State. If the services are so performed or

exercised such remuneration or other income as is derived therefrom shall be

deemed to have a source in, and may be taxed in, that other Contracting State.

2. In relation to remuneration of a director of a company derived from the

company, the provisions of this Article and of Article 12 shall apply as if the

remuneration were remuneration in respect of personal services. Director’s fees

and similar payments derived by a resident of one of the Contracting States in

his capacity as a member of the board of directors of a company which is a

resident of the other Contracting State shall be deemed to be derived in respect

of personal services performed in, and may be taxed in, that other Contracting

State.

3. An individual who is a resident of one of the Contracting States shall be

exempt from tax in the other Contracting State on remuneration from an

employment exercised on ships or aircraft in international traffic.

ARTICLE 12

1. Remuneration or other income derived by an individual who is a

resident of one of the Contracting States in respect of personal (including

professional) services performed or exercised in the other Contracting State

shall be exempt from tax in the other Contracting State if—

(a) the recipient is present in the other Contracting State for a period or

periods not exceeding in the aggregate 183 days in the year of income

or in the basis period for the year of assessment as the case may be of

that other Contracting State;

(b) the services are performed or exercised for or on behalf of a person who

is a resident of the first--mentioned Contracting State; and





(c) the remuneration or other income is not deductible in determining the

profits for tax purposes in the other Contracting State of a permanent

establishment in that other Contracting State of that person.

2. Paragraph 1 of this Article shall not apply to remuneration or other

income derived by public entertainers (such as stage, motion picture, radio or

television artistes, musicians and athletes) from their personal activities as such.

3. Notwithstanding anything contained in this Agreement, where an

enterprise of one of the Contracting States derives profits arising from, or in

relation to, contracts or obligations to provide in the other Contracting State

services of public entertainers referred to in paragraph 2 of this Article, the

profits may be taxed in the other Contracting State and shall be deemed to have

a source in that other Contracting State, except where the enterprise is, in

connection with the provisions of these services, substantially supported from

the public funds of a Government of the first--mentioned Contracting State, in

which case the profits shall be exempt from tax in the other Contracting State.

4. For the purposes of paragraph 3 of this Article, “a Government of the

first--mentioned Contracting State” means, in the case of Singapore, the

Government of Singapore and, in the case of Australia, the Government of the

Commonwealth or of any State of the Commonwealth.

ARTICLE 13

1. A pension or an annuity, derived from sources within one of the

Contracting States by an individual who is a resident of the other Contracting

State, shall be exempt from tax in the first--mentioned Contracting State.

2. The term “annuity” means a stated sum payable periodically at stated

times, during life or during a specified or ascertainable period of time, under an



3. This Article shall not apply to a pension paid to an individual by the

Government of the Commonwealth or of any State of the Commonwealth or the

Government of Singapore in respect of services rendered in the discharge of

governmental functions.

ARTICLE 14

1. Remuneration (other than pensions) paid by the Government of the

Commonwealth or of any State of the Commonwealth to any individual for

services rendered to that Government in the discharge of governmental





functions shall be exempt from Singapore tax, except where the individual is

resident in Singapore and is not an Australian citizen.

2. Remuneration (other than pensions) paid by the Government of

Singapore to any individual for services rendered to that Government in the

discharge of governmental functions shall be exempt from Australian tax,

except where the individual is a resident of Australia and is not a Singapore

resident.

3. This Article shall not apply to any remuneration in respect of services

rendered in connection with any trade or business carried on by a Government

for purposes of profit.

ARTICLE 15

A student or trainee who is, or was immediately before visiting one of the

Contracting States, a resident of the other Contracting State and is present in the

first--mentioned Contracting State solely for the purpose of his education or

training shall not be taxed in that first--mentioned Contracting State on

payments which he receives for the purpose of his maintenance, education or

training provided that such payments are made to him from outside that

first--mentioned Contracting State.

ARTICLE 16

1. This Article shall apply to a person who is a resident of Australia and is

also resident in Singapore.

2. Where such a person is treated for the purposes of this Agreement

solely as a resident of one of the Contracting States he shall be exempt in the

other Contracting State from tax on any income in respect of which he is subject

to tax in the first--mentioned Contracting State if the income is derived—

(a) from sources in the first--mentioned Contracting State; or

(b) from sources outside both Contracting States.

ARTICLE 17

1. For the purposes of this Agreement—

(a) (i) dividends paid by a company which is a resident of Australia

shall be treated in Singapore as income from sources in

Australia;

(ii) dividends paid by a company which is resident in Singapore

shall be treated in Australia as income from sources in

Singapore;





(b) dividends paid by a Malaysian company out of profits derived from

sources in Singapore shall be treated in Australia as income from

sources in Singapore;

(c) profits derived by a resident of one of the Contracting States from the

carriage by ships or aircraft of passengers, livestock, mails or goods

shipped in the other Contracting State, or from the operations of ships

or aircraft in that other Contracting State, shall be treated as having a

source in that other Contracting State;

(d) an amount which is included, for the purposes of tax in one of the

Contracting States, in the taxable or chargeable income of a person who

is a resident of the other Contracting State, and which is so included

under any provision of the law of the first--mentioned Contracting State

for the time being in force regarding taxation of income of a business of

any form of insurance or of income derived under a contract or

agreement with a person who carries on in the first--mentioned

Contracting State any form of film business controlled abroad shall be

treated as having a source in that first--mentioned Contracting State;

(e) pensions paid by the Government of the Commonwealth or of any State

of the Commonwealth, or the Government of Singapore, in respect of

services rendered in the discharge of governmental functions shall be

treated as having a source in Australia or Singapore respectively.

2. Interest (as defined in Article 9) derived by a resident of one of the

Contracting States shall be treated as having a source in the other Contracting

State where the amount—

(i) is paid by a Government of the other Contracting State or by a resident

of the other Contracting State and is not incurred by the payer in

carrying on a trade or business through a permanent establishment of

the payer in a country outside the other Contracting State; or

(ii) is paid by a person who is not a resident of the other Contracting State

and is incurred by the payer in carrying on trade or business through a

permanent establishment of the payer in the other Contracting State.

3. For the purposes of paragraph 2 of this Article “a Government of the

other Contracting State” means, in relation to Singapore, the Government of

Singapore or an authority of Singapore and, in relation to Australia, means the

Government of the Commonwealth or of a State of the Commonwealth or an

authority of the Commonwealth or of such a State.

4. Royalties (as defined in Article 10) and payments referred to in

subparagraph (k) (v) and subparagraph (k) (vi) of paragraph 1 of Article 2 shall





be treated as derived from sources within the Contracting State in which the

knowledge, assistance, information, right or property giving rise to the royalties

or payments is used.

5. Royalties in respect of the operation of mines, quarries or other places

of extraction of natural resources shall be treated as derived from sources within

the Contracting State in which such mines, quarries or other places of natural

resources are situated.

ARTICLE 18

1. Subject to any provisions of the law of the Commonwealth which may

from time to time be in force and which relate to the allowance of a credit

against Australian tax of tax paid in a country outside Australia (which shall not

affect the general principle hereof), Singapore tax paid, whether directly or by

deduction, in respect of income derived by a resident of Australia from sources

within Singapore (excluding in the case of a dividend, tax paid in respect of the



2. A company that is a resident of Australia and which beneficially owns

at least 10 per centum of the paid--up share capital in a company that is resident

in Singapore shall, in accordance with those provisions in the taxation law of

the Commonwealth in existence at the date of signature of this Agreement, be

entitled to a rebate in its assessment at the average rate of tax payable by the

company in respect of dividends paid by the second--mentioned company that

are included in its taxable income.

3. For the purposes of paragraph 1 of this Article and of the income tax

law of the Commonwealth—

(a) a resident of Australia deriving income from sources in Singapore

consisting of interest or royalties to which Article 9 or Article 10

applies, being income in respect of which an exemption from or

reduction of tax has been granted under Parts V and VI of the Economic

Expansion Incentives (Relief from Income Tax) Act, 1967, of

Singapore or any other provisions which may subsequently be enacted

granting an exemption from or reduction of tax which are agreed by the

Contracting Governments in Notes exchanged for these purposes to be

of a substantially similar character, shall be deemed to have paid

Singapore tax in an amount, or the Singapore tax paid shall be deemed

to have been increased by an amount, equal to the amount by which the





Singapore tax that otherwise would have been payable is reduced by the

exemption or reduction granted; and

(b) the amount of the said interest or royalties shall be deemed to be the

amount that would have been the amount of the interest or royalties if

no Singapore tax had been paid, increased by the amount by which the

tax that otherwise would have been payable is reduced by the said

exemption or reduction.

4. Paragraph 3 of this Article shall not apply in relation to income derived

in any year of income after the year of income that ends on 30th June, 1974 or

on any later date that may be agreed by the Contracting Governments in Notes

exchanged for this purpose.

5. Subject to the provisions of the laws of Singapore regarding the

allowance as a credit against Singapore tax of tax payable in any country other

than Singapore, Australian tax payable, whether directly or by deduction, in

respect of income from sources within Australia shall be allowed as a credit

against Singapore tax payable in respect of that income. Where such income is a

dividend paid by a company which is an Australian resident to a company

which is a Singapore resident and which owns directly or indirectly not less

than 10 per centum of the paid--up share capital in the first--mentioned

company the credit shall take into account (in addition to any Australian tax on

dividends) the Australian tax paid by the first--mentioned company in respect of

its profits.

6. Where profits, on which an enterprise of one of the Contracting States

has been charged to tax in that Contracting State, are also included, by virtue of

this Agreement, in the profits of an enterprise of the other Contracting State as

being profits which, because of the circumstances existing between the two

enterprises, might have been expected to accrue to the enterprise of the other

Contracting State, the profits so included shall be treated for the purposes of this

Article as profits of the enterprise of the first--mentioned Contracting State from

a source in the other Contracting State and relief shall be given in accordance

with this Article in respect of the extra tax chargeable in the other Contracting

State as a result of the inclusion of such profits.

ARTICLE 19

1. The competent authorities shall exchange such information (being

information which is at their disposal under their respective taxation laws in the

normal course of administration) as is necessary for carrying out the provisions

of this Agreement or for the prevention of fraud or for the administration of





statutory provisions against legal avoidance in relation to the taxes which are

the subject of this Agreement.

2. Any information so exchanged shall be treated as secret but may be

disclosed to persons (including a court or tribunal) concerned with the

assessment, collection, enforcement or prosecution in respect of the taxes which

are the subject of this Agreement.

3. No information as aforesaid shall be exchanged which would disclose

any trade, business, industrial or professional secret or trade process.

ARTICLE 20

1. Where a taxpayer considers that the action of the competent authority in

one of the Contracting States has resulted, or is likely to result, in double

taxation contrary to the provisions of this Agreement, he shall be entitled to

present the facts to the competent authority in the Contracting State of which he

is a resident and, should the taxpayer’s claim be deemed worthy of

consideration, the competent authority in that Contracting State shall endeavour

to come to an agreement with the competent authority in the other Contracting

State with a view to the avoidance of the double taxation in question.

2. The competent authority in a Contracting State may communicate

directly with the competent authority in the other Contracting State for the

purpose of giving effect to the provisions of this Agreement and in an

endeavour to assure its consistent interpretation and application. In particular,

the competent authorities may consult together to endeavour to resolve disputes

arising out of the application of paragraph 3 of Article 5 or Article 6.

ARTICLE 21

This Agreement shall come into force on the date on which the last of all

such things shall have been done in Australia and Singapore as are necessary to

give the Agreement the force of law in Australia and Singapore so far as its

provisions affect Australian tax and Singapore tax respectively and shall

thereupon have effect—

(a) in Australia—


non--resident, in respect of income derived on or after 1st July,

1969;


beginning on or after 1st July, 1969;





(b) in Singapore—

for any year of assessment beginning on or after 1st January, 1970.

ARTICLE 22

This Agreement shall continue in effect indefinitely, but either Contracting

State may, on or before 30th June in any calendar year give to the other

Contracting State notice of termination and, in that event, this Agreement shall

cease to be effective—

(a) in Australia—


non--resident, in respect of income derived on or after the

commencement of the financial year beginning on 1st July in

the calendar year next following that in which the notice is

given;


beginning on or after 1st July in the calendar year next

following that in which the notice is given;

(b) in Singapore—

for any year of assessment beginning on or after 1st January in the

second calendar year next following that in which the notice is given.


signed this Agreement.

DONE in duplicate at Canberra this Eleventh day of February in the year one

thousand nine hundred and sixty--nine in the English language:

William McMahon S. T. Stewart

FOR THE GOVERNMENT

OF THE

COMMONWEALTH OF AUSTRALIA

FOR THE GOVERNMENT

OF THE

REPUBLIC OF SINGAPORE

Protocol amending the Agreement between the Government of the Commonwealth of

Australia and the Government of the Republic of Singapore for the Avoidance of

Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income

Schedule 5A


Schedule 5A—Protocol amending the

Agreement between the Government

of the Commonwealth of Australia

and the Government of the Republic

of Singapore for the Avoidance of



on Income Section 3

The Government of Australia and the Government of the Republic of

Singapore,

Desiring to amend the Agreement between the Government of the

Commonwealth of Australia and the Government of the Republic of Singapore

for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income signed at Canberra on 11 February 1969 (in this

Protocol referred to as “the Agreement”),


ARTICLE 1

The following Article is inserted before Article 1 of the Agreement:

“ARTICLE 1A

This Agreement shall apply to persons who are residents of one or both of

the Contracting States.”.

Schedule 5A Protocol amending the Agreement between the Government of the

Commonwealth of Australia and the Government of the Republic of Singapore for the

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to

Taxes on Income


ARTICLE 2

Article 1 of the Agreement is amended by omitting subparagraph (1) (a) and

substituting:

“(a) in Australia: the income tax, and the petroleum resource rent tax in

respect of offshore projects, imposed under the federal law of the

Commonwealth of Australia;”.

ARTICLE 3

Article 2 of the Agreement is amended by inserting in paragraph (4) “from

time to time in force” after “that Contracting State”.

ARTICLE 4

Article 4 of the Agreement is omitted and the following Article is

substituted:

“ARTICLE 4

(1) For the purposes of this Agreement, the term permanent establishment, in

relation to an enterprise, means a fixed place of business through which the

business of the enterprise is wholly or partly carried on.

(2) The term “permanent establishment” includes but is not limited to—


(b) a branch;

(c) an office;

(d) a store or other sales outlet;

(e) a factory;

(f) a workshop;

(g) a warehouse except where it is used solely for any of the purposes

mentioned in paragraph (4);

(h) a mine, an oil or gas well, a quarry or any other place of extraction of


(i) a building site, or a construction, installation or assembly project, but

only where such site or project or any combination of them continues

for a period aggregating more than 6 months within any 12--month

period.




Schedule 5A


(3) An enterprise of a Contracting State shall be deemed to have a permanent

establishment and to carry on trade or business through that permanent

establishment in the other Contracting State if—

(a) it carries on supervisory activities in that other State for a period or

periods aggregating more than 6 months within any 12--month period in

connection with a building site, or a construction, installation or

assembly project or any combination of them which is being undertaken

in that other State; or

(b) substantial equipment is being used in that other State by, for or under

contract with the enterprise.



(a) the use of facilities solely for the purpose of storage or display of goods

or merchandise belonging to the enterprise;


enterprise solely for the purpose of storage or display;




purchasing goods or merchandise or of collecting information, for the

enterprise;



enterprise, such as advertising, the supply of information or scientific

research.

(5) A person acting in one of the Contracting States on behalf of an enterprise

of the other Contracting State, other than an agent of an independent status to

whom paragraph (6) applies, shall be deemed to be a permanent establishment

of the enterprise in the first--mentioned Contracting State if—

(a) the person has, and habitually exercises in the first--mentioned

Contracting State, an authority to conclude contracts for or on behalf of

the enterprise unless the exercise of such authority is limited to the

purchase of goods or merchandise for that enterprise; or

(b) there is maintained in the first--mentioned Contracting State a stock of

goods or merchandise belonging to the enterprise from which he or she

regularly fills orders on behalf of the enterprise; or




Taxes on Income


(c) the person habitually secures orders in the first--mentioned Contracting

State wholly or principally for the enterprise itself or for any other

enterprise which is controlled by it or has a controlling interest in it; or

(d) in so acting the person manufactures or processes in that State for the

enterprise goods or merchandise belonging to the enterprise.


a permanent establishment in the other Contracting State merely because that

enterprise carries on business in that other State through a broker, general

commission agent, or any other agent of an independent status, where such

broker or agent is acting in the ordinary course of that person’s business.





either company a permanent establishment of the other.”.

ARTICLE 5

The following Article is inserted after Article 4 of the Agreement:

“ARTICLE 4A

(1) Income from real property may be taxed in the Contracting State in which

the real property is situated.

(2) In this Article, the term real property, in relation to one of the Contracting

States, has the meaning which it has under the laws of that State and also

includes—

(a) a lease of land and any other interest in or over land whether improved

or not, including a right to explore for or exploit mineral, oil or gas

deposits or other natural resources; and

(b) a right to receive variable or fixed payments either as consideration for

the exploitation of or the right to explore for or exploit, or in respect of

the exploitation of, mineral, oil or gas deposits, quarries or other places

of extraction or exploitation of natural resources.

(3) Any interest or right referred to in paragraph (2) shall be regarded as



place.




Schedule 5A


(4) The provisions of paragraph (1) and (3) shall also apply to income from

real property of an enterprise and to income from real property used for the

performance of professional services.”.

ARTICLE 6


substituted:

“ARTICLE 5




enterprise carries on business as aforesaid, the profits of the enterprise may be

taxed in the other State but only so much of them as is attributable to that










(3) In the determination of the profits of a permanent establishment, there shall

be allowed as deductions expenses of the enterprise, being expenses which are

incurred for the purposes of the permanent establishment and which would be




(4) No profits shall be attributed to a permanent establishment by reason of the


enterprise.





establishment, provided that that law shall be applied, so far as the information




Taxes on Income



this Article.

(6) Where profits include items of income which are dealt with separately in

other Articles of this Agreement, then the provisions of those Articles shall not

be affected by the provisions of this Article.



non--residents, provided that if the relevant law in force in either Contracting

State at the date of signature of this Agreement is varied (otherwise than in




(8) Where—

(a) a resident of one of the Contracting States is beneficially entitled,

whether directly or through one or more interposed trust estates, to a

share of the business profits of an enterprise carried on in the other

Contracting State by the trustee of a trust estate other than a trust estate

which is treated as a company for tax purposes; and

(b) in relation to that enterprise, that trustee would, in accordance with the

principles of Article 4, have a permanent establishment in that other

State,



therein and that share of business profits shall be attributed to that permanent

establishment.”.

ARTICLE 7


substituted:

“ARTICLE 6

(1) Where—







Schedule 5A


(b) the same person participates directly or indirectly in the management,














attributed to an enterprise, provided that that law shall be applied, so far as it is

practicable to do so, consistently with the principles of this Article.


been charged to tax in that State are also included, by virtue of paragraph (1) or

(2), in the profits of an enterprise of the other Contracting State and charged to

tax in that other State, and the profits so included are profits which might have




independently with one another, then the first--mentioned State shall make an


first--mentioned State. In determining such an adjustment, due regard shall be

had to the other provisions of this Agreement and for this purpose the

competent authorities of the Contracting States shall if necessary consult each

other.”.

ARTICLE 8


substituted:

“ARTICLE 7

(1) Profits from the operation of ships or aircraft derived by a resident of one

of the Contracting States shall be taxable only in that State.




Taxes on Income


(2) Notwithstanding the provisions of paragraph (1), such profits may be taxed

in the other Contracting State where they are profits from operations of ships or

aircraft confined solely to places in that other State.

(3) The provisions of paragraphs (1) and (2) shall apply in relation to the share

of the profits from the operation of ships or aircraft derived by a resident of one

of the Contracting States through participation in a pool service, in a joint


(4) Interest earned on funds held in one of the Contracting States by a resident

of the other Contracting State in connection with the operation of ships or

aircraft, other than operations confined solely to places in the first--mentioned

State, shall be treated as profits from the operation of ships or aircraft.


or aircraft of passengers, livestock, mail, goods or merchandise shipped in one

of the Contracting States for discharge at another place in that Contracting

State, or at one or more structures used in connection with the exploration for or

exploitation of natural resources situated in waters adjacent to the territorial

waters of that Contracting State, shall be treated as profits from operations of

ships or aircraft confined solely to places in that State.”.

ARTICLE 9

Article 8 of the Agreement is amended by adding at the end of

paragraph (5):

“In any such case, the provisions of Article 5 shall apply.”.

ARTICLE 10

Article 9 of the Agreement is amended by:

(a) adding at the end of paragraph (3):

“In any such case, the provisions of Article 5 shall apply.”; and

(b) adding at the end of paragraph (5):

“The term does not include income to which paragraph (4) of Article 7

applies.”.

ARTICLE 11


(a) omitting paragraph (3) and substituting:




Schedule 5A


“(3) In this Article royalties means payments or credits, whether

periodical or not, and however described or computed, to the

extent to which they are received as consideration for—


(i) copyright (other than a literary, dramatic, musical or

artistic copyright), patent, design or model, plan, secret

formula or process, trademark, or other like property or

right; or

(ii) industrial, commercial or scientific equipment;

(b) the supply of scientific, industrial or commercial knowledge or

information; or

(c) total or partial forbearance in respect of the use or supply of any

property or right referred to in this paragraph,

but does not include royalties or other payments in respect of the operation of

mines or quarries or of the exploitation of natural resources or payments to the

extent to which they are received as consideration for the use of, or the right to

use, motion picture films, tapes for use in connection with radio broadcasting or

films or video tapes for use in connection with television.”; and

(b) adding at the end of paragraph (4):

“In any such case, the provisions of Article 5 shall apply.”.

ARTICLE 12


“ARTICLE 10A


the alienation of real property referred to in Article 4A and, as provided in that

Article, situated in the other Contracting State may be taxed in that other State.

(2) Income or gains from the alienation of property, other than real property

referred to in Article 4A, that forms part of the business property of a permanent

establishment which an enterprise of one of the Contracting States has in the

other Contracting State or pertains to a fixed base available to a resident of the

first--mentioned State in that other State for the purpose of performing

independent personal services, including income or gains from the alienation of

such a permanent establishment (alone or with the whole enterprise) or of such

a fixed base, may be taxed in that other State.




Taxes on Income


(3) Income or gains from the alienation of ships or aircraft operated in

international traffic, or of property (other than real property referred to in

Article 4A) pertaining to the operation of those ships or aircraft, shall be taxable

only in the Contracting State of which the enterprise which operated those ships

or aircraft is a resident.


the alienation of shares or comparable interests in a company, the assets of

which consist wholly or principally of real property in the other Contracting

State of a kind referred to in Article 4A and, as provided in that Article, situated

in that other State, may be taxed in that other State.

(5) Nothing in this Agreement affects the application of a law of a Contracting

State relating to the taxation of gains of a capital nature derived from the

alienation of property other than that to which any of paragraphs (1), (2), (3)

and (4) apply.”.

ARTICLE 13


“ARTICLE 16A

Items of income which are not expressly mentioned in the foregoing Articles

of this Agreement shall be taxable according to the laws of the respective

Contracting States relating to tax.”.

ARTICLE 14


substituted:

“ARTICLE 17

Profits, income or gains derived by a resident of one of the Contracting

States which, under any one or more of Article 4A, Article 5, Articles 7 to 14

and Article 16A, may be taxed in the other Contracting State shall for the

purposes of Article 18 and of the laws of the respective Contracting States

relating to tax be deemed to be income from sources in that other State.”.

ARTICLE 15


substituted:




Schedule 5A


“ARTICLE 18

(1) Subject to the provisions of the law of Australia from time to time in force

which relate to the allowance of a credit against Australian tax of tax paid in a

country outside Australia (which shall not affect the general principle hereof),

Singapore tax paid under the law of Singapore and in accordance with this

Agreement, whether directly or by deduction, in respect of income derived by a

person who is a resident of Australia from sources in Singapore shall be allowed

as a credit against Australian tax payable in respect of that income.

(2) Where a company which is a resident of Singapore pays a dividend to a

company which is a resident of Australia and which controls directly or

indirectly not less than 10 per cent of the voting power of the first--mentioned

company, the credit referred to in paragraph (1) shall include the Singapore tax

paid by that first--mentioned company in respect of that portion of its profits out

of which the dividend is paid.

(3) For the purposes of paragraphs (1) and (2), Singapore tax paid shall be

deemed to include an amount equivalent to the amount of Singapore tax which,

under the law of Singapore relating to Singapore tax and in accordance with this

Agreement, would have been payable but for an exemption from or reduction of

Singapore tax granted under—

(a) section 13 (2) of the Income Tax Act 1985 of Singapore;

(b) Parts II, IIIA, IV, VI, VII, VIII, IX, X or XI of the Economic Expansion

Incentives (Relief from Income Tax) Act 1988 of Singapore; and

(c) Parts III, V, VIA or XII of the Economic Expansion Incentives (Relief

from Income Tax) Act 1988 of Singapore except where the exemption

or reduction is granted in respect of income attributable to the provision

of financial (including insurance) services provided directly or

indirectly to a person who is a resident of Australia,

insofar as those provisions were in force on, and have not been modified since,

the date of signature of the Protocol which first amended the Agreement

between the Government of the Commonwealth of Australia and the

Government of the Republic of Singapore for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income signed in

Canberra on 11 February 1969, or have been modified only in minor respects so

as not to affect their general character or any other provision which may

subsequently be made granting an exemption from or reduction of tax which the

Treasurer of Australia and the Minister for Finance of Singapore, or their

authorised representatives, agree from time to time in letters exchanged for this




Taxes on Income


purpose to be of a substantially similar character, if that provision has not been

modified thereafter or has been modified only in minor respects so as not to

affect its general character.

(4) The provisions of paragraph (3) shall apply only in relation to income

derived in any of the 10 years of income beginning with the year of income that

commenced on 1 July 1987 and in any later year of income that may be agreed

in an exchange of letters for this purpose by the Treasurer of Australia and the

Minister for Finance of Singapore, or their authorised representatives.

(5) Subject to the provisions of the laws of Singapore regarding the allowance

as a credit against Singapore tax of tax payable in any country other than

Singapore, Australian tax payable, whether directly or by deduction, in respect

of income from sources within Australia shall be allowed as a credit against

Singapore tax payable in respect of that income. Where such income is a

dividend paid by a company which is a resident of Australia to a company

which is a resident of Singapore and which owns directly or indirectly not less

than 10 per cent of the voting power of the first--mentioned company, the credit

shall take into account the Australian tax paid by the first--mentioned company

in respect of that portion of its profits out of which the dividend is paid.”.

ARTICLE 16

Article 20 of the Agreement is amended by omitting (3) from paragraph (2)

and substituting (2).

ARTICLE 17

(1) This Protocol, which shall form an integral part of the Agreement, shall

enter into force on the date on which the Contracting Governments exchange

notes through the diplomatic channel notifying each other that the last of such

things has been done as is necessary to give this Protocol the force of law in

Australia and in Singapore respectively, and thereupon this Protocol shall,

subject to paragraph (2), have effect:

(a) in Australia:

(i) in the case of interest to which Article 8 and paragraph (b) of

Article 10 of the Protocol apply, in respect of tax on income of

any year of income beginning on or after 1 July 1983; and

(ii) in any other case, in respect of tax on income of any year of

income beginning on or after 1 July 1987;




Schedule 5A


(b) in Singapore:

(i) in the case of interest to which Article 8 and paragraph (b) of

Article 10 of the Protocol apply, for any year of assessment

beginning on or after 1 January 1984; and

(ii) in any other case, for any year of assessment beginning on or

after 1 January 1988.

(2) Where any provision of the Agreement that is affected by this Protocol

would have afforded any greater relief from tax than is afforded by the

amendments made by this Protocol, that provision shall continue to have effect:

(a) in Singapore, for any year of assessment beginning before the date on

which this Protocol enters into force;

(b) in Australia:

(i) in the case of paragraph (2) of Article 18 of the Agreement,

only in respect of dividends paid before 12 March 1988;

(ii) in respect of other income for any year of income beginning

before the date on which this Protocol enters into force.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have

signed this Protocol.

DONE in duplicate at Canberra this sixteenth day of October, one thousand

nine hundred and eighty--nine, in the English language

P. J. KEATING JOSEPH FRANCIS CONCEICAO

For the Government of

Australia

For the Government of the

Republic of Singapore.

NOTE ABOUT RECTIFICATION OF THE SINGAPORE PROTOCOL

1. In an exchange of Notes dated 20 October 1989, the Government of Australia and the Government of the Republic of Singapore agreed to regard the text of the Singapore Protocol as rectified ab initio in respect of format errors in Article 11 and Article 15.

2. These rectifications have been incorporated in the text of the copy of the Protocol that is set out in this Act.

Schedule 6 Convention between Australia and Japan for the avoidance of double

taxation and the prevention of fiscal evasion with respect to taxes on income



and Japan for the avoidance of double

taxation and the prevention of fiscal

evasion with respect to taxes on

income Note: See section 3.

Australia and Japan,

Desiring to conclude a new Convention for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income,


Article 1

PERSONS COVERED

This Convention shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

TAXES COVERED

1. This Convention shall apply to the following existing taxes:

a) in the case of Japan:

(i) the income tax; and

(ii) the corporation tax

Convention between Australia and Japan for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income Schedule 6


(hereinafter referred to as “Japanese tax”);

b) in the case of Australia:


(ii) the petroleum resource rent tax

(hereinafter referred to as “Australian tax”).

2. This Convention shall apply also to any identical or substantially

similar taxes that are imposed by Japan or under the federal law of Australia

after the date of signature of the Convention in addition to, or in place of, the

existing taxes referred to in paragraph 1. The competent authorities of the

Contracting States shall notify each other of any significant changes that have

been made in the law of their respective Contracting States relating to the taxes

to which the Convention applies within a reasonable period of time after such

changes.

Article 3

GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise

requires:

a) the term “Japan”, when used in a geographical sense, means all the

territory of Japan, including its territorial sea, in which the laws

relating to Japanese tax are in force, and all the area beyond its

territorial sea, including the seabed and subsoil thereof, over which

Japan has sovereign rights in accordance with international law and in

which the laws relating to Japanese tax are in force;

b) the term “Australia”, when used in a geographical sense, excludes all

external territories other than:











(including only the Territories specified in this subparagraph) in

respect of which there is for the time being in force, consistently with

international law, a law of Australia dealing with the exploration for

or exploitation of any of the natural resources of the exclusive

economic zone and the seabed and subsoil of the continental shelf;

c) the terms “a Contracting State” and “the other Contracting State”

mean Japan or Australia, as the context requires;

d) the term “tax” means Japanese tax or Australian tax, as the context

requires;

e) the term “person” includes an individual, a company and any other

body of persons;

f) the term “company” means any body corporate or any entity that is


g) the term “enterprise” applies to the carrying on of any business;

h) the terms “enterprise of a Contracting State” and “enterprise of the

other Contracting State” mean respectively an enterprise carried on by

a resident of a Contracting State and an enterprise carried on by a

resident of the other Contracting State;

i) the term “international traffic” means any transport by a ship or

aircraft operated by an enterprise of a Contracting State, except when




the ship or aircraft is operated solely between places in the other

Contracting State;

j) the term “national”, in relation to a Contracting State, means:

(i) any individual possessing the nationality or citizenship of that

Contracting State; and

(ii) any juridical or legal person created or organised under the

law of that Contracting State and any organisation without

juridical or legal personality treated for the purposes of that

Contracting State’s tax as a juridical or legal person created or

organised under the law of that Contracting State;

k) the term “competent authority” means:

(i) in the case of Japan, the Minister of Finance or an authorised

representative of the Minister of Finance; and


authorised representative of the Commissioner of Taxation;

and

l) the term “business” includes the performance of professional services

and of other activities of an independent character.

2. As regards the application of this Convention at any time by a


otherwise requires, have the meaning that it has at that time under the law of

that Contracting State concerning the taxes to which the Convention applies,

any meaning under the applicable tax law of that Contracting State prevailing

over a meaning given to the term under other law of that Contracting State.

Article 4

RESIDENT

1. For the purposes of this Convention, the term “resident of a

Contracting State” means:




a) in the case of Japan, any person who, under the laws of Japan, is liable

to tax therein by reason of the person’s domicile, residence, place of

head or main office, or any other criterion of a similar nature; and

b) in the case of Australia, a person who is a resident of Australia for the

purposes of Australian tax.

The Government of a Contracting State or a political subdivision or local

authority thereof is also a resident of that Contracting State for the purposes of

the Convention. A person is not a resident of a Contracting State for the

purposes of the Convention if the person is liable to tax in that Contracting State

in respect only of income from sources in that Contracting State.

2. Where by reason of the provisions of paragraph 1 an individual is a

resident of both Contracting States, then the individual’s status shall be

determined as follows:

a) the individual shall be deemed to be a resident only of the Contracting

State in which the individual has a permanent home available to that

individual; if that individual has a permanent home available to that

individual in both Contracting States, or in neither of them, that

individual shall be deemed to be a resident only of the Contracting

State with which the individual’s personal and economic relations are

closer (centre of vital interests);

b) if the Contracting State in which the individual’s centre of vital

interests is situated cannot be determined, the individual shall be

deemed to be a resident only of the Contracting State of which that

individual is a national;

c) if the individual is a national of both Contracting States or of neither

of them, the competent authorities of the Contracting States shall

endeavour to resolve the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than

an individual is a resident of both Contracting States, then the competent

authorities of the Contracting States shall endeavour to determine by mutual




agreement the Contracting State of which that person shall be deemed to be a

resident for the purposes of this Convention, having regard to the place of its

head or main office, its place of effective management and any other relevant

factors.

4. In the absence of a mutual agreement under subparagraph c) of

paragraph 2 or paragraph 3 a person who is a resident of both Contracting States

by reason of the provisions of paragraph 1 shall not be considered a resident of

either Contracting State for the purposes of claiming any benefits provided by

this Convention, except those provided by Articles 26 and 27.

5. For the purposes of applying this Convention:

a) an item of income, profits or gains:

(i) derived from a Contracting State through an entity that is

organised in the other Contracting State; and

(ii) treated as the income, profits or gains of the beneficiaries,

members or participants of that entity under the tax law of

that other Contracting State,

shall be eligible for the benefits of the Convention that would be

granted if it were directly derived by a beneficiary, member or

participant of that entity who is a resident of that other Contracting

State, to the extent that such beneficiaries, members or participants

are residents of that other Contracting State and satisfy any other

conditions specified in the Convention, without regard to whether the

income, profits or gains are treated as the income, profits or gains of

such beneficiaries, members or participants under the tax law of the

first-mentioned Contracting State.

b) an item of income, profits or gains:


organised in the other Contracting State; and

(ii) treated as the income, profits or gains of that entity under the

tax law of that other Contracting State,





granted to a resident of that other Contracting State, without regard to

whether the income, profits or gains are treated as the income, profits

or gains of the entity under the tax law of the first-mentioned

Contracting State, if such entity is a resident of that other Contracting

State and satisfies any other conditions specified in the Convention.

c) an item of income, profits or gains:


organised in a state other than the Contracting States; and

(ii) treated as the income, profits or gains of the beneficiaries,

members or participants of that entity under the tax law of the

other Contracting State,


granted if it were directly derived by a beneficiary, member or

participant of that entity who is a resident of that other Contracting

State, to the extent that such beneficiaries, members or participants

are residents of that other Contracting State and satisfy any other

conditions specified in the Convention, without regard to whether the

income, profits or gains are treated as the income, profits or gains of

such beneficiaries, members or participants under the tax law of the

first-mentioned Contracting State or such state.

d) an item of income, profits or gains:


organised in a state other than the Contracting States; and


tax law of the other Contracting State,

shall not be eligible for the benefits of the Convention.

e) an item of income, profits or gains:





organised in that Contracting State; and


tax law of the other Contracting State,

shall not be eligible for the benefits of the Convention.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term “permanent


the enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop;

f) a mine, an oil or gas well, a quarry or any other place of extraction of


g) an agricultural, pastoral or forestry property.

3. A building site or construction or installation project constitutes a

permanent establishment only if it lasts more than 12 months.




4. Notwithstanding the preceding paragraphs of this Article, where an

enterprise of a Contracting State:

a) undertakes supervisory or consultancy activities in the other

Contracting State in connection with a building site or construction or

installation project which is being undertaken in that other Contracting

State, and those activities last more than 12 months;

b) carries on activities (including the operation of substantial equipment)

in the other Contracting State in the exploration for or exploitation of

natural resources situated in that other Contracting State for a period

or periods exceeding in the aggregate 90 days in any 12 month period;

or

c) operates substantial equipment in the other Contracting State (other

than as provided in subparagraph b)) for a period or periods exceeding

in the aggregate 183 days in any 12 month period,

such activities shall be deemed to be performed through a permanent

establishment that the enterprise has in that other Contracting State.

5. a) The duration of activities under paragraphs 3 and 4 shall be

determined by aggregating the periods during which activities are

carried on in a Contracting State by associated enterprises provided

that the activities carried on in that Contracting State by an enterprise

are connected with the activities carried on in that Contracting State by

its associated enterprise.

b) The period during which two or more associated enterprises are

carrying on concurrent activities shall be counted only once for the

purpose of determining the duration of activities.

c) For the purposes of this Article, an enterprise shall be deemed to be

associated with another enterprise if:

(i) an enterprise participates directly or indirectly in the

management, control or capital of the other enterprise; or




(ii) the same persons participate directly or indirectly in the

management, control or capital of the enterprises.

6. Notwithstanding the preceding paragraphs of this Article, an

enterprise shall not be deemed to have a permanent establishment merely by

reason of:

a) the use of facilities solely for the purpose of storage, display or


b) the maintenance of a stock of goods or merchandise belonging to the


c) the maintenance of a stock of goods or merchandise belonging to the


d) the maintenance of a fixed place of business solely for the purpose of

purchasing goods or merchandise or of collecting information, for the

enterprise; or

e) the maintenance of a fixed place of business solely for the purpose of

carrying on, for the enterprise, any other activity of a preparatory or

auxiliary character.

7. Notwithstanding the provisions of paragraphs 1 and 2, where a

person—other than an agent of an independent status to whom the provisions of

paragraph 8 apply—is acting on behalf of an enterprise and:

a) has, and habitually exercises, in a Contracting State an authority to

substantially negotiate on behalf of or conclude contracts in the name

of the enterprise; or

b) manufactures or processes in a Contracting State for the enterprise

goods or merchandise belonging to the enterprise,

that enterprise shall be deemed to have a permanent establishment in that

Contracting State in respect of any activities which that person undertakes for




that enterprise, unless the activities are limited to those mentioned in paragraph

6 which, if exercised through a fixed place of business, would not make this

fixed place of business a permanent establishment under paragraph 1.

8. An enterprise shall not be deemed to have a permanent establishment

in a Contracting State merely because it carries on business in that Contracting

State through a person who is a broker, general commission agent or any other

agent of an independent status, provided that the person is acting in the ordinary

course of the person’s business as such a broker or agent.

9. The fact that a company which is a resident of a Contracting State


Contracting State, or which carries on business in that other Contracting State

(whether through a permanent establishment or otherwise), shall not of itself

constitute either company a permanent establishment of the other.

10. The principles set forth in the preceding paragraphs of this Article

shall be applied in determining for the purposes of paragraph 7 of Article 11

and paragraph 5 of Article 12 whether there is a permanent establishment in a

state other than the Contracting States, and whether an enterprise, not being an

enterprise of either of the Contracting States, has a permanent establishment in a

Contracting State.

Article 6

INCOME FROM REAL PROPERTY

1. Income derived by a resident of a Contracting State from real property

situated in the other Contracting State may be taxed in that other Contracting

State.

2. The term “real property” shall have the meaning which it has under

the law of the Contracting State in which the property in question is situated.

The term shall in any case include:

a) a lease of land and any other interest in or over land, whether

improved or not;

b) property accessory to real property;




c) rights to which the provisions of general law respecting landed

property apply;

d) usufruct of real property;

e) rights to explore for mineral, oil or gas deposits or other natural

resources, and a right to work those deposits or resources; and

f) rights to receive variable or fixed payments either as consideration for

or in respect of the exploitation of, or the right to explore for or

exploit, mineral, oil or gas deposits, quarries or other places of

extraction or exploitation of natural resources.


3. Any interest or right referred to in paragraph 2 shall be regarded as



place.



5. The provisions of paragraphs 1, 3 and 4 shall also apply to the income

from real property of an enterprise.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only

in that Contracting State unless the enterprise carries on business in the other



taxed in that other Contracting State but only so much of them as is attributable

to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a





permanent establishment situated therein, there shall in each Contracting State






3. In determining the profits of a permanent establishment, there shall be


incurred for the purposes of the permanent establishment, including executive

and general administrative expenses so incurred, and which would be deductible

if the permanent establishment were an independent enterprise which paid those

expenses, whether incurred in the Contracting State in which the permanent

establishment is situated or elsewhere.



cases where the information available to the competent authority of that

Contracting State is inadequate to determine the profits to be attributed to a

permanent establishment, provided that, on the basis of the available

information, the determination of the profits of the permanent establishment is

consistent with the principles stated in this Article.

5. No profits shall be attributed to a permanent establishment by reason

of the mere purchase by that permanent establishment of goods or merchandise

for the enterprise.

6. For the purposes of the preceding paragraphs of this Article, the

profits to be attributed to the permanent establishment shall be determined by

the same method year by year unless there is good and sufficient reason to the

contrary.

7. Where profits include items of income or gains which are dealt with




Contracting State relating to tax imposed on profits from insurance with a

person other than a resident of that Contracting State.




9. Where:

a) a resident of a Contracting State is beneficially entitled, whether

directly or through one or more interposed trusts, to a share of the

profits derived from business carried on in the other Contracting State

by the trustee of a trust (other than a trust which is treated as a

company for tax purposes) in its capacity as trustee; and

b) in relation to the carrying on of the business, that trustee, in

accordance with the principles stated in Article 5, has a permanent

establishment in that other Contracting State,

the business carried on by the trustee shall be deemed to be a business carried

on in that other Contracting State by that resident through a permanent

establishment situated therein and the share of the profits shall be attributed to

that permanent establishment.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Contracting State derived from the

operation of ships or aircraft in international traffic shall be taxable only in that

Contracting State.

2. Notwithstanding the provisions of Article 2, provided that no political

subdivision or local authority of Australia levies a tax similar to the local

inhabitant taxes or the enterprise tax in Japan in respect of the operation of ships

or aircraft in international traffic carried on by an enterprise of Japan, an

enterprise of Australia shall be exempt from the local inhabitant taxes and the

enterprise tax in Japan in respect of the operation of ships or aircraft in

international traffic.

3. Notwithstanding the provisions of paragraph 1, profits of an enterprise

of a Contracting State derived from the operation of ships or aircraft may be

taxed in the other Contracting State to the extent that they are profits derived

directly or indirectly from the operation of ships or aircraft confined solely to

places in that other Contracting State.




4. For the purposes of this Article, profits derived from the carriage by

ships or aircraft of passengers, livestock, mail, goods or merchandise which are

shipped in a Contracting State and are discharged at a place in that Contracting

State shall be treated as profits from the operation of ships or aircraft confined

solely to places in that Contracting State.

5. The provisions of the preceding paragraphs of this Article shall also

apply to profits from the operation of ships or aircraft derived through

participation in a pool service, joint business or other profit sharing

arrangement.

Article 9

ASSOCIATED ENTERPRISES

1. Where:

a) an enterprise of a Contracting State participates directly or indirectly

in the management, control or capital of an enterprise of the other


b) the same persons participate directly or indirectly in the management,







conditions, might have been expected to have accrued to one of the enterprises,

but, by reason of those conditions, have not so accrued, may be included in the

profits of that enterprise and taxed accordingly.

2. Nothing in this Article, other than paragraph 4, shall affect the

application of any law of a Contracting State relating to the determination of the

tax liability of a person in cases where the information available to the

competent authority of that Contracting State is inadequate to determine the

profits accruing to an enterprise, provided that, on the basis of the available

information, the determination of that tax liability of the enterprise is consistent

with the principles stated in paragraph 1.




3. Where a Contracting State includes, in accordance with the provisions

of paragraph 1 or 2, in the profits of an enterprise of that Contracting State - and

taxes accordingly - profits on which an enterprise of the other Contracting State

has been charged to tax in that other Contracting State and where the competent

authorities of the Contracting States agree, upon consultation, that all or part of

the profits so included are profits which might have been expected to have

accrued to the enterprise of the first-mentioned Contracting State if the

conditions operative between the two enterprises had been those which might

have been expected to have operated between independent enterprises dealing

wholly independently with one another, then the other Contracting State shall

make an appropriate adjustment to the amount of the tax charged therein on

those agreed profits. In determining such adjustment, due regard shall be had to

the other provisions of this Convention.

4. Notwithstanding the provisions of paragraphs 1 and 2, a Contracting

State shall not change the profits of an enterprise of that Contracting State in the

circumstances referred to in those paragraphs, if an enquiry into the profits of

that enterprise is not initiated within seven years from the end of the taxable

year in which the profits that would be subject to such change, but for the

conditions referred to in those paragraphs, might have been expected to have

accrued to that enterprise. The provisions of this paragraph shall not apply in

the case of fraud or wilful default or if the inability to initiate an enquiry within

the prescribed period is attributable to the actions or inaction of that enterprise.

Article 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting

State for the purposes of its tax, being dividends beneficially owned by a

resident of the other Contracting State, may be taxed in that other Contracting

State.

2. However, such dividends may also be taxed in the Contracting State of

which the company paying the dividends is a resident for the purposes of its tax

and according to the law of that Contracting State, but the tax so charged shall

not exceed:




a) 5 per cent of the gross amount of the dividends if the beneficial owner

of the dividends is a company which owns directly shares representing

at least 10 per cent of the voting power of the company paying the

dividends;

b) 10 per cent 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 Contracting State of which the company paying the dividends is a

resident for the purposes of its tax if the beneficial owner of the dividends is a

company that is a resident of the other Contracting State and that has owned

directly shares representing at least 80 per cent of the voting power of the

company paying the dividends for the 12 month period ending on the date on

which entitlement to the dividends is determined and the company that is the

beneficial owner of the dividends:

a) is a qualified person by reason of the provisions of subparagraph c) of

paragraph 2 of Article 23;

b) has at least 50 per cent of the aggregate vote and value of its shares

owned directly or indirectly by five or fewer companies referred to in

subparagraph a); or

c) is granted benefits with respect to those dividends under paragraph 5

of Article 23.

4. Notwithstanding the provisions of paragraphs 2 and 3, dividends paid by a

company that is a resident of Japan and that is entitled to a deduction for

dividends paid to its beneficiaries in computing its taxable income in Japan,

being dividends beneficially owned by a resident of Australia, may also be

taxed in Japan according to the law of Japan, but the tax so charged shall not

exceed:

a) 15 per cent of the gross amount of the dividends if more than 50

percent of the assets of such company consist, directly or indirectly, of

real property situated in Japan;

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




5. The provisions of paragraphs 2, 3 and 4 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 Article means income from shares or

other rights, not being debt-claims, participating in profits, as well as income or

other distributions which are subjected to the same taxation treatment as income

from shares by the law of the Contracting State of which the company making

the distribution is a resident for the purposes of its tax.

7. a) Distributions of income, profits or gains by a Real Estate Investment

Trust (hereinafter referred to as a “REIT”), being distributions

beneficially owned by a resident of Japan, may be taxed in Japan.

b) However, such distributions may also be taxed in Australia according

to the law of Australia, but the tax so charged shall not exceed 15 per

cent of the gross amount of the distributions if the beneficial owner of

the distributions is a resident of Japan other than a beneficial owner of

the distributions which holds, or has held at any time in the 12 month

period preceding the date on which the distributions are made, directly

or indirectly, capital that represents at least 10 percent of the value of

all the capital in the REIT.

c) For the purposes of this paragraph, the term “Real Estate Investment

Trust” means a managed investment trust created or organised under

the laws of Australia which carries on a business consisting of

investment, directly or indirectly, in real property for the main purpose

of deriving rent.

8. The provisions of paragraphs 1, 2, 3, 4 and 7 shall not apply if the

beneficial owner of the dividends or distributions, 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 for the purposes of its tax (or, in

the case of a REIT to which paragraph 7 applies, in Australia) through a

permanent establishment situated therein and the holding in respect of which the

dividends or distributions are paid is effectively connected with such permanent

establishment. In such case the provisions of Article 7 shall apply.

9. Where a company which is a resident of a Contracting State derives profits

or income from the other Contracting State, that other Contracting State may




not impose any tax on the dividends paid by the company — being dividends

beneficially owned by a person who is not a resident of that other Contracting

State — except insofar as the holding in respect of which such dividends are

paid is effectively connected with a permanent establishment situated in that

other Contracting 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 that

other Contracting State. However, in the case of dividends paid by a company

which is deemed to be a resident only of a Contracting State by reason of the

provisions of paragraph 3 of Article 4, the other Contracting State may tax such

dividends to the extent that they are paid out of profits or income arising in that

other Contracting State and, in the case of dividends beneficially owned by a

resident of the first-mentioned Contracting State, according to the provisions of

paragraphs 2 or 3.

10. A resident of a Contracting State shall not be considered the beneficial

owner of the dividends paid by a resident of the other Contracting State for the

purposes of its tax in respect of preferred shares or other similar interests if such

preferred shares or other similar interests might not have been expected to have

been established or acquired unless a person:

a) that is not entitled to benefits with respect to dividends paid by a

resident of that other Contracting State which are equivalent to, or

more favourable than, those available under this Convention to a

resident of the first-mentioned Contracting State; and

b) that is not a resident of either Contracting State,

owned equivalent preferred shares or other similar interests in the

first-mentioned resident.

11. No relief shall be available under this Article if it was the main purpose or

one of the main purposes of any person concerned with the assignment of the

dividends or distributions, the creation or assignment of the shares or other

rights in respect of which the dividends or distributions are paid, or the

establishment, acquisition or maintenance of the company which is the

beneficial owner of the dividends or distributions or the conduct of its

operations to take advantage of this Article.




Article 11

INTEREST

1. Interest arising in a Contracting State and beneficially owned by a

resident of the other Contracting State may be taxed in that other Contracting

State.

2. However, such interest may also be taxed in the Contracting State in

which it arises and according to the law of that Contracting State, but the tax so

charged shall not exceed 10 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2, interest arising in a

Contracting State and beneficially owned by a resident of the other Contracting

State shall not be taxed in the first-mentioned Contracting State if:

a) the interest is derived by a Contracting State or a political subdivision

or local authority thereof, by any other body exercising governmental

functions in a Contracting State, or by the Bank of Japan or the

Reserve Bank of Australia;

b) the interest is derived by a financial institution which is unrelated to

and dealing wholly independently with the payer. For the purpose of

this Article, the term “financial institution” means a bank or other

enterprise substantially deriving its profits by raising debt finance in

the financial markets or taking deposits at interest and by using those

funds in carrying on a business of providing finance; or

c) the interest is derived by:

(i) in the case of Japan, the Japan Bank for International

Cooperation, or the Nippon Export and Investment Insurance;

(ii) in the case of Australia, the Export Finance and Insurance

Corporation, or a public authority that manages the

investments of the Future Fund; and




(iii) any similar institution as may be agreed upon from time to

time between the Governments of the Contracting States

through an exchange of diplomatic notes.

4. Notwithstanding the provisions of paragraph 3, interest referred to in

subparagraph b) of that paragraph may be taxed in the Contracting State in

which it arises at a rate not exceeding 10 per cent of the gross amount of the

interest if the interest is paid as part of an arrangement involving back-to-back

loans or other arrangement that is economically equivalent and intended to have

a similar effect to an arrangement involving back-to-back loans.

5. The term “interest” as used in this Article means income from

debt-claims of every kind, whether or not secured by mortgage and whether or

not carrying a right to participate in the debtor’s profits, and in particular,

interest from government securities and interest from bonds or debentures,

including premiums and prizes attaching to such securities, bonds or

debentures, and all other income that is subjected to the same taxation treatment

as income from money lent by the tax law of the Contracting State in which the

income arises. Income dealt with in Article 10 shall not be regarded as interest

for the purposes of this Convention.

6. The provisions of paragraphs 1 and 2, subparagraph b) of paragraph 3

and paragraph 4 shall not apply if the beneficial owner of the interest, being a

resident of a Contracting State, carries on business in the other Contracting

State in which the interest arises through a permanent establishment situated

therein and the debt-claims or other rights in respect of which the interest is

paid is effectively connected with such permanent establishment. In such case

the provisions of Article 7 shall apply.

7. Interest shall be deemed to arise in a Contracting State when the payer

is a resident of that Contracting State for the purposes of its tax. Where,

however, the person paying interest, whether such person is a resident of a

Contracting State or not, has in a Contracting State or a state other than the

Contracting States a permanent establishment in connection with which the

indebtedness on which the interest is paid were incurred, and such interest is

borne by such permanent establishment, then:

a) if the permanent establishment is situated in a Contracting State, such

interest shall be deemed to arise in that Contracting State; and




b) if the permanent establishment is situated in a state other than the

Contracting States, such interest shall not be deemed to arise in either

Contracting State.



person, the amount of the interest, having regard to the debt-claims or other

rights for which it is paid, exceeds the amount which might have been expected

to have been agreed upon by the payer and the beneficial owner in the absence

of such relationship, the provisions of this Article shall apply only to the

last-mentioned amount. In such case, the excess part of the payments shall

remain taxable according to the law of each Contracting State, due regard being

had to the other provisions of this Convention.


owner of the interest arising in the other Contracting State in respect of a

debt-claim or other right if such debt-claim or other right might not have been

expected to have been established unless a person:

a) that is not entitled to benefits with respect to the interest arising in that

other Contracting State which are equivalent to, or more favourable

than, those available under this Convention to a resident of the

first-mentioned Contracting State; and

b) that is not a resident of either Contracting State,

owned an equivalent debt-claim or other right against the first-mentioned

resident.

10. No relief shall be available under this Article if it was the main

purpose or one of the main purposes of any person concerned with the

assignment of the interest, the creation or assignment of the debt-claim or other

rights in respect of which the interest is paid, or the establishment, acquisition

or maintenance of the company which is the beneficial owner of the interest or

the conduct of its operations to take advantage of this Article.




Article 12

ROYALTIES

1. Royalties arising in a Contracting State and beneficially owned by a


State.

2. However, such royalties may also be taxed in the Contracting State in

which they arise and according to the law of that Contracting State, but the tax

so charged shall not exceed 5 per cent of the gross amount of the royalties.

3. The term “royalties” as used in this Article means payments or credits,

whether periodical or not, and however described or computed, to the extent to

which they are made as consideration for:

a) the use of, or the right to use, any copyright, patent, design or model,

plan, secret formula or process, trademark or other like property or

right;

b) the supply of scientific, technical, industrial or commercial knowledge

or information;

c) the supply of any assistance that is ancillary and subsidiary to, and is


such property or right as is mentioned in subparagraph a) or any such

knowledge or information as is mentioned in subparagraph b);

d) the use of, or the right to use:





e) total or partial forbearance in respect of the use or supply of any





4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the royalties, being a resident of a Contracting State, carries on

business in the other Contracting State in which the royalties arise through a

permanent establishment situated therein and the property or right in respect of

which the royalties are paid or credited is effectively connected with such

permanent establishment. In such case the provisions of Article 7 shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the

payer is a resident of that Contracting State for the purposes of its tax. Where,

however, the person paying royalties, whether such person is a resident of a

Contracting State or not, has in a Contracting State or a state other than the

Contracting States a permanent establishment in connection with which the

liability to pay or credit the royalties was incurred, and such royalties are borne

by such permanent establishment, then:

a) if the permanent establishment is situated in a Contracting State, such

royalties shall be deemed to arise in that Contracting State; and

b) if the permanent establishment is situated in a state other than the

Contracting States, such royalties shall not be deemed to arise in either

Contracting State.



person, the amount of the royalties, having regard to what they are paid or

credited for, exceeds the amount which might have been expected to have been

agreed upon by the payer and the beneficial owner in the absence of such


amount. In such case, the excess part of the payments or credits shall remain

taxable according to the law of each Contracting State, due regard being had to

the other provisions of this Convention.


owner of the royalties arising in the other Contracting State in respect of the use

of the property or right if such royalties might not have been expected to have

been paid to the resident unless the resident paid royalties in respect of the same

property or right to a person:




a) that is not entitled to benefits with respect to royalties arising in that

other Contracting State which are equivalent to, or more favourable

than, those available under this Convention to a resident of the

first-mentioned Contracting State; and

b) that is not a resident of either Contracting State.

8. No relief shall be available under this Article if it was the main

purpose or one of the main purposes of any person concerned with the

assignment of the royalties, the creation or assignment of the property or right

in respect of which the royalties are paid, or the establishment, acquisition or

maintenance of the company which is the beneficial owner of the royalties or

the conduct of its operations to take advantage of this Article.

Article 13

ALIENATION OF PROPERTY

1. Income, profits or gains derived by a resident of a Contracting State

from the alienation of real property referred to in Article 6 and situated in the

other Contracting State may be taxed in that other Contracting State.


from the alienation of shares in a company or of interests in a partnership, trust

or other entity may be taxed in the other Contracting State where the shares or

the interests derive at least 50 per cent of their value directly or indirectly from

real property referred to in Article 6 and situated in that other Contracting State.

3. Unless the provisions of paragraph 2 are applicable, income, profits or

gains derived by a resident of a Contracting State which are not subject to tax in

that Contracting State from the alienation of shares issued by a company being a


State, if:

a) shares owned by the alienator (together with such shares owned by

any other related or connected persons as may be aggregated

therewith) amount to at least 25 per cent of the total issued shares of

such company at any time during the taxable year in which the

alienation takes place; and




b) the total of the shares alienated by the alienator and such related or

connected persons during that taxable year in which the alienation

takes place amounts to at least 5 per cent of the total issued shares of

such company.

4. Notwithstanding the provisions of paragraph 3, income, profits or

gains from the alienation of property (other than real property) that forms part

of the business property of a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State, including income, profits

or gains from the alienation of that permanent establishment (alone or with the

whole enterprise), may be taxed in that other Contracting State.

5. Income, profits or gains derived by an enterprise of a Contracting

State from the alienation of ships or aircraft operated by that enterprise in

international traffic, or of property (other than real property) pertaining to the

operation of such ships or aircraft, shall be taxable only in that Contracting

State.

6. Gains from the alienation of any property other than that referred to in

the preceding paragraphs of this Article shall be taxable only in the Contracting

State of which the alienator is a resident.

Article 14

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and

other similar remuneration derived by a resident of a Contracting State in

respect of an employment shall be taxable only in that Contracting State unless

the employment is exercised in the other Contracting State. If the employment

is so exercised, such remuneration as is derived therefrom may be taxed in that


2. Notwithstanding the provisions of paragraph 1, remuneration derived

by a resident of a Contracting State in respect of an employment exercised in

the other Contracting State shall be taxable only in the first-mentioned

Contracting State if:

a) the recipient is present in the other Contracting State for a period or

periods not exceeding in the aggregate 183 days in any 12 month




period commencing or ending in the taxable year of that other

Contracting State;

b) the remuneration is paid by, or on behalf of, an employer who is not a

resident of the other Contracting State; and

c) the remuneration is not borne by a permanent establishment which the

employer has in the other Contracting State.

3. Notwithstanding the preceding paragraphs of this Article,

remuneration derived in respect of an employment exercised aboard a ship or

aircraft operated in international traffic by an enterprise of a Contracting State

may be taxed in that Contracting State.

Article 15

DIRECTORS’ FEES

Directors’ fees and other similar payments derived by a person who is a resident

of a Contracting State in that person’s capacity as a member of the board of

directors of a company which is a resident of the other Contracting State may be

taxed in that other Contracting State.

Article 16

ENTERTAINERS AND SPORTSPERSONS

1. Notwithstanding the provisions of Articles 7 and 14, income derived

by a person who is a resident of a Contracting State as an entertainer, such as a

theatre, motion picture, radio or television artiste, or a musician, or as a

sportsperson, from that person’s personal activities as such exercised in the

other Contracting State, may be taxed in that other Contracting State.

2. Where income in respect of personal activities exercised by an

entertainer or a sportsperson in that person’s capacity as such accrues not to that

person but to another person, that income may, notwithstanding the provisions

of Articles 7 and 14, be taxed in the Contracting State in which the activities of

the entertainer or sportsperson are exercised.




Article 17

PENSIONS AND ANNUITIES

1. Subject to the provisions of paragraph 2 of Article 18, pensions and

other similar remuneration paid periodically to an individual who is a resident

of a Contracting State shall be taxable only in that Contracting State.

2. Annuities paid to an individual who is a resident of a Contracting State

shall be taxable only in that Contracting State.

3. Lump sums in lieu of the right to receive a pension or other similar

remuneration, or to receive an annuity, paid to an individual who is a resident of

a Contracting State shall be taxable only in that Contracting State. However,

such lump sums may also be taxed in the other Contracting State if they arise in

that other Contracting State.


times during the life or during a specified or ascertainable period of time under

an obligation to make the payments in return for adequate and full consideration

in money or money’s worth.

Article 18

GOVERNMENT SERVICE

1. a) Salaries, wages and other similar remuneration paid by a Contracting

State or a political subdivision or local authority thereof to an

individual in respect of services rendered to that Contracting State or

political subdivision or local authority, in the discharge of functions of

a governmental nature, shall be taxable only in that Contracting State.

b) However, such salaries, wages and other similar remuneration shall be

taxable only in the other Contracting State if the services are rendered

in that other Contracting State and the individual is a resident of that

other Contracting State who:

(i) is a national of that other Contracting State; or




(ii) did not become a resident of that other Contracting State

solely for the purpose of rendering the services.

2. a) Notwithstanding the provisions of paragraph 1, pensions and other

similar remuneration paid periodically by, or out of funds to which

contributions are made or created by, a Contracting State or a political

subdivision or local authority thereof to an individual in respect of

services rendered to that Contracting State or political subdivision or

local authority shall be taxable only in that Contracting State.

b) However, such pensions and other similar remuneration shall be

taxable only in the other Contracting State if the individual is a

resident of, and a national of, that other Contracting State.

3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries,

wages, pensions, and other similar remuneration in respect of services rendered

in connection with a business carried on by a Contracting State or a political

subdivision or local authority thereof.

Article 19

STUDENTS

Payments which a student or business apprentice who is or was immediately

before visiting a Contracting State a resident of the other Contracting State and

who is temporarily present in the first-mentioned Contracting State solely for

the purpose of that person’s education or training receives for the purpose of

that person’s maintenance, education or training shall not be taxed in the

first-mentioned Contracting State, provided that such payments arise from

sources outside that first-mentioned Contracting State. The exemption provided

by this Article shall apply to a business apprentice only for a period not

exceeding one year from the date the person first begins that person’s training in

the first-mentioned Contracting State.

Article 20

SLEEPING PARTNERSHIP (TOKUMEI KUMIAI)

Notwithstanding any other provisions of this Convention, other than those of

Article 26, any income, profits or gains derived by a sleeping partner in respect




of a sleeping partnership (Tokumei Kumiai) contract or other similar contract

may be taxed in the Contracting State in which such income, profits or gains

arise, and according to the laws of that Contracting State.

Article 21

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising,

not dealt with in the foregoing Articles of this Convention shall be taxable only


2. The provisions of paragraph 1 shall not apply to income, other than

income from real property as defined in paragraph 2 of Article 6, derived by a

resident of a Contracting State who carries on business in the other Contracting

State through a permanent establishment situated therein and the property or

right in respect of which the income is paid is effectively connected with such


3. Notwithstanding the provisions of paragraphs 1 and 2, items of

income of a resident of a Contracting State not dealt with in the foregoing

Articles of this Convention from sources in the other Contracting State may also

be taxed in that other Contracting State.

Article 22

SOURCE OF INCOME


which, under any one or more of Articles 6 to 8 and 10 to 18, may be taxed in

the other Contracting State shall for the purposes of the law of that other

Contracting State relating to its tax be deemed to arise from sources in that



which, under any one or more of Articles 6 to 8, 10 to 18 and 20, may be taxed

in the other Contracting State shall for the purposes of Article 25 and of the law

of the first-mentioned Contracting State relating to its tax be deemed to arise





Article 23

LIMITATION ON BENEFITS

1. Except as otherwise provided in this Article, a resident of a

Contracting State that derives income, profits or gains described in Article 7; in

paragraph 3 of Article 10 or paragraph 3 of Article 11; or in Article 13 from the

other Contracting State shall be entitled to the benefits granted for a taxable

year by the provisions of those paragraphs or Articles only if such resident is a

qualified person as defined in paragraph 2 and satisfies any other specified

conditions in those paragraphs or Articles for the obtaining of such benefits.

2. A resident of a Contracting State shall be a qualified person for a

taxable year only if such resident is either:

a) an individual;

b) a qualified governmental entity;

c) a company (including a company participating in a dual listed

company arrangement), if its principal class of shares is listed or

registered on a recognised stock exchange specified in clause (i) or (ii)

of subparagraph d) of paragraph 6 and is regularly traded on one or

more recognised stock exchanges;

d) a person other than an individual or a company, if the principal class

of units in that person is listed or admitted to dealings on a recognised

stock exchange specified in clause (i) or (ii) of subparagraph d) of

paragraph 6 and is regularly traded on one or more recognised stock

exchanges;

e) a pension fund, provided that as of the end of the prior taxable year

more than 50 per cent of its beneficiaries, members or participants are

individuals who are residents of either Contracting State;

f) an organisation established under the law of that Contracting State and

operated exclusively for a religious, charitable, educational, scientific,




artistic, cultural or public purposes, provided that all or part of its

income, profits or gains may be exempt from tax under the domestic

law of that Contracting State; or

g) a person other than an individual, if residents of either Contracting

State that are qualified persons by reason of the provisions of

subparagraphs a) to f) of this paragraph own, directly or indirectly, at

least 50 per cent of the aggregate vote and value of the shares of the

person, or at least 50 per cent of the beneficial interests in the person.

3. Where the provisions of subparagraph g) of paragraph 2 apply:

a) in respect of taxation by withholding at source, a resident of a

Contracting State shall be considered to satisfy the conditions

described in that subparagraph for the taxable year in which the

payment is made if such resident satisfies those conditions during the

12 month period preceding the date of payment of an item of income,

profits or gains (or, in the case of dividends, the date on which

entitlement to the dividends is determined);

b) in all other cases, a resident of a Contracting State shall be considered

to satisfy the conditions described in that subparagraph for the taxable

year in which the payment is made if such resident satisfies those

conditions on at least half the days of the taxable year.

4. a) Notwithstanding that a resident of a Contracting State may not be a

qualified person, that resident shall be entitled to the benefits granted

by the provisions of Article 7; of paragraph 3 of Article 10 or

paragraph 3 of Article 11; or of Article 13 with respect to an item of

income, profits or gains described in those paragraphs or Articles

derived from the other Contracting State if the resident is carrying on

business in the first-mentioned Contracting State (other than the

business of making or managing investments for the resident’s own

account, unless the business is banking, insurance or securities

business carried on by a bank, insurance company or securities dealer),

the income, profits or gains derived from the other Contracting State

are derived in connection with, or are incidental to, that business and

that resident satisfies any other specified conditions in those

paragraphs or Articles for the obtaining of such benefits.




b) If a resident of a Contracting State derives an item of income, profits

or gains from a business carried on by that resident in the other

Contracting State or derives an item of income, profits or gains arising

in the other Contracting State from a person that has with the resident

a relationship described in subparagraph a) or b) of paragraph 1 of

Article 9, the conditions described in subparagraph a) of this

paragraph shall be considered to be satisfied with respect to such an

item of income, profits or gains only if the business carried on in the

first-mentioned Contracting State is substantial in relation to the

business carried on in the other Contracting State. Whether such

business is substantial for the purpose of this paragraph shall be

determined on the basis of all the facts and circumstances.

c) In determining whether a person is carrying on business in a

Contracting State under subparagraph a) of this paragraph, the

business conducted by a partnership in which that person is a partner

and the business conducted by persons connected to such person shall

be deemed to be conducted by such person. A person shall be

connected to another if one possesses, directly or indirectly, at least 50

per cent of the beneficial interests in the other (or, in the case of a

company, at least 50 per cent of the aggregate vote and value of the

shares of the company) or another person possesses, directly or

indirectly, at least 50 per cent of the beneficial interests (or, in the case

of a company, at least 50 per cent of the aggregate vote and value of

the shares of the company) in each person. In any case, a person shall

be considered to be connected to another if, on the basis of all the facts

and circumstances, one has control of the other or both are under the

control of the same person or persons.

5. A resident of a Contracting State that is neither a qualified person nor

entitled under paragraph 4 to the benefits granted by the provisions of Article 7;

of paragraph 3 of Article 10 or paragraph 3 of Article 11; or of Article 13 with

respect to an item of income, profits or gains described in those paragraphs or

Articles shall, nevertheless, be granted such benefits if the competent authority

of the other Contracting State determines, in accordance with its domestic law

or administrative practice, that the establishment, acquisition or maintenance of

such resident and the conduct of its operations are considered as not having the

obtaining of such benefits as one of the principal purposes.





a) the term “qualified governmental entity” means entities referred to in

subparagraphs a) and c) of paragraph 3 of Article 11;

b) the term “principal class of shares” means the ordinary shares of the

company, provided that such class of shares represents the majority of

the voting power and value of the company. If no single class of

ordinary shares represents the majority of the voting power and value

of the company, the principal class of shares is that class or those

classes that in the aggregate represent a majority of the voting power

and value of the company. For the purposes of the preceding

sentences, in the case of a company participating in a dual listed

company arrangement, the principal class of shares will be determined

after excluding the special voting shares which were issued as a means

of establishing that dual listed company arrangement;

c) the term “dual listed company arrangement” means an arrangement

pursuant to which two publicly listed companies, while maintaining

their separate legal entity status, shareholdings and listings, align their

strategic directions and the economic interests of their respective

shareholders through:

(i) the appointment of common (or almost identical) boards of

directors;

(ii) management of the operations of the two companies on a

unified basis;

(iii) equalised distributions to shareholders in accordance with an

equalisation ratio applying between the two companies,

including in the event of a winding up of one or both of the

companies;

(iv) the shareholders of both companies voting in effect as a

single decision-making body on substantial issues affecting

their combined interests; and




(v) cross-guarantees as to, or similar financial support for, each

other’s material obligations or operations except where the

effect of the relevant regulatory requirements prevents such

guarantees or financial support;

d) the term “recognised stock exchange” means:

(i) any stock exchange established by a Financial Instruments

Exchange or an approved-type financial instruments firms

association under the terms of the Financial Instruments and

Exchange Law (Law No.25 of 1948) of Japan;

(ii) the Australian Securities Exchange and any other securities

exchange recognised as such under the Corporations Act

2001 of Australia; and

(iii) any other stock exchange which the competent authorities of

the Contracting States agree to recognise for the purposes of

this Article;

e) the term “units” includes any instrument, not being a debt-claim,

granting an entitlement to share in the asset or income of, or receive a

distribution from, the person;

f) the term “principal class of units” means the class of units which

represents the majority of the value of the person. If no single class of

units represents the majority of the value of the person, the principal

class of units is that class or those classes that in the aggregate

represent the majority of the value of the person; and

g) the term “pension fund” means any person that:

(i) is established under the law of a Contracting State; and

(ii) is operated principally to administer or provide pensions,

retirement benefits or other similar remuneration or to earn

income, profits or gains for the benefit of other pension funds.




7. Nothing in this Article shall be construed as restricting, in any manner,

the application of any provisions of the law of a Contracting State which are

designed to prevent the avoidance or evasion of taxes.

Article 24

LIMITATION OF RELIEF

1. Where under this Convention any income, profits or gains are relieved

from tax in a Contracting State and, under the law in force in the other

Contracting State, an individual, in respect of that income or those profits or

gains, is taxed by reference to the amount thereof that is remitted to or received

in that other Contracting State and not by reference to the full amount thereof,

then the relief to be allowed under the Convention in the first-mentioned

Contracting State shall apply only to so much of that income or those profits or

gains as is taxed in the other Contracting State.

2. Where under this Convention any income, profits or gains are relieved


Contracting State, an individual, in respect of that income or those profits or

gains, is exempt from tax by virtue of being a temporary resident of that other

Contracting State within the meaning of the applicable law of that other

Contracting State, then the relief to be allowed under the Convention in the

first-mentioned Contracting State shall not apply to the extent that that income

or those profits or gains are exempt from tax in the other Contracting State.

Article 25

ELIMINATION OF DOUBLE TAXATION

1. Subject to the provisions of the laws of Japan regarding the allowance

as a credit against Japanese tax of tax payable in any country other than Japan:

a) Where a resident of Japan derives income from Australia which may

be taxed in Australia in accordance with the provisions of this

Convention, the amount of Australian tax payable in respect of that

income shall be allowed as a credit against the Japanese tax imposed

on that resident. The amount of credit, however, shall not exceed that

part of the Japanese tax which is appropriate to that income.




b) Where the income derived from Australia is dividends paid by a

company which is a resident of Australia to a company which is a

resident of Japan and which has owned at least 10 per cent either of

the voting shares or of the total issued shares of the company paying

the dividends during the period of six months immediately before the

day when the obligation to pay dividends is confirmed, the credit shall

take into account Australian tax payable by the company paying the

dividends in respect of its income.

2. Subject to the provisions of the law of Australia from time to time in



this Article), Japanese tax paid under the law of Japan and in accordance with

this Convention, whether directly or by deduction, in respect of income, profits

or gains derived by a person who is a resident of Australia from sources in

Japan shall be allowed as a credit against Australian tax payable in respect of

that income, profits or gains.

Article 26

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other



requirements to which nationals of that other Contracting State in the same

circumstances, in particular with respect to residence, are or may be subjected.

The provisions of this paragraph shall, notwithstanding the provisions of Article

1, also apply to persons who are not residents of one or both of the Contracting

States.

2. The taxation on a permanent establishment which an enterprise of a


levied in that other Contracting State than the taxation levied on enterprises of

that other Contracting State carrying on the same activities in similar

circumstances. The provisions of this paragraph shall not be construed as

obliging a Contracting State to grant to individuals who are residents of the

other Contracting State any personal allowances, reliefs and reductions for

taxation purposes which it grants to its own residents.




3. Except where the provisions of paragraph 1 of Article 9, paragraph 8

of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other

disbursements paid by an enterprise of a Contracting State to a resident of the

other Contracting State shall, for the purpose of determining the taxable profits

of such enterprise, be deductible under the same conditions as if they had been

paid to a resident of the first-mentioned Contracting State.

4. Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by one or more residents of

the other Contracting State, shall not be subjected in the first-mentioned

Contracting State to any taxation or any requirement connected therewith which

is other or more burdensome than the taxation and connected requirements to

which other similar enterprises of the first-mentioned Contracting State in

similar circumstances are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provisions of

Article 2, apply to taxes of every kind and description imposed by a Contracting

State or a political subdivision or local authority thereof.

Article 27

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the

Contracting States result or will result for the person in taxation not in

accordance with the provisions of this Convention, the person may, irrespective

of the remedies provided by the domestic law of those Contracting States,

present a case to the competent authority of the Contracting State of which the

person is a resident or, if the case comes under paragraph 1 of Article 26, to that

of the Contracting State of which the person is a national. The case must be

presented within three years from the first notification of the action resulting in

taxation not in accordance with the provisions of the Convention.

2. The competent authority shall endeavour, if the claim appears to it to

be justified and if it is not itself able to arrive at a satisfactory solution, to

resolve the case by mutual agreement with the competent authority of the other


accordance with the provisions of this Convention. Any agreement reached

shall be implemented notwithstanding any time limits in the domestic law of the

Contracting States.




3. The competent authorities of the Contracting States shall endeavour to

resolve by mutual agreement any difficulties or doubts arising as to the

interpretation or application of this Convention. They may also consult together

for the elimination of double taxation in cases not provided for in the

Convention.

4. The competent authorities of the Contracting States may communicate

with each other directly for the purpose of reaching an agreement in the sense of

the preceding paragraphs of this Article.

5. For the purposes of paragraph 3 of Article XXII (Consultation) of the


notwithstanding the provisions of that paragraph, any dispute between them as

to whether a measure falls within the scope of this Convention may be brought

before the Council for Trade in Services, as provided by that paragraph, only

with the consent of both Contracting States. Any doubt as to the interpretation

of this paragraph shall be resolved under paragraph 3 of this Article or, failing



Article 28


1. The competent authorities of the Contracting States shall exchange

such information as is foreseeably relevant for carrying out the provisions of

this Convention or to the administration or enforcement of the domestic law

concerning taxes of every kind and description imposed on behalf of the

Contracting States, insofar as the taxation thereunder is not contrary to the

Convention. The exchange of information is not restricted by Articles 1 and 2.



domestic law of that Contracting State and shall be disclosed only to persons or

authorities (including courts and administrative bodies) concerned with the

assessment or collection of, the enforcement or prosecution in respect of, the

determination of appeals in relation to the taxes referred to in paragraph 1, or

the oversight of the above. Such persons or authorities shall use the information




only for such purposes. They may disclose the information in public court

proceedings or in judicial decisions.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so

as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the law and


b) to supply information which is not obtainable under the law or in the


State;


industrial, commercial or professional secret or trade process, or

information, the disclosure of which would be contrary to public

policy.



measures to obtain the requested information, even though that other

Contracting State may not need such information for its own tax purposes. The

obligation contained in the preceding sentence is subject to the limitations of

paragraph 3 but in no case shall such limitations be construed to permit a

Contracting State to decline to supply information solely because it has no

domestic interest in such information.





interests in a person.




Article 29

MEMBERS OF DIPLOMATIC MISSIONS

AND CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members of

diplomatic missions or consular posts under the general rules of international

law or under the provisions of special international agreements.

Article 30

HEADINGS

The headings of the Articles of this Convention are inserted for convenience of

reference only and shall not affect the interpretation of the Convention.

Article 31

ENTRY INTO FORCE

1. This Convention shall be approved in accordance with the legal

procedures of each of the Contracting States and shall enter into force on the

thirtieth day after the date of exchange of diplomatic notes indicating such

approval.

2. This Convention shall be applicable:


(i) with respect to taxes withheld at source, for amounts taxable

on or after 1 January in the calendar year next following that

in which the Convention enters into force;

(ii) with respect to taxes on income which are not withheld at

source, as regards income for any taxable year beginning on

or after 1 January in the calendar year next following that in

which the Convention enters into force; and




(iii) with respect to other taxes, as regards taxes for any taxable

year beginning on or after 1 January in the calendar year next

following that in which the Convention enters into force; and


(i) with respect to withholding tax on income that is derived by a

resident of Japan, in relation to income derived on or after


the Convention enters into force; and

(ii) with respect to other taxes, as regards any taxable year


following that in which the Convention enters into force.

3. The Agreement between Japan and the Commonwealth of Australia

for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income signed at Canberra on 20 March, 1969

(hereinafter referred to as “the prior Agreement”) shall cease to be effective

from the date upon which this Convention has effect in respect of the taxes to

which the Convention applies in accordance with the provisions of paragraph 2.

4. The prior Agreement shall terminate on the last date on which it has

effect in accordance with this Article.

5. Notwithstanding the entry into force of this Convention, an individual

who is entitled to the benefits of Article 15 of the prior Agreement at the time of

the entry into force of the Convention shall continue to be entitled to such

benefits until such time as the individual would have ceased to be entitled to

such benefits if the prior Agreement had remained in force.

Article 32

TERMINATION

This Convention shall remain in force until terminated by a Contracting State.

Either Contracting State may terminate the Convention after the expiration of a

period of five years from the date of its entry into force, by giving to the other

Contracting State, through the diplomatic channel, six months prior written

notice of termination. In such event, the Convention shall cease to have effect:





(i) with respect to taxes withheld at source, for amounts taxable

on or after 1 January in the calendar year next following the

expiration of the six month period;

(ii) with respect to taxes on income which are not withheld at

source, as regards income for any taxable year beginning on

or after 1 January in the calendar year next following the

expiration of the six month period; and

(iii) with respect to other taxes, as regards taxes for any taxable

year beginning on or after 1 January in the calendar year next

following the expiration of the six month period; and



resident of Japan, in relation to income derived on or after

1 January in the calendar year next following the expiration of

the six month period; and

(ii) with respect to other taxes, as regards any taxable year


following the expiration of the six month period.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by


DONE in duplicate at Tokyo this thirty-first day of January, 2008, in the

English and Japanese languages, each text being equally authentic.




For Australia

For Japan

Hon. Stephen Smith

Minister for Foreign Affairs


Hon. Masahiko Koumura





Protocol

At the signing of the Convention between Australia and Japan for the

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income (hereinafter referred to as “the Convention”),

Australia and Japan have agreed upon the following provisions, which shall

form an integral part of the Convention.

1. With reference to subparagraph b) of paragraph 1 of Article 2 (Taxes

Covered) of the Convention:

The term “the petroleum resource rent tax” means the resource rent tax, in

respect of offshore projects relating to the exploration for or exploitation of

petroleum resources, imposed under the Petroleum Resource Rent Tax Act

1987.

2. With reference to subparagraph d) of paragraph 1 of Article 3

(General Definitions) of the Convention:

The term “Australian tax” or “Japanese tax” shall not include any amount which

represents a penalty or interest imposed under the laws of Australia or Japan,

respectively, relating to the taxes to which the Convention applies.

3. With reference to paragraph 2 of Article 4 (Resident) of the

Convention:

It is understood that the fact of having an habitual abode in a Contracting State

rather than in the other Contracting State shall be taken into account in

determining where the individual’s centre of vital interests is situated.

4. With reference to paragraph 3 of Article 4 (Resident) of the

Convention:

It is understood that the term “any other relevant factors” includes:

a) where the senior day-to-day management is carried on;

b) which Contracting State’s law governs the legal status;




c) where the accounting records are held; and

d) where business is carried on.

5. With reference to subparagraphs b) and c) of paragraph 4 of Article 5

(Permanent Establishment) of the Convention:

a) It is understood that an enterprise of a Contracting State shall not be

considered to operate equipment in the other Contracting State where

the enterprise leases equipment under a lease contract that is solely for

the provision of equipment, including a bareboat lease contract.

b) It is understood that the factors of size, quantity or value of equipment

or the role of equipment in income producing activities are relevant in

determining whether the equipment is substantial on the basis of the

facts and circumstances of each particular case.

c) It is understood that the term “substantial equipment” may include:

(i) industrial earthmoving equipment or construction equipment

used in road building, dam building or powerhouse

construction;

(ii) manufacturing or processing equipment used in a factory; and

(iii) oil or drilling rigs, platforms and other structures used in the

petroleum or mining industry.

6. With reference to paragraph 7 of Article 5 (Permanent Establishment)

of the Convention:

It is understood that the term “substantially negotiate” is included in order to

remove any doubt as to the existence of a permanent establishment where

contracts that have been negotiated by an agent in a Contracting State are

formally concluded in the other Contracting State.




7. With reference to Articles 6 (Income from Real Property), 7 (Business

Profits), 21 (Other Income) and 22 (Source of Income) of the Convention:

It is understood that nothing in these Articles shall prevent a Contracting State

from applying its domestic tax law in the case where income is derived by a

resident of that Contracting State from real property situated in that Contracting

State, even where such a resident carries on business in the other Contracting

State through a permanent establishment situated therein and the real property is

effectively connected with such permanent establishment. In this case, such

income shall not be deemed to arise from sources in that other Contracting State

for the purposes of applying the domestic tax law of the first-mentioned

Contracting State.

8. With reference to subparagraph f) of paragraph 2 of Article 6 (Income

from Real Property) of the Convention:

It is understood that the rights referred to in that subparagraph principally cover:

a) rights to receive payments where the person receiving the payments

grants rights to explore for or exploit natural resources; and

b) rights to receive payments which arise or are quantified by reference

to the exploitation of, or exploration for, natural resources in

circumstances where the person receiving the payments may not have

an interest in the natural resources or rights over the extraction of, or

exploration for, natural resources.

9. With reference to Articles 7 (Business Profits) and 13 (Alienation of

Property) of the Convention:

It is understood that, where an enterprise of a Contracting State which has

carried on business in the other Contracting State through a permanent

establishment situated therein, receives, after the enterprise has ceased to carry

on business as aforesaid, income, profits or gains attributable to the permanent

establishment, such income, profits or gains may be taxed in that other

Contracting State in accordance with the principles stated in Articles 7 and 13

of the Convention.




10. With reference to paragraph 6 of Article 7 (Business Profits) of the

Convention:

It is understood that, for the purposes of the paragraph, a good and sufficient

reason to the contrary shall be considered to exist where there is an alternative

method that gives the most appropriate determination of the profits in

accordance with the principles contained in the Article.

11. With reference to subparagraph a) of paragraph 9 of Article 7

(Business Profits) of the Convention:

It is understood that in the case of Japan the term “a trust which is treated as a

company for tax purposes” means a trust, the trustee of which is subject to tax

in respect of profits derived from business carried on by the use of trust estate.

12. With reference to Articles 10 (Dividends), 11 (Interest) and 12

(Royalties) of the Convention:

The term “for the purposes of its tax” in relation to a resident of a Contracting

State refers to the case where a person is a resident of a Contracting State by

virtue of paragraph 1 of Article 4 of the Convention, even if the person is

deemed to be a resident of the other Contracting State by virtue of paragraph 2

or 3 of that Article.

13. With reference to subparagraph a) of paragraph 3 of Article 11

(Interest) of the Convention:

It is understood that the term “any other body exercising governmental

function” shall be determined according to the law of the Contracting State in

which the interest arises.

14. With reference to subparagraph b) of paragraph 3 of Article 11

(Interest) of the Convention:

It is understood that:

a) a financial institution shall be unrelated to a payer of the interest

where, in considering the level of participation in the ownership or

control of either the financial institution or the payer by the other




party, neither party is able to exert sufficient influence over the other

party;

b) an enterprise shall derive its profits substantially by a certain activity,

where the activity constitutes its main activity when compared to any

other activity that it undertakes in terms of its contribution to the

enterprise’s overall profits.

15. With reference to paragraph 4 of Article 11 (Interest) of the

Convention:

It is understood that the term “arrangement involving back-to-back loans”

would cover, inter alia, any kind of arrangement structured in such a way that a

financial institution which is a resident of a Contracting State receives interest

arising in the other Contracting State and the financial institution pays an

equivalent interest to another person who is a resident of the first-mentioned

Contracting State and, if it received the interest directly from the other

Contracting State, would not be entitled to the exemption from tax with respect

to that interest in that other Contracting State.

16. With reference to paragraph 3 of Article 12 (Royalties) of the

Convention:

The term “royalties” shall not include payments for the use of spectrum

licences. The provisions of Article 7 of the Convention shall apply to such

payments.

17. With reference to subparagraph e) of paragraph 3 of Article 12

(Royalties) of the Convention:

It is understood that the term “forbearance in respect of the use or supply of any

property or right” applies to cases where the holder of any property or right

receives a payment or provides credits, as consideration, for not making such

property or right available to another person.

18. With reference to paragraph 3 of Article 13 (Alienation of Property) of

the Convention:

It is understood that where, in the case of schemes of reorganisation of

companies, the laws of a Contracting State allow for the taxation of the gains




arising from the disposal of shares in a company to be deferred, such gains shall

be regarded as subject to tax unless any part of the deferred gains is as a result

of a later disposal or reorganisation subject to a statutory exemption under the

laws of that Contracting State.

19. With reference to paragraph 1 of Article 25 (Elimination of Double

Taxation) of the Convention:

For the purposes of the paragraph, the income tax and the petroleum resource

rent tax referred to in subparagraph b) of paragraph 1 of Article 2 of the

Convention shall be treated as a unified tax on income.

20. With reference to Article 26 (Non-Discrimination) of the Convention:

The provisions of the Article shall not apply to the following provisions of the

laws of Australia:

a) Subdivision A of Division 3 of Part III of the Income Tax Assessment

Act 1936 (hereinafter referred to as “ITAA 1936”), which provides

deductions to eligible taxpayers for research and development;

b) Section 26-25 of Part 2-5 of Chapter 2 of the Income Tax Assessment

Act 1997 (hereinafter referred to as “ITAA 1997”), which provides

measures to ensure that taxes can be effectively collected and

recovered, including conservancy measures under the general law; and

c) any provision adopted after the date of signature of the Convention

which is substantially similar in purpose or intent to a provision

covered by this paragraph, or is otherwise agreed between the

Governments of the Contracting States through an exchange of

diplomatic notes.

21. With reference to Article 26 (Non-Discrimination) of the Convention:

It is understood that nothing in the Article shall be construed as restricting the

application of any of the following provisions of the laws of Australia:

a) Subdivision D of Division 2 of Part III of the ITAA 1936, to the extent

those provisions do not allow tax rebates or credits to non-resident




taxpayers in relation to dividends paid by a company that is a resident

of Australia for the purposes of its tax;

b) Division 6AAA of Part III of the ITAA 1936, which provides for the

taxation of certain residents in relation to non-resident trust estates;

c) Division 13 of Part III of the ITAA 1936, which deals with transfer

pricing;

d) Section 177E of Part IVA of the ITAA 1936, which addresses

dividend stripping arrangements;

e) Part X of the ITAA 1936, which provides for the taxation of certain

residents with interests in controlled foreign companies;

f) Part XI of the ITAA 1936, which provides for the taxation of certain

resident investors in foreign investment funds and foreign life

assurance policies;

g) Section 122-25 of Part 3-3 of Chapter 3 of the ITAA 1997, which does

not permit the deferral of tax arising on the transfer of an asset, where

the subsequent transfer of the asset by the transferee would be beyond

the taxing jurisdiction of Australia under its laws;

h) Part 3-90 of Chapter 3 of the ITAA 1997, which provides for

consolidation of group entities for treatment as a single entity for tax

purposes;

i) Division 820 of Part 4-5 of Chapter 4 of the ITAA 1997, which

addresses thin capitalisation; and

j) any provision adopted after the date of signature of the Convention

which is substantially similar in purpose or intent to a provision

covered by this paragraph, or is otherwise agreed between the

Governments of the Contracting States through an exchange of

diplomatic notes.




22. With reference to paragraph 1 of Article 28 (Exchange of Information)

of the Convention:

In the case of Australia, the term “taxes of every kind and description imposed

on behalf of the Contracting States” means taxes of every kind and description

imposed under the federal tax laws administered by the Commissioner of

Taxation.

23. It is understood that under paragraph 5 of Article 28 of the Convention

a refusal to supply information held by a bank, other financial institution,

nominee or person acting in an agency or a fiduciary capacity or information

relating to ownership interests must be based on reasons unrelated to the

person’s status as a bank, other financial institution, nominee, agent or

fiduciary, or the fact that the information relates to ownership interests. It is also

understood that under paragraph 5 of Article 28 a Contracting State may decline

to supply information relating to confidential communications between

attorneys, solicitors or other admitted legal representatives in their role as such

and their clients to the extent that the communications are protected from

disclosure under the domestic law of that Contracting State.



DONE in duplicate at Tokyo this thirty-first day of January, 2008, in the

English and Japanese languages, each text being equally authentic.

For Australia

For Japan

Hon. Stephen Smith



Hon. Masahiko Koumura





(Japanese Note)

Translation

Tokyo, 31 January, 2008 Excellency: I have the honour to refer to the Convention between Japan and Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which was signed today (hereinafter referred to as “the Convention”) and to the Protocol also signed today which forms an integral part of the Convention, and to make, on behalf of the Government of Japan, the following proposals: 1. It is understood that both Contracting States shall cooperate for the avoidance of double taxation through appropriate application of the provisions of the Convention and other necessary measures. 2. With reference to Article 9 (Associated Enterprises) of the Convention: It is understood that both Contracting States shall undertake to conduct transfer pricing examinations of enterprises and evaluate applications for advance pricing arrangements in accordance with the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations of the Organisation for Economic Cooperation and Development (hereinafter referred to as “the OECD Transfer Pricing Guidelines”), which reflect the international consensus with respect to these issues. The domestic transfer pricing rules, including the transfer pricing methods, of each Contracting State may be applied in resolving transfer pricing cases under the Convention only to the extent that they are consistent with the OECD Transfer Pricing Guidelines. His Excellency The Hon. Stephen Smith Minister for Foreign Affairs of Australia




3. With reference to paragraph 3 of Article 10 (Dividends) and subparagraph a) of paragraph 3 of Article 23 (Limitation on Benefits) of the Convention: It is understood that the date on which entitlement to the dividends is determined is: a) in the case of Japan, the end of the accounting period for which

the distribution of profits takes place; or b) in the case of Australia, the date the dividends are declared. If the foregoing understanding is acceptable to the Government of Australia, I have the honour to suggest that the present note and Your Excellency’s reply to that effect should be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the Convention. I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

Masahiko Koumura Minister for Foreign Affairs of Japan [Signature omitted]




(Australian Note)

Tokyo, 31 January, 2008

Excellency: I have the honour to acknowledge receipt of Your Excellency’s Note of today’s date which in translation reads as follows:

“(Japanese Note)”

The foregoing understanding being acceptable to the Government of Australia, I have the honour to confirm that Your Excellency’s Note and this reply shall be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of the Convention. I take this opportunity to extend to Your Excellency the assurance of my highest consideration.

Stephen Smith Minister for Foreign Affairs

of Australia [Signature omitted]

His Excellency Mr. Masahiko Koumura Minister for Foreign Affairs of Japan


Government of Italy for the Avoidance of Double Taxation of Income derived from

International Air Transport Schedule 8



Government of the Commonwealth of

Australia and the Government of Italy

for the Avoidance of Double Taxation

of Income derived from International

Air Transport Section 3

The Government of the Commonwealth of Australia and the Government of

Italy desiring to conclude an Agreement for the avoidance of double taxation of

income derived from international air transport,


ARTICLE 1

(1) The existing taxes to which the Agreement applies are—

(a) in Australia:



company, (hereinafter referred to as “Australian tax”);

(b) in Italy:

(i) the tax on income from movable wealth (imposta sui redditi di

ricchezza mobile);

(ii) the complementary tax (imposta complementare progressiva sul

reddito);

(iii) the tax on companies insofar as the tax is charged on income

and not on capital (imposta sulle societa’, per la parte che grava

sul reddito e non sul partrimonio); and

(iv) the taxes on income imposed on behalf of provinces,

municipalities and Chambers of commerce (imposte provinciali,

comunali e camerali sul reddito), (hereinafter referred to as

“Italian tax”).


and the Government of Italy for the Avoidance of Double Taxation of Income derived

from International Air Transport


(2) This Agreement shall also apply to any indentical or substantially

similar taxes which are imposed after the date of signature of this Agreement in

addition to, or in place of, the existing taxes.

ARTICLE 2

(1) In this Agreement, unless the context otherwise requires—

(a) the term “Australia” includes any Territory of or under the authority of

the Commonwealth of Australia and any Territory governed by it under

a Trusteeship Agreement;

(b) the term “Italy” means the Italian Republic;

(c) the terms “Contracting State” and “other Contracting State” mean

Australia or Italy, as the context requires;

(d) the term “Australian enterprise” means an enterprise that has its place of

effective management in Australia;

(e) the term “Italian enterprise” means an enterprise that has its place of

effective management in Italy;

(f) the term “enterprise of a Contracting State” means an Australian

enterprise or an Italian enterprise, as the context requires;

(g) the term “tax” means Australian tax or Italian tax, as the context

requires;

(h) the term “operation of aircraft in international traffic” means the

operation of aircraft for the carriage of persons, livestock, goods or mail

between—

(i) Australia and Italy;

(ii) Australia and any other country;

(iii) Italy and any other country;

(iv) countries other than Australia or Italy or places in any such

country,

and in respect of an enterprise engaged in such operations includes the

sale of tickets for, and the provision of services connected with, such

carriage, either for the enterprise itself or for any other enterprise

engaged in such operations.

(2) In the application of the provisions of this Agreement in one of the

Contracting States, any term used but not defined herein shall, unless the

context otherwise requires, have the meaning which it has under the laws in

force in that Contracting State relating to the taxes to which this Agreement

applies.


Government of Italy for the Avoidance of Double Taxation of Income derived from

International Air Transport Schedule 8


ARTICLE 3

(1) Profits derived by an enterprise of a Contracting State from the

operation of aircraft in international traffic or arising from the carriage by air of

persons, livestock, goods or mail between places in that Contracting State, shall

be exempt from tax in the other Contracting State.

(2) The exemption provided in paragraph 1 of this Article shall apply to a

share of the profits from the operation of aircraft in international traffic derived

by an enterprise of a Contracting State through participation in a pooled service,

in a joint air transport operation or in an international operating agency.

ARTICLE 4

(1) This Agreement shall be ratified and the instruments of ratification shall

be exchanged at Rome as soon as possible.

(2) This Agreement shall enter into force on the date of the exchange of the

instruments of ratification and its provisions shall have effect—

(a) in Australia, for the year of income that commenced on the first day of

July 1966 and subsequent years of income;

(b) in Italy, in respect of income assessable for any taxable period

commencing on or after the first day of January 1966.

ARTICLE 5

This Agreement shall continue in effect indefinitely but either Contracting

State may, on or before the thirtieth day of June in any calendar year after the

year 1973, give notice of termination to the other Contracting State and in such

event this Agreement shall cease to be effective—

(a) in Australia, for the year of income commencing on the first day of July


termination is given, and subsequent years of income; and

(b) in Italy, in respect of income assessable for any taxable period

commencing on or after the first day of January in the calendar year

next following that in which the notice of termination is given.


and the Government of Italy for the Avoidance of Double Taxation of Income derived

from International Air Transport



signed the present Agreement.

DONE in duplicate at Canberra the thirteenth day of April, 1972 in the

English and Italian languages, both texts being equally authoritative.

B. M. Snedden

For the Government

of the

Commonwealth of Australia

Paolo Canali

For the Government

of Italy

The Commonwealth of Australia and the Federal Republic of Germany Schedule 9


Schedule 9—The Commonwealth of Australia

and the Federal Republic of Germany Section 3

Desiring to conclude an Agreement for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income and capital and

to certain other taxes,


ARTICLE 1



ARTICLE 2

(1) The taxes to which this Agreement shall apply are—

(a) in Australia:



company;

(b) in the Federal Republic of Germany:

the Einkommensteuer (income tax) including the Ergänzungsabgabe

(surcharge) thereon;

the Körperschaftsteuer (corporation tax) including the

Ergänzungsabgabe (surcharge) thereon;

the Vermögensteuer (capital tax); and

the Gewerbesteuer (trade tax).

(2) This Agreement shall also apply to any identical or substantially similar

taxes, on income or capital, which are subsequently imposed under the law of

the Commonwealth of Australia or the law of the Federal Republic of Germany

in addition to, or in place of, the existing taxes.

(3) The provisions of this Agreement in respect of taxation of income or

capital shall, subject to Article 22, likewise apply to the German trade tax,

computed on a basis other than income or capital.

Schedule 9 The Commonwealth of Australia and the Federal Republic of Germany


ARTICLE 3


(a) the term ‘Australia’, when used in a geographical sense, means the

whole of the Commonwealth of Australia, and includes—






(vi) any area adjacent to the Commonwealth or to any of the said

Territories in respect of which there is for the time being in

force, consistently with international law, a law of the

Commonwealth or of a State or Territory of the Commonwealth

dealing with the exploitation of any of the natural resources of

the sea--bed and sub--soil of the continental shelf;

(b) the term ‘Federal Republic of Germany’, when used in a geographical

sense, means the territory in which the Basic Law for the Federal

Republic of Germany is in force, as well as any area adjacent to the

territorial waters of the Federal Republic of Germany designated, in

accordance with international law as related to the rights which the

Federal Republic of Germany may exercise with respect to the sea--bed

and sub--soil and their natural resources, as a domestic area for tax

purposes;

(c) the terms ‘Contracting State’ and ‘the other Contracting State’ mean

Australia or the Federal Republic of Germany, as the context requires;

(d) the term ‘person’ means an individual, a company and any other entity

subject to tax;

(e) the term ‘company’ means any body corporate or any entity which is

assimilated to a body corporate for tax purposes;

(f) the terms ‘enterprise of a Contracting State’ and ‘enterprise of the other

Contracting State’ mean an industrial or commercial enterprise carried

on by a resident of Australia or an industrial or commercial enterprise

carried on by a resident of the Federal Republic of Germany, as the

context requires;

(g) the term ‘tax’ means Australian tax or German tax, as the context

requires;



(h) the term ‘Australian tax’ means tax imposed under the law of the

Commonwealth of Australia, being tax to which this Agreement applies

by virtue of Article 2;

(i) the term ‘German tax’ means tax imposed under the law of the Federal

Republic of Germany, being tax to which this Agreement applies by

virtue of Article 2;

(j) the term ‘competent authority’ means, in the case of Australia, the


case of the Federal Republic of Germany, the Federal Minister of

Finance.

(2) As regards the application of this Agreement by a Contracting State,

any term not otherwise defined shall, unless the context otherwise requires,

have the meaning which it has under the laws of that Contracting State relating

to the taxes to which this Agreement applies.

ARTICLE 4

(1) For the purposes of this Agreement, a person is a resident of a

Contracting State if—

(a) where Australia is the Contracting State, the person is a resident of

Australia for the purposes of Australian tax and is not—

(i) by reason of his place of residence, not subject to Australian

tax; or

(ii) by that reason so subject only in relation to income from

sources in Australia;

(b) where the Federal Republic of Germany is the Contracting State, the

person is subject to unlimited tax liability in the Federal Republic of

Germany.


resident of both Contracting States, then his case shall be determined in


(a) he shall be deemed to be a resident of the Contracting State in which he

has a permanent home available to him;



them, he shall be deemed to be a resident of the Contracting State in

which he has an habitual abode, or where he has such habitual abode in

both Contracting States, or if he does not have such habitual abode in



either of them, he shall be deemed to be a resident of the Contracting

State with which his personal and economic relations are closest.


an individual is a resident of both Contracting States, then it shall be deemed to

be a resident of the Contracting State in which its place of effective


ARTICLE 5

(1) For the purposes of this Agreement the term ‘permanent establishment’

means a fixed place of business in which the business of the enterprise is wholly

or partly carried on.

(2) The term ‘permanent establishment’ shall include especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;


(g) land used for agricultural, pastoral or forestry purposes;













enterprise;




(4) A person acting in a Contracting State on behalf of an enterprise of the

other Contracting State—other than an agent of an independent status to whom



paragraph (5) applies—shall be deemed to be a permanent establishment of that

enterprise in the first--mentioned State—

(a) if he has, and habitually exercises in that State, an authority to conclude

contracts binding the enterprise, unless his activities are limited to the

purchase of goods or merchandise for the enterprise;

(b) if in so acting goods or merchandise belonging to the enterprise are

manufactured or processed by him in that State for the enterprise,

provided that this provision shall apply only in relation to the goods or

merchandise so manufactured or processed.

(5) An enterprise of a Contracting State shall not be deemed to have a


on business in that other State through a broker, general commission agent or

any other agent of an independent status, where that person is acting in the

ordinary course of his business as such a broker or agent.

(6) The fact that a company which is a resident of a Contracting State





ARTICLE 6

Income from real property situated in a Contracting State, including royalties

or similar payments in respect of the exploitation of mines, quarries or other

natural resources so situated, may be taxed in that State.

ARTICLE 7

(1) The profits of an enterprise of a Contracting State shall be taxable only

in that State unless the enterprise carries on business in the other Contracting

State through a permanent establishment situated therein. If the enterprise

carries on business as aforesaid, the profits of the enterprise may be taxed in the

other State but only so much of them as is attributable to that permanent

establishment.

(2) Where an enterprise of a Contracting State carries on business in the

other Contracting State through a permanent establishment situated therein,

there shall in each Contracting State be attributed to that permanent

establishment the profits which it might be expected to make if it were a distinct

and separate enterprise engaged in the same or similar activities under the same

or similar conditions and dealing wholly independently with the enterprise of



which it is a permanent establishment. In the determination of such profits there

shall be allowed as deductions expenses which are incurred for the purposes of

the permanent establishment, including executive and general administrative

expenses so incurred, whether in the State in which the permanent




the enterprise.


referred to in this paragraph, the profits of an enterprise do not include income

or profits dealt with in Articles 6, 8, 10, 11, 12, 13, 15 and 16.

ARTICLE 8

(1) A resident of a Contracting State shall be exempt from tax in the other

Contracting State on profits from the operation of ships or aircraft.

(2) Notwithstanding the provisions of paragraph (1), a resident of a

Contracting State may be taxed in the other Contracting State on profits from

operations of ships or aircraft confined solely to places in that other State.



of a Contracting State through participation in a pool service, in a joint transport

operating organisation or in an international operating agency.


ships or aircraft of passengers, livestock, mails, goods or merchandise shipped

in a Contracting State for discharge at another place in that State or, in the case

of Australia, at a place in the Territory of Papua or the Trust Territory of New

Guinea are profits from operations confined solely to places in that State.

(5) The amount which shall be charged to tax in a Contracting State as

profits from the operation of ships or aircraft in respect of which a resident of

the other Contracting State may be taxed in the first--mentioned State under

paragraph (2) or (3) shall not exceed 5 per cent of the amount paid or payable

(net of rebates) in respect of carriage in such operations.

(6) Paragraph (5) shall not apply to profits derived from the operation of

ships or aircraft by a resident of a Contracting State whose principal place of

business is in the the other Contracting State, nor shall it apply to profits derived

from the operation of ships or aircraft by a resident of a Contracting State if

those profits are derived otherwise than from the carriage of passengers,



livestock, mails, goods or merchandise. In such cases, the provisions of Article

7 shall apply but there shall be excluded from the profits on which any such

person is charged to Australian tax any amount of profits taxed in the Territory

of Papua or the Trust Territory of New Guinea.

ARTICLE 9

Where—

(a) an enterprise of a Contracting State participates directly or indirectly in

the management, control or capital of an enterprise of the other





and in either case conditions are operative between the two enterprises in their







ARTICLE 10

(1) Dividends paid by a company which is a resident of Australia for

purposes of Australian tax to a resident of the Federal Republic of Germany

may be taxed in Australia, but the tax so charged shall not exceed 15 per cent of

the gross amount of the dividends.

(2) Dividends paid by a company which is subject to unlimited tax liability

in the Federal Republic of Germany to a resident of Australia may be taxed in

the Federal Republic of Germany, but the tax so charged shall not exceed 15 per


(3) The term ‘dividends’ in this Article means income from shares and


Contracting State of which the company making the distribution is a resident,

and shall include, in the case of paragraph (2), the income of a sleeping partner

(stiller Gesellschafter) from his participation as such.

(4) The provisions of paragraphs (1) and (2) shall not apply if the recipient

of the dividends has in the Contracting State of which the company paying the

dividends is a resident a permanent establishment with which the holding by



virtue of which the dividends are paid is effectively connected. In such a case,


ARTICLE 11

(1) Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in the first--mentioned State, but the tax so

charged shall not exceed 10 per cent of the gross amount of the interest.

(2) The term ‘interest’ in this Article includes interest from Government






interest has in the Contracting State in which the interest arises a permanent

establishment with which the indebtedness from which the interest arises is

effectively connected. In such a case, the provisions of Article 7 shall apply.


is that Contracting State itself or a State or a Land of that Contracting State or a

political subdivision or local authority of that Contracting State or a person who


however, the person paying the interest, whether he is a resident of a

Contracting State or not, has in a State other than that of which he is a resident a

permanent establishment in connection with which the indebtedness on which

the interest is paid was incurred, and the interest is borne by the permanent

establishment, then the interest shall be deemed to arise in the State in which the

permanent establishment is situated.


recipient or between both of them and some other person, the amount of the

interest paid, having regard to the indebtedness for which it is paid, exceeds the

amount which might have been expected to have been agreed upon by the payer

and the recipient in the absence of such relationship, the provisions of this

Article shall apply only to the last--mentioned amount. In that case, the excess

part of the amount of the interest paid shall remain taxable according to the law

of each Contracting State, but subject to the other provisions of this Agreement.



ARTICLE 12

(1) Royalties arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in the first--mentioned State, but the tax

so charged shall not exceed 10 per cent of the gross amount of the royalties.

(2) The term ‘royalties’ in this Article means payments, whether periodical

or not, and however described and computed, to the extent to which they are

paid as consideration for the use of, or the right to use, any copyright, patent,

design or model, plan, secret formula or process, trade--mark, or other like

property or right, or industrial, commercial or scientific equipment, or for the

supply of scientific, technical, industrial or commercial knowledge or

information, or for the supply of any assistance connected with the supply of

such knowledge or information, and includes any payments to the extent to

which they are paid as consideration for the use of, or the right to use, motion

picture films, films or video tapes for use in connection with television or tapes

for use in connection with radio broadcasting.


royalties has in the Contracting State in which the royalties arise a permanent

establishment with which the asset giving rise to the royalties is effectively

connected. In such a case, the provisions of Article 7 shall apply.


is that Contracting State itself or a State or a Land of that Contracting State or a

political subdivision or local authority of that Contracting State or a person who


however, the person paying the royalties, whether he is a resident of a

Contracting State or not, has in a State other than that of which he is a resident a

permanent establishment in connection with which the liability to pay the

royalties was incurred, and the royalties are borne by the permanent

establishment, then the royalties shall be deemed to arise in the State in which

the permanent establishment is situated.


recipient or between both of them and some other person, the amount of the

royalties paid, having regard to what they are paid for, exceeds the amount

which might have been expected to have been agreed upon by the payer and the

recipient in the absence of such relationship, the provisions of this Article shall

apply only to the last--mentioned amount. In that case, the excess part of the

amount of the royalties paid shall remain taxable according to the law of each

Contracting State, but subject to the other provisions of this Agreement.



ARTICLE 13

Income derived by an individual who is a resident of a Contracting State in

respect of professional services or other independent activities of a similar

character shall be taxable only in that State unless he has a fixed base regularly

available to him in the other Contracting State for the purpose of performing his

activities. If he has such a fixed base, the income may be taxed in the other

State but only so much of it as is attributable to that fixed base.

ARTICLE 14

(1) Subject to the provisions of Articles 15, 17, 18 and 19, remuneration

derived by an individual who is a resident of a Contracting State in respect of an

employment shall be taxable only in that State unless the employment is

exercised in the other Contracting State. If the employment is so exercised, such

remuneration as is derived from that exercise may be taxed in that other State.


by an individual who is a resident of a Contracting State in respect of an

employment exercised in the other Contracting State shall, if—

(a) the period, or the aggregate of the periods, for which the recipient is

present in the other State in the year of income or the assessment

period, as the case may be, of the other State during which the

employment is exercised does not exceed 183 days;


resident of the other State; and

(c) the remuneration is not borne by a permanent establishment or a fixed

base which the employer has in the other State,

be taxable only in the first--mentioned State.




in that State.

ARTICLE 15

Directors’ fees and similar payments derived by a resident of a Contracting

State in his capacity as a member of the board of directors of a company which

is a resident of the other Contracting State may be taxed in that other State.



ARTICLE 16


by public entertainers (such as theatrical, motion picture, radio or television

artists and musicians and athletes) from their personal activities as such may be

taxed in the Contracting State in which these activities are exercised.

(2) Notwithstanding anything contained in this Agreement, where the

services of a public entertainer mentioned in paragraph (1) are provided in a

Contracting State by an enterprise of the other Contracting State, the profits

derived by that enterprise from providing those services may be taxed in the

first--mentioned State if the public entertainer performing the services controls,

directly or indirectly, that enterprise.

ARTICLE 17

(1) Remuneration (other than a pension or annuity) paid by the

Commonwealth of Australia, a State of the Commonwealth or a political

subdivision or local authority of the Commonwealth or of a State to any

individual in respect of an employment shall be taxable only in Australia. If,

however, the employment is exercised in the Federal Republic of Germany by

an individual who is a German citizen or is subject to unlimited tax liability in

the Federal Republic of Germany such remuneration shall be taxable only in the

Federal Republic of Germany.

(2) Remuneration (other than a pension or annuity) paid by the Federal

Republic of Germany, a Land or a political subdivision or local authority

thereof to any individual in respect of an employment shall be taxable only in

the Federal Republic of Germany. If, however, the employment is exercised in

Australia by an individual who is an Australian citizen or is ordinarily resident

in Australia such remuneration shall be taxable only in Australia.

(3) This Article shall not apply to remuneration in respect of an

employment exercised in connection with any trade or business carried on by a

Government, a political subdivision or an authority referred to in paragraphs (1)

or (2).

ARTICLE 18

Pensions and annuities paid to a resident of a Contracting State shall be




ARTICLE 19

(1) Remuneration which a professor or teacher who is a resident of a

Contracting State and who visits the other Contracting State for a period not

exceeding two years for the purpose of carrying out advanced study or research

or of teaching at a university, college, school or other educational institution

receives for those activities shall not be taxed in that other State.

(2) Payments which a student who is, or immediately before was, a resident

of a Contracting State and who is temporarily present in the other Contracting

State solely for the purpose of his education receives from sources outside that

other State for the purposes of his maintenance or education shall not be taxed


ARTICLE 20

Where a person, who by reason of the provisions of paragraph (1)of Article

4 is a resident of both Contracting States but by reason of the provisions of

paragraphs (2) or (3) of Article 4 is deemed for the purposes of this Agreement

to be a resident solely of one of the Contracting State, derives income—

(a) from sources in that Contracting State; or

(b) from sources outside both Contracting States,

that income shall be taxable only in that Contracting State.

ARTICLE 21

(1) Capital represented by real property may be taxed in the Contracting

State in which the property is situated.

(2) Capital represented by property, other than real property, forming part

of the business property of a permanent establishment of an enterprise, or by

property, other than real property, pertaining to a fixed base used for the

performance of professional services, may be taxed in the Contracting State in

which the permanent establishment or fixed base is situated.

(3) Capital represented by ships and aircraft operated in international traffic

by a resident of a Contracting State or by property, other than real property,

pertaining to the operation of such ships and aircraft, shall be taxable only in

that State.

ARTICLE 22

(1) Subject to any provisions of the law of Australia from time to time in

force regulating the allowance of a credit against Australian tax of tax paid in a



country outside Australia, German tax paid, whether directly or by deduction, in

respect of income derived by a person who is a resident of Australia from

sources in the Federal Republic of Germany (not including, in the case of a

dividend, tax paid in respect of the profits out of which the dividend is paid)

shall be allowed as a credit against Australian tax payable in respect of that

income.

(2) German tax shall be determined in the case of a resident of the Federal

Republic of Germany as follows:

(a) Unless the provisions of sub--paragraph (b) apply, there shall be

excluded from the basis upon which German tax is imposed, any item

of income from sources within Australia, and any item of capital falling

under paragraphs (1) and (2) of Article 21 and situated within Australia,

which, according to this Agreement, may be taxed in Australia. In the

determination of its rate of tax applicable to any item of income or

capital not so excluded, the Federal Republic of Germany will,

however, take into account the items of income and capital so excluded.

The first sentence of this sub--paragraph shall, in the case of income

from dividends, apply only to such dividends as are paid to a company

which is a resident of the Federal Republic of Germany by a company

which is a resident of Australia of which at least 25 per cent of the

voting shares or of the total shares issued are owned by the German

company. There shall also be excluded from the basis upon which

German tax is imposed any shareholding, the dividends on which it paid

would be excluded from the basis upon which tax is imposed according

to the immediately foregoing sentence.

(b) Subject to the provisions of German tax law regulating credit for

foreign tax, there shall be allowed as a credit against German tax on

income payable in respect of the following items of income the

Australian tax paid in accordance with this Agreement on those items of

income, namely—

(i) dividends to which sub--paragraph (a) does not apply;

(ii) profits from the operation of ships or aircraft which may be

taxed in Australia according to Article 8 and do not fall under

paragraph (6) of that Article;

(iii) interest to which paragraph (1) of Article 11 applies;

(iv) royalties to which paragraph (1) of Article 12 applies;

(v) remuneration to which Article 15 applies;

(vi) profits to which paragraph (2) of Article 16 applies;



(vii) any item of income not dealt with in the foregoing Articles of

this Agreement.

ARTICLE 23

(1) Where a resident of a Contracting State considers that the actions of one

or both of the Contracting States result or will result for him in taxation not in

accordance with this Agreement, he may, notwithstanding the remedies

provided by the national laws of those States, present his case to the competent

authority of the Contracting State of which he is a resident.

(2) The competent authority shall endeavour, if the objection appears to it

to be justified and if it is not itself able to arrive at an appropriate solution, to

resolve the case with the competent authority of the other Contracting State,

with a view to the avoidance of taxation not in accordance with this Agreement.

(3) The competent authorities of the Contracting States shall together

endeavour to resolve any difficulties or doubts arising as to the interpretation or

application of this Agreement.



the preceding paragraphs.

ARTICLE 24


information as is necessary for the carrying out of this Agreement or for the

prevention of fraud or for the administration of statutory provisions against

avoidance of the taxes which are the subject of this Agreement. Any

information so exchanged shall be treated as secret and shall not be disclosed to

any persons or authorities (including a court) other than those concerned with

the assessment or collection of the taxes which are the subject of this

Agreement, or the determination of appeals or the prosecution of offences in

relation thereto.







State;






policy.

ARTICLE 25

(1) Nothing in this Agreement shall affect diplomatic or consular privileges

under the general rules of international law or under the provisions of special

international agreements.

(2) Insofar as, due to such privileges granted to a person under the general

rules of international law or under the provisions of special international

agreements, income or capital is not subject to tax in the receiving State, the

right to tax shall be reserved to the sending State.

ARTICLE 26

This Agreement shall also apply to Land Berlin, provided that the

Government of the Federal Republic of Germany has not made a contrary

declaration to the Government of the Commonwealth of Australia within three

months from the date of entry into force of this Agreement.

ARTICLE 27

(1) This Agreement may be extended, either in its entirety or with

modifications, to any Territory for whose international relations Australia is

responsible, and which imposes taxes substantially similar in character to those

which are the subject of this Agreement, and any such extension shall take

effect from such date and subject to such modifications and conditions

(including conditions as to termination) as may be specified and agreed between

the Contracting States in Letters to be exchanged through diplomatic channels

for this purpose.

(2) The termination of this Agreement under Article 29 shall, unless

otherwise expressly agreed by both Contracting States, terminate the application

of this Agreement to any Territory to which it has been extended under this

Article.

ARTICLE 28


be exchanged at Bonn as soon as possible.



(2) This Agreement shall enter into force on the thirtieth day after the date

of exchange of the instruments of ratification and shall have effect—

(a) in both Contracting States, as respects any withholding tax on

dividends, interest and royalties derived on or after 1 July 1971;

(b) in Australia, as respects tax on income of any year of income beginning

on or after 1 July 1971;

(c) in the Federal Republic of Germany, as respects taxes which are levied

for the assessment period 1971 and for subsequent assessment periods.

ARTICLE 29

This Agreement shall continue in effect indefinitely but either of the

Contracting States may, on or before the thirtieth day of June in any calendar

year, give to the other Contracting State, through diplomatic channels, written

notice of termination and, in that event, this Agreement shall cease to be

effective—

(a) in both Contracting States, as respects any withholding tax on

dividends, interest and royalties derived on or after 1 July in the

calendar year next following that in which the notice of termination is

given;

(b) in Australia, as respects tax on income of any year of income beginning

on or after 1 July in the calendar year next following that in which the

notice of termination is given;

(c) in the Federal Republic of Germany, as respects taxes which are levied

for the assessment period next following that in which the notice of

termination is given, and for subsequent assessment periods.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by

their respective Governments, have signed this Agreement.

DONE at Melbourne this twenty--fourth day of November 1972, in four

originals, two in the English language and two in the German language, all texts

being equally authentic.

B. M. SNEDDEN HEINZ VOIGT

FOR THE COMMONWEALTH

OF AUSTRALIA

FOR THE FEDERAL REPUBLIC

OF GERMANY



PROTOCOL

THE COMMONWEALTH OF AUSTRALIA AND THE FEDERAL

REPUBLIC OF GERMANY

HAVE AGREED AT THE SIGNING of the Agreement between the two

States for the avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income and capital and to certain other taxes upon the

following provisions which shall form an integral part of the said Agreement.

(1) With reference to Article 5,

an enterprise shall be deemed to have a permanent establishment in a


establishement if it carries on supervisory activities in that State for

more than six months in connection with a building site, or a

construction, installation or assembly project which is being undertaken

in that State.


income from real property shall be taken to include income from leases

of land.

(3) With reference to Articles 6 to 8 and 10 to 16,

income derived by a resident of the Federal Republic of Germany

which, under Articles 6 to 8 and 10 to 16 of the Agreement, may be

taxed in Australia may be deemed, for the purposes of the

Commonwealth income tax law, to be income from sources in

Australia.


(a) insofar as it is customary in a Contracting State, in determining the

profits to be attributed to a permanent establishment, to do so on the

basis of an apportionment of the total profits of the enterprise to its

various parts, that method may be adopted for the purpose of the

application of Article 7 of the Agreement, provided that it shall be

applied in such a way that the result accords with the principles stated in

that Article.

(b) Article 7 of the Agreement shall not apply to profits of an enterprise

from carrying on a business of any form of insurance, other than life

insurance.

(5) With reference to Articles 7 and 9,

where the information available to the competent authority of a

Contracting State is inadequate to determine the profits of an enterprise



on which tax may be imposed in that State in accordance with Article 7

or Article 9 of the Agreement, nothing in those Articles shall prevent

the application to that enterprise of any law of that State making

provision for determining the tax liability of an enterprise in special

circumstances, provided that that law shall be applied, so far as the

information available to the competent authority permits, in accordance

with the principles applicable under Articles 7 and 9.


notwithstanding the provisions of paragraph (2) of Article 10 of the

Agreement German tax on dividends to which that paragraph applies

paid to a company which is a resident of Australia by a company which

is a resident of the Federal Republic of Germany, at least 25 per cent of

the capital of which is held directly or indirectly by the Australian

company itself, or by it together with other persons controlling it or

being under common control with it, may be charged at a rate not

exceeding 25.75 per cent of the gross amount of the dividends if the rate

of German corporation tax on distributed profits is lower than that on

undistributed profits and the difference between those two rates is 20

percentage points or more.

(7) With reference to Articles 10 to 12,

the references in Articles 10 to 12 of the Agreement to dividends,

interest or royalties paid to a resident of a Contracting State refer to

dividends, interest or royalties to which a resident of the Federal

Republic of Germany is beneficially entitled, and to dividends, interest

or royalties to which a resident of Australia is entitled

(bezugsberechtigt), being economically the owner (wirtschaftlicher

Eigentumer) of the assets on which the dividends, interest or royalties

are paid, as the case may be.

(8) With reference to Articles 10 to 12 and 22,

for the purposes of Articles 10 to 12 and of paragraph (1) and

sub--paragraph (b) of paragraph (2) of Article 22 of the Agreement the

term ‘tax’ does not include any amount which represents a penalty or

interest relating to the taxes to which the Agreement applies, imposed

under the law in force in Australia or in the Federal Republic of

Germany.


interest derived by the Government of a Contracting State, or by any

other body exercising governmental functions in, or in a part of, a



Contracting State, or by a bank performing central banking functions in

a Contracting State, shall be exempt from tax in the other Contracting

State.


(a) where income derived by a resident of a Contracting State may, under

the provisions of Articles 6 to 8 and 10 to 16 of the Agreement, be

taxed, even at a limited rate, in the other Contracting State, such income

shall for the purposes of Article 22 of the Agreement be considered to

be income from sources in that other State;

(b) for the purposes of paragraph (1) of Article 22 of the Agreement the

term ‘German tax’ shall include German trade tax only where it is

levied on a basis other than capital or pay--roll;

(c) for the purposes of sub--paragraph (a) of paragraph (2) of Article 22 of

the Agreement, the term ‘Australia’ does not, in relation to an item of

income derived by a resident of the Federal Republic of Germany from

sources in a Territory or area referred to in sub--paragraph (a) (i) to (vi)

of paragraph (1) of Article 3, include that area if Australian tax does not

apply in relation to such income;

(d) sub--paragraph (a) of paragraph (2) of Article 22 of the Agreement shall

apply to the profits of a permanent establishment or to dividends paid

by a company only if the profits of the permanent establishement or the

income of the company are derived exclusively or almost exclusively—

(i) from producing, manufacturing or processing goods or from

similar activities, the exploration for or exploitation or

treatment of minerals, quarrying, primary production, building,

construction or assembly, transport, storage or communication,

giving advice or rendering services, leasing or renting, banking,

hire--purchase or money--lending or insurance, within

Australia, selling goods or merchandise within or from

Australia, or such other activities as may be agreed by the

Contracting States in Letters to be exchanged for this purpose;

or



(ii) from dividends paid by one or more companies, being residents

of Australia, of which at least 25 per cent of the voting shares or

of the total shares issued are owned by the first--mentioned

company, which themselves derive their income exclusively or

almost exclusively from the activities referred to in (i).

If these conditions are not met, subparagraph (b) of paragraph (2) of

Article 22 of the Agreement shall extend to and shall apply both to the

income and capital concerned;

(e) where, as long as German trade tax is levied on income, Australian tax

paid in accordance with the Agreement on dividends, interest or

royalties derived from Australia exceeds the corresponding German

income or corporation tax against which credit is to be given by virtue

of sub--paragraph (b) of paragraph (2) of Article 22 of the Agreement,

there shall be deducted from such income, when computing the basis of

the trade tax, such part of that income as corresponds to the ratio

between the excess amount of Australian tax and the total amount of

Australian tax, paid in accordance with the Agreement.

(11) General

(a) in the event that Australia should cease to allow a company which is a

resident of Australia a rebate in its assessment at the average rate of tax

payable by the company in respect of dividends derived from sources in

the Federal Republic of Germany and included in the taxable income of

the company, the Commonwealth of Australia will immediately advise

the Federal Republic of Germany of the change and enter into

negotiations with the Federal Republic of Germany in order to establish

new provisions concerning the credit to be allowed by Australia against

its tax on the dividends;

(b) in the event that the Federal Republic of Germany, in relation to

dividends received by one company from another company, should

reduce in its corporation tax law or in an agreement for the avoidance of

double taxation with another country the percentage shareholding

entitling the receiving company to relief from German corporation tax,

the Federal Republic of Germany will immediately advise the

Commonwealth of Australia of the reduction and enter into negotiations

with the Commonwealth in order to introduce such lower percentage

test into the Agreement;

(c) unless the context of the Agreement and of this Protocol otherwise

requires, words in the singular include the plural and words in the plural

include the singular.



DONE at Melbourne on the twenty--fourth day of November 1972, in four

originals, two in the English language and two in the German language, all texts


B. M. SNEDDEN HEINZ VOIGT

FOR THE COMMONWEALTH OF

AUSTRALIA

FOR THE FEDERAL REPUBLIC

OF GERMANY

Schedule 10 Agreement between Australia and the Kingdom of the Netherlands for the


Taxes on Income


Schedule 10—Agreement between Australia

and the Kingdom of the Netherlands


and the Prevention of Fiscal Evasion

with respect to Taxes on Income Section 3

The Government of Australia and the Government of the Kingdom of the

Netherlands,




CHAPTER I

SCOPE OF THE AGREEMENT

ARTICLE 1

Personal Scope


the States.

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Agreement shall apply are—

(a) in Australia:



(b) in the Netherlands:

the Inkomstenbelasting (income tax);

the Loonbelasting (wages tax);

the Vennootschapsbelasting (corporation tax);

Agreement between Australia and the Kingdom of the Netherlands for the Avoidance of


Schedule 10


the Dividendbelasting (dividend tax).


taxes which are imposed by one of the States after the date of signature of this

Agreement in addition to, or in place of, the existing taxes. At the end of each

calendar year, the competent authority of each State shall notify the competent

authority of the other State of any substantial changes which have been made in

the taxation laws of his State to which this Agreement applies.

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

(1) In this Agreement, unless the context otherwise requires:


used in a geographical sense, includes—






(vi) any area adjacent to the territorial limits of Australia and the


force, consistently with international law, a law of Australia or

of a State or part of Australia or of a Territory aforesaid dealing


sea--bed and sub--soil of the continental shelf;

(b) the term “the Netherlands” means that part of the Kingdom of the

Netherlands that is situated in Europe and the part of the seabed and its

sub--soil under the North Sea over which the Kingdom of the

Netherlands has sovereign rights in accordance with international law;

(c) the terms “State”, “one of the States” and “other State” mean Australia

or the Netherlands, as the context requires;

(d) the term “person” means an individual, a company and any other body

of persons;


assimilated to a body corporate for tax puroses;



Taxes on Income


(f) the term “tax” means Australian tax or Netherlands tax, as the context

requires;

(g) the term “Australian tax” means tax imposed by Australia, being tax to


(h) the term “Netherlands tax” means tax imposed by the Netherlands,

being tax to which this Agreement applies by virtue of Article 2;

(i) the term “competent authority” means, in the case of Australia, the

Commissioner of Taxation or his authorised representative, and in the

case of the Netherlands, the Minister of Finance or his authorised

representative;

(j) the terms “enterprise of one of the States” and “enterprise of the other

State” mean an enterprise carried on by a resident of Australia or an

enterprise carried on by a resident of the Netherlands, as the context

requires;


the singular.

(2) In this Agreement, the terms “Australian tax” and “Netherlands tax” do

not include any penalty or interest imposed under the law of either State relating

to the taxes to which this Agreement applies by virtue of Article 2.

(3) As regards the application of this Agreement by either of the States, any

term not otherwise defined shall, unless the context otherwise requires, have the

meaning which it has under the laws of that State relating to the taxes to which

this Agreement applies.

ARTICLE 4

Residence

(1) For the purposes of this Agreement, a person is a resident of one of the

States—

(a) in the case of Australia, subject to paragraph (2), if the person is a

resident of Australia for the purposes of Australian tax; and

(b) in the case of the Netherlands, if the person is a resident of the

Netherlands for the purposes of Netherlands tax but not if he is liable to

tax in the Netherlands in respect only of income from sources therein.

(2) In relation to income from sources in the Netherlands, a person who is

subject to Australian tax on income which is from sources in Australia shall not

be treated as a resident of Australia unless the income from sources in the



Schedule 10


Netherlands is subject to Australian tax or, if that income is exempt from

Australian tax, it is so exempt solely because it is subject to Netherlands tax.


resident of both States, then his status shall be determined in accordance with

the following rules:

(a) he shall be deemed to be a resident solely of the State in which he has a

permanent home available to him;

(b) if he has a permanent home available to him in both States, or if he does

not have a permanent home available to him in either of them, he shall

be deemed to be a resident solely of the State with which his personal

and economic relations are the closer.


an individual is a resident of both States, then it shall be deemed to be a resident

solely of the State in which its place of effective management is situated.

ARTICLE 5


(1) For the purposes of this Agreement the term “permanent establishment”



(2) The term “permanent establishment” shall include especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;











Taxes on Income








enterprise;





of the States and to carry on business through that permanent establishment if—






or the exploitation of, natural resources, or in activities connected with


(5) A person acting in one of the States on behalf of an enterprise of the

other State—other than an agent of an independent status to whom


enterprise in the first--mentioned State if—





goods or merchandise belonging to the enterprise, provided that this

provision shall apply only in relation to the goods or merchandise so

manufactured or processed.

(6) An enterprise of one of the States shall not be deemed to have a

permanent establishment in the other State merely because it carries on business

in that other State through a broker, general commission agent or any other

agent of an independent status, where that person is acting in the ordinary

course of his business as such a broker or agent.

(7) The fact that a company which is a resident of one of the States controls

or is controlled by a company which is a resident of the other State, or which



Schedule 10


carries on business in that other State (whether through a permanent

establishment or otherwise) shall not of itself make either company a permanent

establishment of the other.


applied in determining for the purposes of this Agreement whether there is a

permanent establishment outside both States, and whether an enterprise, not

being an enterprise of one of the States, has a permanent establishment in one of

the States.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6




resource, may be taxed in the State in which the real property, mines, quarries,

or natural resources are situated.

(2) Income from a lease of land and income from any other direct interest

in or over land, whether or not improved, shall be regarded as income from real

property. Income from debt--claims of every kind, excluding bonds or

debentures, secured by mortgage of real property or of any other direct interest

in or over land, shall also be regarded as income from real property. However,

income from ships, boats or aircraft shall not be regarded as income from real

property.




ARTICLE 7

Business Profits

(1) The profits of an enterprise of one of the States shall be taxable only in

that State unless the enterprise carries on business in the other State through a

permanent establishment situated therein. If the enterprise carries on business as

aforesaid, the profits of the enterprise may be taxed in the other State, but only

so much of them as is attributable to that permanent establishment.



Taxes on Income



the States carries on business in the other State through a permanent

establishment situated therein, there shall in each State be attributed to that

permanent establishment the profits which it might be expected to make if it

were a distinct and separate enterprise engaged in the same or similar activities

under the same or similar conditions and dealing wholly independently with the

enterprise of which it is a permanent establishment or with other enterprises

with which it deals.


shall be allowed as deductions expenses of the enterprise, which are incurred for

the purposes of the permanent establishment (including executive and general

administrative expenses so incurred) and which would be deductible if the

permanent establishment were an independent entity which paid those expenses,

whether incurred in the State in which the permanent establishment is situated

or elsewhere.



the enterprise.



income dealt with in Articles 6, 8, 10, 11, 12, 13, 14, 16 and 17.

ARTICLE 8



one of the States shall be taxable only in that State.


taxed in the other State where they are profits from operations of ships or




of a State through participation in a pool service, in a joint transport operating

organisation or in an international operating agency.

(4) For the purposes of this Article, profits derived from the carriage of

passengers, livestock, mail, goods or merchandise shipped in a State for



Schedule 10


discharge at another place in that State shall be treated as profits from

operations of ships or aircraft confined solely to places in that State.

(5) The amount which shall be charged to tax in one of the States as profits

from the operation of ships or aircraft in respect of which a resident of the other

State may be taxed in the first--mentioned State under paragraph (2) or (3) shall

not exceed 5 per cent of the amount paid or payable (net of rebates) in respect of

carriage in such operations.


ships or aircraft by a resident of one of the States whose principal place of

business is in the other State, nor shall it apply to profits derived from the

operation of ships or aircraft by a resident of a State if those profits are derived

otherwise than from the carriage of passengers, livestock, mail, goods or

merchandise.

ARTICLE 9


(1) Where—

(a) an enterprise of one of the States participates directly or indirectly in the

management, control or capital of an enterprise of the other State; or


control or capital of an enterprise of one of the States and an enterprise

of the other State,








(2) Where profits on which an enterprise of one of the States has been

charged to tax in that State are also included, by virtue of paragraph (1), in the

profits of an enterprise of the other State and taxed accordingly, and the profits

so included are profits which might have been expected to have accrued to the

enterprise of the other State if the conditions operative between the enterprises

had been those which might have been expected to have operated between

independent enterprises dealing wholly independently with one another, then

the first--mentioned State shall make an appropriate adjustment to the amount



Taxes on Income


of tax charged on those profits in the first--mentioned State. In determining such

an adjustment due regard shall be had to the other provisions of this Agreement

in relation to the nature of the income, and for this purpose the competent

authorities of the States shall if necessary consult each other.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of one of the States

for the purposes of its tax, being dividends to which a resident of the other State

is beneficially entitled, may be taxed in that other State.

(2) Such dividends may be taxed in the State of which the company paying

the dividends is a resident for the purposes of its tax, and according to the law

of that State, but the tax so charged shall not exceed 15 per cent of the gross

amount of the dividends. 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) The term “dividends” in this Article means—

(a) in the case of Australia, income from shares and other income

assimilated to income from shares by the taxation law of Australia; and

(b) in the case of the Netherlands, income which is subject to dividend tax.


beneficially entitled to the dividends, being a resident of one of the States,

carries on business through a permanent establishment situated in the other

State, being the State of which the company paying the dividends is a resident,

and the holding in respect of which the dividends are paid is effectively

connected with that permanent establishment. In such a case, the provisions of

Article 7 shall apply.

(5) Dividends paid by a company which is a resident of one of the States,

being dividends to which a person who is not a resident of the other State is

beneficially entitled, shall be exempt from tax in that other State except insofar

as the holding in respect of which the dividends are paid is effectively

connected with a permanent establishment situated in that other State. Provided

that this paragraph shall not apply in relation to dividends paid by any company

which is a resident of Australia for the purposes of Australian tax and which is

also a resident of the Netherlands for the purposes of Netherlands tax.



Schedule 10


ARTICLE 11

Interest

(1) Interest arising in one of the States, being interest to which a resident of

the other State is beneficially entitled, may be taxed in that other State.

(2) Such interest may be taxed in the State in which it arises, and according

to the law of that State, but the tax so charged shall not exceed 10 per cent of

the gross amount of the interest.


securities, or from bonds or debentures, and interest from any other form of

indebtedness as well as all the income assimilated to interest by the taxation law

of the State in which the income arises. The term does not include income to

which Article 6 or Article 10 applies.


beneficially entitled to the interest, being a resident of one of the States, carries

on business through a permanent establishment situated in the other State, being

the State in which the interest arises, and the indebtedness giving rise to the

interest is effectively connected with that permanent establishment. In such a

case, the provisions of Article 7 shall apply.

(5) Interest shall be deemed to arise in a State when the payer is that State

itself or a political sub--division of that State or a local authority of that State or

a person who is a resident of that State. Where, however—

(a) the person paying the interest is a resident of one of the States and has

in the other State or outside both States a permanent establishment in

connection with which the indebtedness on which the interest is paid

was incurred, and the interest is borne by the permanent establishment,

then the interest shall be deemed to arise where the permanent

establishment is situated;

(b) the person paying the interest is not a resident of either of the States but

has in one of the States a permanent establishment in connection with

which the indebtedness on which the interest is paid was incurred, and

the interest is borne by the permanent establishment, then the interest

shall be deemed to arise where the permanent establishment is situated.







Taxes on Income





interest paid shall remain taxable according to the law of each of the States, but

subject to the other provisions of this Agreement.

ARTICLE 12

Royalties

(1) Royalties arising in one of the States, being royalties to which a resident

of the other State is beneficially entitled, may be taxed in that other State.

(2) Such royalties may be taxed in the State in which they arise, and


cent of the gross amount of the royalties.

(3) The term “royalties” in this Article means payments, whether periodical

or not, and however described or computed, to the extent to which they are paid

as consideration for the use of, or the right to use, any copyright, patent, design

or model, plan, secret formula or process, trade--mark, or other like property or

right, or industrial, commercial or scientific equipment, or for the supply of

scientific, technical, industrial or commercial knowledge or information, or for

the supply of any assistance of an ancillary and subsidiary nature furnished as a

means of enabling the application or enjoyment of such knowledge or

information or any other property or right to which this Article applies, and

includes any payments to the extent to which they are paid as consideration for

the use of, or the right to use, motion picture films, films or video tapes for use

in connection with television or tapes for use in connection with radio

broadcasting.


beneficially entitled to the royalties, being a resident of one of the States, carries

on business through a permanent establishment situated in the other State, being

the State in which the royalties arise, and the asset giving rise to the royalties is

effectively connected with that permanent establishment. In such a case, the

provisions of Article 7 shall apply.

(5) Royalties shall be deemed to arise in a State when the payer is that State

itself or a political sub--division of that State or a local authority of that State or

a person who is a resident of that State. Where, however—

(a) the person paying the royalties is a resident of one of the States and has

in the other State or outside both States a permanent establishment in



Schedule 10


connection with which the liability to pay the royalties was incurred,

and the royalties are borne by the permanent establishment, then the

royalties shall be deemed to arise where the permanent establishment is

situated;

(b) the person paying the royalties is not a resident of either of the States

but has in one of the States a permanent establishment in connection

with which the liability to pay the royalties was incurred, and the

royalties are borne by the permanent establishment, then the royalties

shall be deemed to arise where the permanent establishment is situated.



other person, the amount of the royalties paid, having regard to what they are





royalties paid shall remain taxable according to the law of each of the States,

but subject to the other provisions of this Agreement.

ARTICLE 13


(1) Income from the alienation of real property may be taxed in the State in

which that property is situated.

(2) For the purposes of this Article

(a) the term “real property” shall include—

(i) a lease of land or any other direct interest in or over land;

(ii) rights to exploit, or to explore for, natural resources; and

(iii) shares or comparable interests in a company, the assets of

which consist wholly or principally of direct interests in or over

land in one of the States or of rights to exploit, or to explore for,

natural resources in one of the States.

(b) real property shall be deemed to be situated—

(i) where it consists of direct interests in or over land—in the State

in which the land is situated;

(ii) where it consists of rights to exploit, or to explore for, natural

resources—in the State in which the natural resources are

situated or the exploration may take place; and



Taxes on Income


(iii) where it consists of shares or comparable interests in a

company, the assets of which consist wholly or principally of

direct interests in or over land in one of the States or of rights to

exploit, or to explore for, natural resources in one of the

States—in the State in which the assets or the principal assets of

the company are situated.

(3) Gains from the alienation of shares or “jouissance” rights in a company

the capital of which is wholly or partly divided into shares and which is a

resident of the Netherlands for the purposes of Netherlands tax, derived by an

individual who is a resident of Australia, may be taxed in the Netherlands.

ARTICLE 14


Income derived by an individual who is a resident of one of the States in



available to him in the other State for the purpose of performing his activities. If

he has such a fixed base, the income may be taxed in the other State, but only so

much of it as is attributable to that fixed base.

ARTICLE 15


(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages

and other similar remuneration derived by a resident of one of the States in

respect of an employment shall be taxable only in that State unless the

employment is exercised in the other State. If the employment is so exercised,

such remuneration as is derived from that exercise may be taxed in that other

State.


by a resident of one of the States in respect of an employment exercised in the

other State shall be taxable only in the first--mentioned State if—


exceeding in the aggregate 183 days in the year of income or the fiscal

year, as the case may be, of that other State; and





Schedule 10


(c) the remuneration is not deductible in determining the taxable profits of

a permanent establishment or a fixed base which the employer has in

that other State.


derived by a resident of one of the States in respect of an employment exercised

aboard a ship or aircraft in international traffic shall be taxable only in that

State.

ARTICLE 16

Directors’ Remuneration

(1) Where a resident of the Netherlands is a “director” of a company, which

is a resident of Australia, and derives from that company fees and other

remuneration in respect of his services to the company, such fees and other

remuneration may be taxed in Australia.

(2) Where a resident of Australia is a “bestuurder” or a “commissaris” of a

company, which is a resident of the Netherlands, and derives from that

company fees and other remuneration in respect of his services to the company,

such fees and other remuneration may be taxed in the Netherlands.

(3) Where the remuneration mentioned in paragraph (1) or (2) is derived by

a person who exercises activities of a regular and substantial character in a

permanent establishment situated in the State other than the State of which the

company is a resident and the remuneration is deductible in determining the

taxable profits of that permanent establishment then, notwithstanding the

provisions of paragraph (1) or (2) of this Article, the remuneration, to the extent

to which it is so deductible, shall be taxable only in the State in which the


ARTICLE 17

Entertainers


by entertainers (such as theatrical, motion picture, radio or television artistes,


in the State in which these activities are exercised.

(2) Notwithstanding anything contained in Articles 5 and 7, where the

services of an entertainer mentioned in paragraph (1) are provided in one of the

States by an enterprise of the other State, the profits derived by that enterprise



Taxes on Income


from providing those services may be taxed in the first--mentioned State if the

entertainer performing the services or a relative of such person, controls,

directly or indirectly, that enterprise.

(3) The term “relative” in this Article means a brother, sister, spouse,

ancestor or descendant.

ARTICLE 18


(1) Pensions, including pensions provided under the provisions of a public

social security system, but not including pensions to which Article 19 applies,

paid to a resident of one of the States, and annuities so paid, shall be taxable

only in that State.

(2) The term “annuity” means a stated sum payable periodically at stated

times during life or during a specified or ascertainable period of time under an



ARTICLE 19

Government Service

(1) Remuneration (including a pension) paid to any individual in respect of

services rendered in the discharge of governmental functions to one of the

States or to a political sub--division of one of the States or to a local authority of

one of the State may be taxed in that State. However, any such remuneration,

not being a pension, shall be taxable only in the other State if the services are

rendered in that other State and the recipient is a resident of that other State

who—

(a) is a citizen or national of that State; or



(2) This Article shall not apply to remuneration (including a pension) in


by one of the States or a political sub--division of one of the States or a local

authority of one of the States. In such a case, the provisions of Articles 15, 16

and 18 shall apply.



Schedule 10


ARTICLE 20

Professors and Teachers

(1) Remuneration which a professor or teacher who is a resident of one of

the States and who visits the other State for a period not exceeding two years for

the purpose of teaching or carrying out advanced study or research at a

university, college, school or other educational institution, receives for those

activities shall be taxable only in the first--mentioned State.

(2) This Article shall not apply to remuneration which he receives for

conducting research if the research is undertaken primarily for the private

benefit of a specific person or persons.

ARTICLE 21

Students

Payments which a student who is, or was immediately before visiting one of

the States, a resident of the other State and who is temporarily present in the

first--mentioned State solely for the purpose of his education receives from

sources outside that first--mentioned State for the purpose of his maintenance or

education shall be exempt from tax in that first--mentioned State.

ARTICLE 22

Income of Dual Resident

Where a person, who by reason of the provisions of paragraph (1) of Article

4 is a resident of both States but by reason of the provisions of paragraph (3) or

(4) of that Article is deemed for the purposes of this Agreement to be a resident

solely of one of the States, derives income from sources in that State or from

sources outside both States, that income shall be taxable only in that State.

CHAPTER IV

METHODS OF ELIMINATION OF DOUBLE TAXATION

ARTICLE 23




hereof), Netherlands tax paid, whether directly or by deduction, in respect of

income derived by a person who is a resident of Australia from sources in the



Taxes on Income


Netherlands (not including, in the case of a dividend, tax paid in respect of the



(2) The Netherlands, when imposing tax on its residents, may include in the

basis upon which such taxes are imposed the items of income which according

to the provisions of this Agreement may be taxed in Australia.

(3) Without prejudice to the application of the provisions concerning the

compensation of losses in the unilateral regulations for the avoidance of double

taxation the Netherlands shall allow a deduction from the amount of tax

computed in conformity with paragraph (2) of this Article equal to such part of

that tax which bears the same proportion to the aforesaid tax, as the part of the

income which is included in the basis mentioned in paragraph (2) of this Article

and may be taxed in Australia according to Articles 6 and 7, paragraphs (2) and

(3) of Article 8, paragraph (4) of Article 10, paragraph (4) of Article 11,

paragraph (4) of Article 12, paragraph (1) of Article 13, Article 14,

paragraph (1) of Article 15, paragraph (1) of Article 16 and Article 19 of this

Agreement bears to the total income which forms the basis mentioned in

paragraph (2) of this Article.

Further, the Netherlands shall allow a deduction from the Netherlands tax so

computed for such items of income, as may be taxed in Australia according to

paragraph (2) of Article 10, paragraph (2) of Article 11, paragraph (2) of Article

12 and Article 17, and are included in the basis mentioned in paragraph (2) of

this Article. The amount of this deduction shall be the lesser of the following

amounts:

(a) the amount equal to the Australian tax;

(b) the amount of the Netherlands tax which bears the same proportion to

the amount of tax computed in conformity with paragraph (2) of this

Article, as the amount of the said items of income bears to the amount

of income which forms the basis mentioned in paragraph (2) of this

Article.



Schedule 10


CHAPTER V

SPECIAL PROVISIONS

ARTICLE 24


(1) Where a resident of a State considers that the actions of the competent

authority of one or both of the States result or will result for him in taxation not

in accordance with this Agreement, he may, notwithstanding the remedies


authority of the State of which he is a resident. The case must be presented

within three years from the first notification of the action.



solution, to resolve the case with the competent authority of the other State,

with a view to the avoidance of taxation not in accordance with this Agreement.

The solution so reached shall be implemented notwithstanding any time limits

in the national laws of the States.

(3) The competent authorities of the States shall jointly endeavour to

resolve any difficulties or doubts arising as to the interpretation or application

of this Agreement.

(4) The competent authorities of the States may communicate with each

other directly for the purpose of giving effect to the provisions of this

Agreement.

ARTICLE 25


(1) The competent authorities of the States shall exchange such information

as is necessary for the carrying out of this Agreement or of the domestic laws of

the States concerning the taxes to which this Agreement applies insofar as the

taxation thereunder is not contrary to this Agreement. The exchange of

information is not restricted by Article 1. Any information received by the

competent authority of a State shall be treated as secret in the same manner as

information obtained under the domestic laws of that State and shall be

disclosed only to persons or authorities (including courts and administrative

bodies) concerned with the assessment or collection of, enforcement or

prosecution in respect of, or the determination of appeals in relation to, the taxes

to which this Agreement applies and shall be used only for such purposes.



Taxes on Income



impose on a State the obligation—


administrative practice of that or of the other State;


normal course of the administration of that or of the other State;

(c) to supply information which would diclose any trade, business,



policy.

ARTICLE 26


Nothing in this Agreement shall affect the fiscal privileges of diplomatic or

consular officials under the general rules of international law or under the

provisions of special agreements.

ARTICLE 27

Regulations

The competent authority of the Netherlands may prescribe regulations

necessary to carry out in the Netherlands the provisions of this Agreement.

ARTICLE 28

Territorial Extension

(1) This Agreement may be extended, either in its entirety or with any

necessary modifications, to the part of the Kingdom of the Netherlands which is

not situated in Europe and which imposes taxes substantially similar in

character to those to which this Agreement applies. Any such extension shall

take effect from such date and subject to such modifications and conditions,

including conditions as to termination, as may be specified and agreed in notes

to be exchanged through the diplomatic channel.

(2) Unless otherwise agreed, the termination of this Agreement shall not

also terminate the application of the Agreement to the part of the Kingdom of

the Netherlands to which it has been extended under this Article.



Schedule 10


CHAPTER VI

FINAL PROVISIONS

ARTICLE 29

Entry into Force

This Agreement shall come into force on the date on which the Government

of Australia and the Government of the Kingdom of the Netherlands exchange

notes through the diplomatic channel notifying each other that the last of such

things has been done as is necessary to give this Agreement the force of law in

Australia and in the Netherlands, as the case may be, and thereupon this

Agreement shall have effect—

(a) in both States, in respect of withholding tax on dividends and interest,

on dividends and interest derived on or after 1 July 1975;

(b) in Australia, in respect of tax on income of any year of income

beginning on or after 1 July 1975;

(c) in the Netherlands, in respect of taxes, other than the dividend tax, for

taxable years and periods beginning on or after 1 January 1975

ARTICLE 30

Termination

This Agreement shall continue in effect indefinitely, but the Government of

Australia or the Government of the Kingdom of the Netherlands may, on or

before 30 June in any calendar year after the year 1979, give to the other

Government through the diplomatic channel written notice of termination and,

in that event, this Agreement shall cease to be effective—

(a) in both States, in respect of withholding tax on dividends, interest and

royalties, on dividends, interest and royalties derived on or after 1 July



(b) in Australia, in respect of tax on income of any year of income

beginning on or after 1 July in the calendar year next following that in

which the notice of termination is given;

(c)in the Netherlands, in respect of taxes, other than withholding taxes referred

to in subparagraph (a), for taxable years and periods beginning after the

end of the calendar year in which the notice of termination is given.



Taxes on Income




DONE in duplicate at Canberra this seventeenth day of March, one thousand

nine hundred and seventy--six, in the English and Netherlands languages, both

texts being equally authentic.

Phillip Lynch R. C. Pekelharing

FOR THE GOVERNMENT

OF AUSTRALIA


KINGDOM OF THE NETHERLANDS

PROTOCOL


THE KINGDOM OF THE NETHERLANDS

HAVE AGREED AT THE SIGNING of the Agreement between the two

States for the avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income upon the following provisions which shall form

an integral part of the said Agreement.

(1) With reference to Articles 6 to 8 and 10 to 17,

income derived by a resident of the Netherlands which under those

Articles may be taxed in Australia, shall for the purposes of the income

tax law of Australia be deemed to be income from sources in Australia.


where the information available to the competent authority of a State is

inadequate to determine the profits of an enterprise on which tax may

be imposed in that State in accordance with Article 7 or Article 9,

nothing in those Articles shall affect the application of any law of that

State relating to the determination of the tax liability of a person,

provided that that law shall be applied, so far as the information

available to the competent authority permits, in accordance with the

principles of those Articles.


profits of an enterprise of one of the States from carrying on a business

of any form of insurance other than life insurance may be taxed in the

other State in accordance with the law of that other State relating

specifically to the taxation of any person who carries on such business,

and Article 23 shall apply for the elimination of double taxation as if the



Schedule 10


profits so taxed were attributable to a permanent establishment of the

enterprise in the State imposing the tax.

(4) With reference to Articles 10, 11 and 12,

applications for the restitution of tax levied by the Netherlands contrary

to the provisions of those Articles must be lodged with the competent

authority of the Netherlands within a period of three years after the

expiration of the calendar year in which the tax has been levied.


(a) where income derived by a resident of Australia may, under the

provisions of Articles 6 to 8 and 10 to 17, be taxed in the Netherlands

such income shall, for the purposes of paragraph (1) of Article 23 and

of the provisions of the income tax law of Australia dealing with the

avoidance of double taxation, be deemed to be income from sources in

the Netherlands;

(b) in so far as the Netherlands income tax or company tax is concerned,

the basis mentioned in paragraph (2) of Article 23 is the “onzuivere

inkomen” or “winst” in terms of the Netherlands income tax law or

company tax law, respectively.

(6) General.

(a) Where one of the States is entitled to tax the profits of an enterprise,

that State may treat as profits of the enterprise, profits from the

alienation of capital assets of the enterprise, not being profits that

consist of income to which paragraph (1) of Article 13 applies.

(b) If, in an Agreement for the avoidance of double taxation that is

subsequently made between Australia and a third State being a State

that at the date of signature of this Protocol is a member of the

Organisation for Economic Co--operation and Development, Australia

shall agree to limit the rate of its taxation—

(i) on dividends paid by a company which is a resident of Australia

for the purposes of Australian tax to which a company that is a

resident of the third State is entitled, to a rate less than that

provided in paragraph (2) of Article 10; or

(ii) on interest arising in Australia to which a resident of the third

State is entitled, to a rate less than that provided in

paragraph (2) of Article 11; or



Taxes on Income


(iii) on royalities arising in Australia to which a resident of the third


paragraph (2) of Article 12,

the Government of Australia shall immediately inform the Government

of the Kingdom of the Netherlands in writing through the diplomatic

channel and shall enter into negotiations with the Government of the

Kingdom of the Netherlands to review the provisions specified in

sub--paragraphs (i), (ii), and (iii) above in order to provide the same

treatment for the Netherlands as that provided for the third State.

DONE in duplicate at Canberra this seventeenth day of March, one thousand

nine hundred and seventy--six, in the English and Netherlands languages, both

texts being equally authentic.

Phillip Lynch R. C. Pekelharing

FOR THE GOVERNMENT

OF AUSTRALIA


KINGDOM OF THE NETHERLANDS

Second Protocol amending the Agreement between Australia and the Kingdom of the

Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income with Protocol Schedule 10A


Schedule 10A—Second Protocol amending

the Agreement between Australia and

the Kingdom of the Netherlands for

the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with

respect to Taxes on Income with

Protocol Section 3

Australia and the Kingdom of the Netherlands,

Desiring to amend the Agreement between Australia and the Kingdom of the

Netherlands for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, with Protocol, signed at Canberra on

17 March 1976 (in this Protocol referred to as “the Agreement”),


ARTICLE 1

Article 6 of the Agreement shall be amended by deleting the second sentence

of paragraph (2).

ARTICLE 2

Article 11 of the Agreement shall be amended by omitting paragraph (3) and

substituting the following paragraph:

‘(3) The term ‘interest’in this Article includes interest from

Government securities, or from bonds or debentures, whether or not

secured by mortgage and whether or not carrying a right to participate

in profits, and interest from any other form of indebtedness as well as

all other income assimilated to interest or to income from money lent by

the taxation law of the State in which the income arises. The term does

not include income to which Article 10 applies.’

Schedule 10A Second Protocol amending the Agreement between Australia and the

Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention

of Fiscal Evasion with respect to Taxes on Income with Protocol


ARTICLE 3

(1) This Protocol, which shall form an integral part of the Agreement, shall

enter into force on the first day of the second month after the date on which the

Contracting States exchange notes through the diplomatic channel notifying

each other that the last of such things has been done as is necessary to give this

Protocol the force of law in Australia and in the Kingdom of the Netherlands

respectively, and thereupon this Protocol shall have effect—

(a) in relation to income from debt claims of every kind, excluding bonds

or debentures, secured by mortgage of real property or of any other

direct interest in or over land, in pursuance of a contractual obligation

entered into before the date of signature of this Protocol—

(i) in Australia, in respect of tax on income of any year of income

beginning on or after the date of commencement of the

eighteenth month following that in which signature of the

Protocol occurs;

(ii) in the Netherlands, in respect of taxes for taxable years and

periods beginning on or after the date of commencement of the

eighteenth month following that in which signature of the

Protocol occurs;

(b) in any other case, including those referred to in paragraph (2)—

(i) in Australia, in respect of tax on income of any year of income


(ii) in the Netherlands, in respect of taxes for taxable years and

periods beginning on or after 1 January 1986.

(2) Subparagraph (1) (a) does not apply in relation to:

(a) income which is derived before the commencement of the first year of

income or the first taxable year or period, as the case may be,

determined in accordance with that sub--paragraph, to the extent to

which that income is attributable to that or any subsequent year or

period; or

(b) income derived pursuant to a contractual obligation where the terms of

that obligation are varied, after the date of signature of this Protocol, so

as to extend or have the effect of extending the date on which

repayment of the relevant debt is due.

Second Protocol amending the Agreement between Australia and the Kingdom of the

Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income with Protocol Schedule 10A




DONE in duplicate at Canberra this thirtieth day of June, One thousand nine

hundred and eighty--six, in the English and Netherlands languages, both texts


PAUL KEATING C. H. A. PLUG

For Australia For the Kingdom of the Netherlands

Schedule 11 2006 French convention


Schedule 11—2006 French convention Note: See section 3.

CONVENTION BETWEEN THE GOVERNMENT OF AUSTRALIA AND

THE GOVERNMENT OF THE FRENCH REPUBLIC FOR THE

AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON

INCOME AND THE PREVENTION OF FISCAL EVASION

The Government of Australia and the Government of the French Republic,

Desiring to conclude a Convention for the avoidance of double taxation with

respect to taxes on income and the prevention of fiscal evasion,


Article 1

PERSONS COVERED



2006 French convention Schedule 11


Article 2

TAXES COVERED

1. The existing taxes to which this Convention shall apply are :

a) in the case of Australia:

the income tax, and the resource rent tax in respect of offshore

projects relating to exploration for or exploitation of petroleum

resources, imposed under the federal law of Australia;

b) in the case of France:

(i) the income tax (“l’impôt sur le revenu”);

(ii) the corporation tax (“l’impôt sur les sociétés”);

(iii) the additional taxes on corporations (“les contributions sur

l’impôt sur les sociétés”); and

(iv) widespread social security contributions (“contributions

sociales généralisées”) and contributions for the

reimbursment of the social debt (“contributions pour le

remboursement de la dette sociale”), including any

withholding tax with respect to the aforesaid taxes.

2. This Convention shall also apply to any identical or substantially

similar taxes which are subsequently imposed by a Contracting State in addition

to, or in place of the existing taxes to which this Convention applies. The

competent authorities of the Contracting States shall notify each other of



significant changes which have been made in their law relating to taxes to

which this Convention applies.

3. Notwithstanding paragraphs 1 and 2, the taxes to which Articles 25 and

26 shall apply are:

a) in the case of Australia, taxes of every kind and description imposed under

the federal taxes laws administered by the Commissioner of Taxation ; and

b) in the case of France, taxes of every kind and description imposed on behalf

of France or its political subdivisions or local authorities

Article 3

DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise

requires:

a) the term “Australia”, when used in a geographical sense, excludes
















b) the term “France” means the European and Overseas Departments

of the French Republic including the territorial sea, and any area

outside the territorial sea within which, in accordance with

international law, the French Republic has sovereign rights for the

purpose of exploring and exploiting the natural resources of the

seabed and its subsoil and the superjacent waters;

c) the terms “Contracting State”, “a Contracting State” and “the other

Contracting State” mean Australia or France, as the context

requires;

d) the term “person” includes an individual, a company and any other

body of persons;

e) the term “company” means any body corporate or any entity which

is treated as a company or body corporate for tax purposes;

f) the term “enterprise” applies to the carrying on of any business;

g) the terms “enterprise of a Contracting State” and “enterprise of the

other Contracting State” mean respectively an enterprise carried on

by a resident of a Contracting State and an enterprise carried on by

a resident of the other Contracting State;



h) the term “Australian tax” means tax imposed by Australia, being

tax to which this Convention applies by virtue of paragraphs 1 and

2 of Article 2;

i) the term “French tax” means tax imposed by France, being tax to

which this Convention applies by virtue of paragraphs 1 and 2 of

Article 2;

j) the term “competent authority” means in the case of Australia, the

Commissioner of Taxation or an authorised representative of the

Commissioner and in the case of France, the minister in charge of

the budget or an authorised representative of the minister;

k) the term “business” includes the performance of professional


l) the term “international traffic” means any transport by a ship or


when the ship or aircraft is operated solely from a place or between

places in the other Contracting State.

2. In this Convention, the terms “Australian tax” and “French tax” do not

include any penalty or interest imposed under the law of either Contracting

State relating to the taxes referred to in Article 2.

3. As regards the application of the Convention at any time by a



that State concerning the taxes to which the Convention applies, any meaning

under the applicable tax law of that State prevailing over a meaning given to the

term under other law of that State.



Article 4

RESIDENCE

1. For the purposes of this Convention, the term “resident of a Contracting

State” means:

a) in the case of Australia, a person who is a resident of Australia for

the purposes of Australian tax; and

b) in the case of France, a person who is domiciled in France for the

purposes of French tax.

A Contracting State or a political subdivision or statutory body or a local

authority thereof is also a resident of that State for the purposes of this

Convention.

2. A person is not a resident of a Contracting State for the purposes of this

Convention if the person is liable to tax in that State in respect only of income

from sources in that State.

3. Where by reason of the preceding provisions of this Article a person,

being an individual, is a resident of both Contracting States, the person’s status

shall be determined as follows:

a) the individual shall be deemed to be a resident only of the State in

which a permanent home is available to that individual; but if a

permanent home is available in both States, or in neither of them,

that individual shall be deemed to be a resident only of the State



with which the individual’s personal and economic relations are

closer (centre of vital interests);

b) if the State in which the centre of vital interests is situated cannot

be determined, the individual shall be deemed to be a resident only

of the State of which that individual is a national or citizen.

4. Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, it shall be deemed to

be a resident solely of the Contracting State in which its place of effective


5. The term “resident of a Contracting State” shall include, where that

State is France, any partnership or group of persons which has its place of

effective management in France and all partners, shareholders or other members

of which are personally liable to tax therein in respect of their part of the profits

of those partnerships or groups of persons pursuant to French domestic laws.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term “permanent



2. The term “permanent establishment” shall include especially:

a) a place of management;



b) a branch;

c) an office;

d) a factory;

e) a workshop;

f) a mine, quarry or other place of extraction of natural resources; and

g) an agricultural, pastoral or forestry property.



a) the use of facilities solely for the purpose of storage, display or


b) the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of storage, display or delivery;

c) the maintenance of a stock of goods or merchandise belonging to


enterprise;

d) the maintenance of a fixed place of business solely for the purpose

of purchasing goods or merchandise, or for collecting information,

for the enterprise;

e) the maintenance of a fixed place of business solely for the purpose

of activities which have a preparatory or auxiliary character for the




4. An enterprise shall be deemed to have a permanent establishment in a


establishment if:

a) it has a building site or construction, installation or assembly

project in that State which exists for more than twelve months; or

b) it carries on supervisory activities in that State for more than six

months in connection with a building site, or a construction,

installation or assembly project which is being undertaken in that

State; or

c) it maintains substantial equipment for rental or other purposes

within that State (excluding equipment let under a hire-purchase

agreement) for more than six months.

5. a) The duration of activities under subparagraphs a) and b) of

paragraph 4 will be determined by aggregating the periods during

which activities are carried on in a Contracting State by associated

enterprises provided that the activities of the enterprise in that State

are connected with the activities carried on in that State by its

associate.

b) The period during which two or more associated enterprises are

carrying on concurrent activities will be counted only once for the

purpose of determining the duration of activities.

c) For the purposes of this Article, an enterprise shall be deemed to be


(i) one is controlled directly or indirectly by the other ; or



(ii) both are controlled directly or indirectly by the same person

or persons.

6. A person acting in a Contracting State on behalf of an enterprise of the

other Contracting State - other than an agent of an independent status to whom

paragraph 7 applies - shall be deemed to be a permanent establishment of that

enterprise in the first-mentioned State if:

a) the person has, and habitually exercises in that State, an authority

to conclude contracts on behalf of the enterprise, unless the

person’s activities are limited to the purchase of goods or

merchandise for the enterprise; or

b) in so acting the person manufactures or processes in that State for

the enterprise goods or merchandise belonging to the enterprise.

7. An enterprise of a Contracting State shall not be deemed to have a


on business in that other State through a broker, general commission agent or

any other agent of an independent status, where that person is acting in the

ordinary course of the person’s business as such a broker or agent.

8. The fact that a company which is a resident of a Contracting State





9. The principles set forth in the preceding paragraphs of this Article shall

be applied in determining for the purposes of paragraph 7 of Article 11 and

paragraph 5 of Article 12 whether there is a permanent establishment outside



both Contracting States, and whether an enterprise, not being an enterprise of a

Contracting State, has a permanent establishment in a Contracting State.

Article 6

INCOME FROM REAL PROPERTY

1. Income from real property, including income from an agricultural,

pastoral or forestry property, may be taxed in the Contracting State in which

that property is situated.

2. For the purposes of this Article, the term “real property”:

a) in the case of Australia, has the meaning which it has under the law

of Australia, and shall also include:

(i) a lease of land and any other interest in or over land, whether

improved or not including a right to explore for mineral, oil

or gas deposits or other natural resources, and a right to mine

those deposits or resources; and

(ii) a right to receive variable or fixed payments either as

consideration for or in respect of the exploitation of, or the

right to explore for or exploit, mineral, oil or gas deposits,

quarries or other places of extraction or exploitation of


b) in the case of France, means such property which, according to the

law of France, is immovable property and shall in any case include:



(i) property accessory to immovable property;

(ii) livestock and equipment used in agriculture and forestry;

(iii) rights to which the provisions of the general law respecting

landed property apply; and

(iv) usufruct of immovable property and rights to variable or

fixed payments as consideration for the working of or the

right to work mineral deposits, mineral sources and other

natural resources.



direct use, letting or use in any other form of real property.

4. Notwithstanding the provisions of Article 7, where shares or other

rights in a company, trust or comparable institution entitle a person to the

enjoyment of real property of that company, trust or comparable institution,

income derived from the direct use, letting or use in any other form of that right

of enjoyment may be taxed in the Contracting State in which the real property is

situated.

5. The provisions of paragraphs 1, 3 and 7 shall also apply to income from

real property of an enterprise.

6. The provisions of paragraph 4 shall also apply to income of an

enterprise derived from the direct use, letting or use in any other form of a right

of enjoyment referred to in that paragraph.



7. Any interest or right referred to in paragraph 2 or 4 shall be regarded as

situated where the buildings, land, mineral, oil or gas deposits, quarries, mineral

sources or natural resources, as the case may be, are situated or where the

exploration may take place.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only





establishment.

2. Where an enterprise of a Contracting State carries on business in the

other Contracting State through a permanent establishment situated therein,

there shall in each Contracting State be attributed to that permanent

establishment the profits which it might be expected to make if it were a distinct

and separate enterprise engaged in the same or similar activities under the same

or similar conditions and dealing wholly independently with the enterprise of

which it is a permanent establishment.

3. In the determination of the profits of a permanent establishment there

shall be allowed as deductions expenses of the enterprise, including executive

and general administrative expenses, which are deductible according to the law

of the State in which the permanent establishment is situated whether incurred

in that State or elsewhere.





establishment of an enterprise, the competent authority may apply to that

enterprise for that purpose the provisions of the taxation law of that State,

provided that that law shall be applied, so far as the information available to the

competent authority permits, in accordance with the principles of this Article.

5. No profits shall be attributed to a permanent establishment by reason of


the enterprise.

6. Where profits include items of income which are dealt with separately

in other Articles of this Convention, then the provisions of those Articles shall

not be affected by the provisions of this Article.

7. Notwithstanding the preceding provisions of this Article, profits of an

enterprise of a Contracting State from carrying on a business of any form of

insurance other than life insurance may be taxed in the other Contracting State

in accordance with the law of that other State relating specifically to the

taxation of any person who carries on such a business, provided that if the law

in force in either Contracting State at the date of signature of this Convention

relating to the taxation of such a person is varied (otherwise than in minor

respects so as not to affect its general character), the Contracting States shall

consult with each other with a view to agreeing to such amendment of this

paragraph as may be necessary.

8. Where:

a) a resident of a Contracting State is beneficially entitled, whether







b) in relation to that enterprise, that trustee would, in accordance with


other State,





Article 8

SHIPS AND AIRCRAFT

1. Profits of an enterprise of a Contracting State derived from the


State.

2. Notwithstanding the provisions of paragraph 1, profits of an enterprise



directly or indirectly from ship or aircraft operations confined solely to places in

that other State.

3. The amount which shall be charged to tax in a Contracting State under

paragraph 2 in respect of transport operations of ships shall not exceed 5 per

cent of the amount paid or payable (net of rebates) in respect of carriage.



4. The provisions of paragraph 3 shall not apply to profits from the

operation of ships, where the profits are attributable to a permanent

establishment of the enterprise situated in the other Contracting State.

5. The profits to which the provisions of paragraphs 1 and 2 apply include

profits from the operation of ships or aircraft derived through participation in a

pool service or other profit sharing arrangement.

6. For the purposes of this Article, profits derived from the carriage by


shipped in a Contracting State and are discharged at a place in that State

(without having been discharged outside that State) shall be treated as profits

from ship or aircraft operations confined solely to places in that State.

Article 9

ASSOCIATED ENTERPRISES

1. Where:

a) an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise of


b) the same persons participate directly or indirectly in the


State and an enterprise of the other Contracting State,

and in either case conditions exist between the two enterprises in their

commercial or financial relations which differ from those which may be



expected between independent enterprises dealing wholly independently with

one another, then any profits which might, but for those conditions, be expected

to accrue to one of the enterprises, but, by reason of those conditions, have not

so accrued, may be included in the profits of that enterprise and taxed

accordingly.


State is inadequate to determine the profits to be attributed to an enterprise, the

competent authority may apply to that enterprise for that purpose the provisions

of the taxation law of that State, provided that that law shall be applied, so far as

the information available to the competent authority permits, in accordance with

the principles of this Article.

3. Where, according to the provisions of paragraphs 1 and 2, profits are

included by a Contracting State in the profits of an enterprise, the other

Contracting State shall, on a claim being made by the other enterprise

concerned, consistently with its law consider the inclusion so made and the

provision of relief to that other enterprise in relation to the taxation of profits

which the other State determines to be profits which, but for the particular

conditions referred to in paragraphs 1 and 2, might have been expected to

accrue to the first-mentioned enterprise.

Article 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State


the other Contracting State may be taxed in that other State.



2. However, those dividends may also be taxed in the Contracting State of


and according to the law of that State, but the tax so charged shall not exceed:

a) 0 per cent where those dividends are paid out of profits that have

borne the normal rate of company tax and those dividends are paid

to a company which, in the case of Australia, holds directly at least

10 per cent of the voting power of the company paying the

dividends, or in the case of France, holds directly at least 10 per

cent of the capital of the company paying the dividends; and

b) 5 per cent of the gross amount of other dividends, if the beneficial

owner of those dividends is a company which, in the case of

Australia, holds directly at least 10 per cent of the voting power of

the company paying the dividends, or in the case of France, holds

directly at least 10 per cent of the capital of the company paying

the dividends; and

c) 15 per cent of the gross amount of the dividends in all other cases,

provided that if the relevant law in either Contracting State at the date of

signature of this Convention is varied otherwise than in minor respects so as not

to affect its general character, the Contracting States shall consult each other

with a view to agreeing to any amendment of this paragraph that may be

appropriate.

3. The term “dividends” as used in this Article means income from shares

or other rights, not being debt-claims, participating in profits, as well as other

amounts which are subjected to the same taxation treatment as a distribution or

dividend by the law of the State of which the company making the distribution

is a resident for the purposes of its tax.




owner of the dividends, being a resident of a Contracting State, carries on


dividends is a resident, through a permanent establishment situated in that other

State, and the holding in respect of which the dividends are paid is effectively

connected with that permanent establishment. In such case, the provisions of

Article 7 shall apply.

5. Where a company which is a resident of a Contracting State derives


impose any tax on the dividends paid by the company—being dividends


State—except insofar as the holding in respect of which such dividends are paid


State, even if the dividends paid consist wholly or partly of profits or income

arising in such other State. This paragraph shall not apply in relation to

dividends paid by any company which is a resident of Australia for the purposes

of Australian tax and which is also a resident of France for the purposes of

French tax.

Article 11

INTEREST

1. Interest arising in a Contracting State and beneficially owned by a




2. However, that interest may also be taxed in the Contracting State in



3. Notwithstanding paragraph 2, interest arising in a Contracting State and

beneficially owned by a resident of the other Contracting State may not be taxed

in the first-mentioned State if:

a) the interest is derived from the investment of official reserve assets

by the government of a Contracting State or a political subdivision

or local authority thereof, its monetary institutions or a bank

performing central banking functions in that State; or

b) the interest is derived by a financial institution which is unrelated

to and dealing wholly independently with the payer. For the

purposes of this Article, the term “financial institution” means a

bank or other enterprise substantially deriving its profits by raising

debt finance in the financial markets or by taking deposits at

interest and using those funds in carrying on a business of

providing finance.

4. Notwithstanding paragraph 3, interest referred to in subparagraph b) of


exceeding 10 per cent of the gross amount of the interest if the interest is paid as

part of an arrangement involving back-to-back loans or other arrangement that

is economically equivalent and intended to have a similar effect to back-to-back

loans.

5. The term “interest” in this Article includes interest from government


whether or not carrying a right to participate in profits, interest from any other



form of indebtedness, as well as income which is subjected to the same taxation

treatment as income from money lent by the law of the Contracting State in

which the income arises. Penalty charges for late payment shall not be regarded

as interest for the purpose of this Article.

6. The provisions of paragraphs 1 and 2, subparagraph b) of paragraph 3



Contracting State in which the interest arises, through a permanent

establishment situated in that other State, and the indebtedness in respect of

which the interest is paid is effectively connected with that permanent

establishment. In such case the provisions of Article 7 shall apply.

7. Interest shall be deemed to arise in a Contracting State when the payer



not, has in a Contracting State or outside both Contracting States a permanent

establishment in connection with which the indebtedness on which the interest

is paid was incurred, and such interest is borne by such permanent

establishment, then such interest shall be deemed to arise in the State in which





which it is paid, exceeds the amount which might reasonably have been

expected to have been agreed upon by the payer and the beneficial owner in the

absence of that relationship, the provisions of this Article shall apply only to the

last-mentioned amount. In such case, the excess part of the payments shall



remain taxable according to the law of each Contracting State, due regard being

had to the other provisions of this Convention.

Article 12

ROYALTIES

1. Royalties arising in a Contracting State and beneficially owned by a


2. However, those royalties may also be taxed in the Contracting State in



3. The term “royalties” in this Article means payments or credits, whether



a) the use of, or the right to use, any copyright, patent, design or


property or right; or

b) the supply of scientific, technical, industrial or commercial


c) the supply of any assistance that is ancillary and subsidiary to, and

is furnished as a means of enabling the application or enjoyment

of, any such property or right as is mentioned in subparagraph a) or

any such knowledge or information as is mentioned in

subparagraph b); or



d) the use of, or the right to use:





e) total or partial forbearance in respect of the use or supply of any





permanent establishment situated in that other State, and the right or property in

respect of which the royalties are paid or credited is effectively connected with

such permanent establishment. In such case the provisions of Article 7 shall

apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer


paying the royalties, whether the person is a resident of a Contracting State or


establishment in connection with which the liability to pay the royalties was

incurred, and the royalties are borne by the permanent establishment, then such

royalties shall be deemed to arise in the State in which the permanent

establishment is situated.






are paid or credited for, exceeds the amount which might reasonably have been

expected to have been agreed upon by the payer and the beneficial owner in the

absence of such relationship, the provisions of this Article shall apply only to

the last-mentioned amount. In such case, the excess part of the amount of the

payments or credits shall remain taxable according to the law of each

Contracting State, due regard being had to the other provisions of this

Convention.

Article 13

ALIENATION OF PROPERTY


from the alienation of real property situated in the other Contracting State may

be taxed in that other State.

2. Income, profits or gains from the alienation of property, other than real

property, that forms part of the business property of a permanent establishment

which an enterprise of a Contracting State has in the other Contracting State,

including income, profits or gains from the alienation of that permanent

establishment (alone or with the whole enterprise), may be taxed in that other

State.

3. Income, profits or gains of an enterprise of a Contracting State from the

alienation of ships or aircraft operated by that enterprise in international traffic,

or of property (other than real property) pertaining to the operation of those

ships or aircraft, shall be taxable only in that State.


from the alienation of any shares or other interests in a company, or of an

interest of any kind in a partnership, trust or other entity, where the value of the



assets of such entity, whether they are held directly or indirectly (including

through one or more interposed entities, such as, for example, through a chain

of companies), is principally attributable to real property situated in the other

Contracting State, may be taxed in that other State.

5. Where an individual who upon ceasing to be a resident of a Contracting

State, is treated under the taxation law of that State as having alienated any

property and is taxed in that State by reason thereof, the individual may elect to

be treated for the purposes of taxation in the other Contracting State as if the

individual had, immediately before ceasing to be a resident of the

first-mentioned State, alienated and reacquired the property for an amount equal

to its fair market value at that time.

6. Gains of a capital nature from the alienation of any property, other than

that referred to in the preceding paragraphs shall be taxable only in the

Contracting State of which the alienator is a resident.

7. In this Article, the term “real property” has the same meaning as it has

in Article 6.

8. The situation of real property shall be determined for the purposes of

this Article in accordance with paragraph 7 of Article 6.

Article 14

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17, and 18, remuneration

derived by an individual who is a resident of a Contracting State in respect of an

employment shall be taxable only in that State unless the employment is



exercised in the other Contracting State. If the employment is so exercised, such

remuneration as is derived from that exercise may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived




a) the recipient is present in the other State for a period or periods not

exceeding in the aggregate 183 days in any twelve month period

commencing or ending in the fiscal year of that other State; and

b) the remuneration is paid by, or on behalf of, an employer who is

not a resident of that other State; and

c) the remuneration is not borne by a permanent establishment which

the employer has in that other State.

3. Notwithstanding the preceding provisions of this Article, remuneration


international traffic by a resident of a Contracting State may be taxed in that

State.

Article 15

DIRECTORS’ FEES

Directors’ fees and similar payments derived by a resident of a

Contracting State in that person’s capacity as a member of the board of directors



of a company which is a resident of the other Contracting State may be taxed in

that other State.

Article 16

ENTERTAINERS AND SPORTSPERSONS

1. Notwithstanding the provisions of Articles 7 and 14, income derived by

entertainers (such as theatre, motion picture, radio or television artists and

musicians) and sports persons from their personal activities as such may be

taxed in the Contracting State in which these activities are exercised.

2. Where income in respect of personal activities exercised by an

entertainer or sports person in that person’s capacity as such accrues not to that

person but to another person, whether a resident of a Contracting State or not,

that income may, notwithstanding the provisions of Articles 7 and 14, be taxed

in the Contracting State in which the activities of the entertainer or sports

person are exercised.

Article 17

PENSIONS AND ANNUITIES

1. Subject to the provisions of paragraph 2 of Article 18, pensions and

annuities paid to a resident of a Contracting State shall be taxable only in that

State.



2. The term “annuity” means any stated sum payable periodically at stated



money or money's worth.

3. Notwithstanding anything in this Convention, any pension or allowance

that is paid by a Contracting State in respect of wounds, disabilities or death

caused by war, or in respect of war service, and is exempt from tax under the

law of that State, to a resident of the other Contracting State shall be exempt


4. a) Contributions borne by an individual who is a resident of a

Contracting State, and who renders services in the course of an

employment in that State, to a pension scheme established and

recognised for tax purposes in the other Contracting State shall, in

determining the individual’s tax payable, be treated in the

first-mentioned State in the same way and subject to the same

conditions and limitations as contributions made to a pension

scheme that is recognised for tax purposes in that State, provided

that:

(i) the individual was not a resident of that State, and was

participating in the pension scheme, immediately before

beginning to exercise employment in that State; and

(ii) the pension scheme is accepted by the competent authority

of that State as generally corresponding to a pension scheme

recognised as such for tax purposes by that State.

b) For the purposes of subparagraph a):



(i) the term “a pension scheme” means an arrangement in which

the individual participates in order to secure retirement

benefits payable in respect of the services referred to in

subparagraph a); and

(ii) a pension scheme is “recognised for tax purposes” in a State

if the contributions to the scheme would qualify for tax relief

in that State.

Article 18

GOVERNMENT SERVICE

1. a) Salaries, wages and other similar remuneration (other than a

pension or annuity) paid by a Contracting State or a political

subdivision or statutory body or local authority thereof to an

individual in respect of services rendered to that State, subdivision,

body or authority shall be taxable only in that State.

b) However, such salaries, wages and other similar remuneration shall

be taxable only in the other Contracting State if the services are

rendered in that State and the individual is a resident of, and a

national or citizen of, that State and is not also a national or citizen

of the first-mentioned State.

2. a) Any pension paid by, or out of funds created by, a Contracting State

or a political subdivision or statutory body or local authority thereof



to an individual in respect of services rendered to that State,

subdivision, body or authority shall be taxable only in that State.

b) However, such pension shall be taxable only in the other

Contracting State if the individual is a resident of, and a national or

citizen of, that State and is not also a national or citizen of the

first-mentioned State.

3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries,

wages and other similar remuneration, or to pensions, in respect of services

rendered in connection with a business carried on by a Contracting State or a

political subdivision or statutory body or local authority thereof.

Article 19

STUDENTS

Payments which a student who is, or was immediately before visiting a

Contracting State, a resident of the other Contracting State and who is

temporarily present in the first-mentioned State solely for the purpose of the

student’s education receives from sources outside that first-mentioned State for

the purpose of the student’s maintenance or education shall not be taxed in that

first-mentioned State.



Article 20

OTHER INCOME

1. Items of income of a resident of a Contracting State wherever arising

which are not dealt with in the foregoing Articles of this Convention shall be


2. The provisions of paragraph 1 shall not apply to income, other than



State through a permanent establishment situated therein and the right or

property in respect of which the income is paid is effectively connected with


apply.

3. Notwithstanding the provisions of paragraphs 1 and 2, items of income

of a resident of a Contracting State not dealt with in the foregoing Articles of

this Convention from sources in the other Contracting State may also be taxed

in the other Contracting State.

Article 21

SOURCE OF INCOME


which, under Articles 6 to 8, 10 to 16 and 18 may be taxed in the other

Contracting State, shall be deemed to be income from sources in that other

State.



2. Profits included in the profits of an enterprise of a Contracting State

under paragraph 1 of Article 9 shall for purposes of the taxation of that

enterprise be deemed to be income of that enterprise derived from sources in

that Contracting State.


which, under any one or more of Articles 6 to 8, 10 to 16 and 18, may be taxed

in the other Contracting State shall for the purposes of Article 23 and of the law

of the first-mentioned Contracting State relating to its tax be deemed to arise


Article 22

RULES OF TAXATION

Where conditions of commercial or financial relations between a person

who is a resident of Australia and a person who is a resident of France differ

from those which may be expected between independent persons dealing

wholly independently with one another, nothing in the Convention shall prevent

a Contracting State, by application of its domestic law, from including in the

profits of such persons and taxing accordingly the profits which, but for those

conditions, might have been expected to have accrued to them.

Article 23

ELIMINATION OF DOUBLE TAXATION

1. Subject to the provisions of the law of Australia from time to time in





this Article), French tax paid under the law of France and in accordance with

this Convention, whether directly or by deduction, in respect of income derived

by a person who is a resident of Australia from sources in France shall be

allowed as a credit against Australian tax payable in respect of that income.

2. In the case of France, double taxation shall be avoided in the following

manner:

a) Notwithstanding any other provision of this Convention, income

which may be taxed or shall be taxable only in Australia in

accordance with the provisions of this Convention shall be taken

into account for the computation of the French tax where the

beneficiary of such income is a resident of France and where such

income is not exempted from corporation tax according to French

domestic law. In that case, the Australian tax shall not be

deductible from such income but the resident of France shall,

subject to the conditions and limits provided for in subparagraph (i)

and (ii), be entitled to a tax credit against French tax. Such tax

credit shall be equal:

(i) in the case of income other than mentioned in

subparagraph (ii), to the amount of French tax attributable to

such income provided that the resident of France is subject

to Australian tax in respect of such income;

(ii) in the case of income referred to in Article 7 and paragraph 2

of Article 13 which is subject to the corporation tax, and in

the case of income referred to in Article 10, Article 11,

Article 12, paragraph 1 of Article 13 and paragraph 3 of

Article 14, Article 15, Article 16 and Article 20, to the



amount of tax paid in Australia in accordance with the

provisions of those Articles. However, such tax credit shall

not exceed the amount of French tax attributable to such

income.

b) The term “amount of French tax attributable to such income” as

used in subparagraph a) means:

(i) where the tax of such income is computed by applying a

proportional rate, the amount of the net income concerned

multiplied by the rate which actually applies to that income;

(ii) where the tax on such income is computed by applying a

progressive scale, the amount of the net income concerned

multiplied by the rate resulting from the ratio of the tax

actually payable on the total net income taxable in

accordance with French law to the amount of that total net

income.

Article 24

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of the


accordance with this Convention, the person may, irrespective of the remedies

provided by the domestic law of those States concerning taxes to which this

Convention applies, present a case to the competent authority of the Contracting

State of which the person is a resident. The case must be presented within 3



years from the first notification of the action resulting in taxation not in

accordance with this Convention.

2. The competent authority shall endeavour, if the claim appears to it to be




with this Convention. The solution so reached shall be implemented

notwithstanding any time limits in the domestic law of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to


interpretation or application of this Convention. In particular, they may consult

together to endeavour to agree to the same allocation of income between

associated enterprises mentioned in Article 9. They may also consult together

for the elimination of double taxation in cases not provided for in the

Convention.

4. The competent authorities of the Contracting States may communicate



5. For the purposes of paragraph 3 of Article XXII (Consultation) of the











Article 25



information as is foreseeably relevant for carrying out the provisions of this

Convention or to the administration or enforcement of the domestic laws

concerning taxes referred to in paragraph 3 of Article 2 insofar as the taxation

thereunder is not contrary to the Convention. The exchange of information is

not restricted by Article 1.



domestic laws of that State and shall be disclosed only to persons or authorities

(including courts and administration bodies) concerned with the assessment or


appeals in relation to the taxes referred to in paragraph 1, or the oversight of the



judicial decisions.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as


a) to carry out administrative measures at variance with the laws and


b) to supply information which is not obtainable by the competent

authority under the laws or in the normal course of the

administration of that or of the other Contracting State;





information the disclosure of which would be contrary to public

policy (ordre public).





the preceding sentence is subject to the limitations of paragraph 3 except where

such limitations would preclude a Contracting State from supplying information

solely because it has no domestic interest in such information.




acting in an agency or a fiduciary capacity or relates to ownership interests in a

person.

Article 26

ASSISTANCE IN RECOVERY

1. The Contracting States shall lend assistance to each other in the






2. The term “revenue claim” as used in this Article means an amount

owed in respect of taxes referred to in paragraph 3 of Article 2, insofar as the

taxation thereunder is not contrary to this Convention or any other instrument to

which the Contracting States are parties, as well as interest, administrative

penalties and costs of collection or conservancy related to such amount.

3. When a revenue claim of a Contracting State is enforceable under the

laws of that State and is owed by a person who, at that time, cannot, under the

laws of that State, prevent its collection, that revenue claim shall, at the request



shall be collected by that other State in accordance with the provisions of its

laws applicable to the enforcement and collection of its own taxes as if the

revenue claim were a revenue claim of that other State.

4. When a revenue claim of a Contracting State is a claim in respect of






in accordance with the provisions of its laws as if the revenue claim were a




5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim



revenue claim under the laws of that State by reason of its nature as such. In




paragraphs 3 or 4 shall not, in that State, have any priority applicable to that

revenue claim under the laws of the other Contracting State.

6. Proceedings with respect to the existence, validity or the amount of a



7. Where, at any time after a request has been made by a Contracting State



revenue claim ceases to be:

a) in the case of a request under paragraph 3, a revenue claim of the

first-mentioned State that is enforceable under the laws of that

State and is owed by a person who, at that time, cannot, under the

laws of that State, prevent its collection, or

b) in the case of a request under paragraph 4, a revenue claim of the

first-mentioned State in respect of which that State may, under its

laws, take measures of conservancy with a view to ensure its

collection




8. In no case shall the provisions of this Article be construed so as to


a) to carry out administrative measures at variance with the laws and




b) to carry out measures which would be contrary to public policy

(ordre public);

c) to provide assistance if the other Contracting State has not pursued

all reasonable measures of collection or conservancy, as the case

may be, available under its laws or administrative practice;

d) to provide assistance in those cases where the administrative

burden for that State is clearly disproportionate to the benefit to be

derived by the other Contracting State;

e) to provide assistance if that State considers that the taxes with


generally accepted taxation principles.

Article 27

DIPLOMATIC AND CONSULAR PRIVILEGES

1. Nothing in this Convention shall affect diplomatic or consular

privileges under the general rules of international law or under the provisions of

special international agreements.

2. This Convention shall not apply to international organisations, to

organs or officials thereof or to persons who are members of a diplomatic or

consular mission of a third State and who, being present in a Contracting State,

are not treated in either Contracting State as residents in respect of taxes on

income.



Article 28

MISCELLANEOUS

Notwithstanding the provisions of subparagraph b) of paragraph 1 of

Article 2 of this Convention, for the purposes of the assessment in respect of the

capital tax (“l’impôt de solidarité sur la fortune”) of an individual who is

resident of France and is a citizen of Australia without being a national of

France, property situated outside France which that individual owns on

1 January in each of the five calendar years following that in which the

individual became a resident of France shall not be included in the basis of

assessment of the tax pertaining to each of those five years. If that person ceases

to be a resident of France for a period of at least three years, and then becomes a

resident of France again, property situated outside France which that person

owns on 1st January in each of the five calendar years following that in which

the person became a resident of France again shall not be included in the basis

of assessment of the tax pertaining to each of those five years.

Article 29

PARTNERSHIPS

1. In the case of a partnership or similar entity which has its place of

effective management in Australia and which is treated in Australia as fiscally

transparent:



a) a partner who is a resident of Australia and whose share of the

income, profits or gains of the partnership is taxed in Australia in

all respects as though such amounts had been derived by the partner

directly, shall be entitled to the benefits of this Convention with

respect to their share of such amounts arising in France as though

the partner had derived such amounts directly;

b) a partner who is a resident of France :

(i) shall be entitled to the benefits of this Convention with

respect to their share of such income, profits or gains of the

partnership arising in Australia as though the partner had

derived such amounts directly; and

(ii) shall be taxable in respect of their share of such income,

profits or gains of the partnership arising in France as though

the partner had derived such amounts directly but any such

amounts which are taxed in Australia shall be treated for the

purpose of paragraph 2 of Article 23 of this Convention as

arising from sources in Australia.

2. In the case of a partnership which has its place of effective management

in a State other than a Contracting State and which is treated in that third State

as fiscally transparent, a partner who is a resident of a Contracting State and

whose share of the income, profits or gains of the partnership is taxed in that

Contracting State in all respects as though those amounts had been derived

directly by the partner, shall be entitled to the benefits of this Convention with

respect to their share of such amounts arising in the other Contracting State as

though the partner had derived such amounts directly, subject to the following

conditions:



a) the absence of contrary provisions in a taxation convention

between a Contracting State and the third State; and

b) the partner’s share of the income, profits or gains of the partnership

is taxed in the same manner, including the nature or source of those

amounts and the time when those amounts are taxed, as would

have been the case if the amounts had been derived directly; and

c) it is possible to exchange information concerning the partnership or

partners under the terms of a taxation convention between the

Contracting State in which the income, profits or gains arise and

the third State.

3. For the purposes of paragraphs 1 and 2 of this Article, income, profits

or gains shall be deemed to arise in a Contracting State in particular where they

are attributable to a permanent establishment which the partnership or entity has

in that State.

4. Where, under any provision of this Convention, a partnership or other

group of persons which is a resident of France in accordance with paragraph 5

of Article 4, is entitled to relief from tax in Australia on any income, profits or

gains, that provision shall not be construed as restricting the right of Australia to

tax any member of the partnership or other group who is a resident of Australia

on their share of such amounts; but any such amounts shall be treated for the

purposes of paragraph 1 of Article 23 of this Convention as arising from sources

in France.



Article 30

ENTRY INTO FORCE

1. The Contracting States shall notify each other in writing through the

diplomatic channel of the completion of their domestic requirements for the

entry into force of this Convention. This Convention shall enter into force on

the first day of the second month following the date of receipt of the last

notification, and thereupon the Convention shall have effect:




1 January in the calendar year next following the date on

which the Convention enters into force;


profits or gains of any year of income beginning on or after

1 July in the calendar year next following the date on which

the Convention enters into force;


(i) in respect of taxes on income withheld at source, for

amounts taxable after the calendar year in which the

Convention enters into force;

(ii) in respect of taxes on income which are not withheld at

source, for income relating, as the case may be, to any



calendar year or accounting period beginning after the

calendar year in which the Convention enters into force;

(iii) in respect of the other taxes, for taxation the taxable event of

which will occur after the calendar year in which the


c) for purposes of Article 25, from the date of entry into force of this

Convention ;

d) notwithstanding the provisions of subparagraphs a) and b), Article

26 shall have effect from the date agreed in an exchange of notes

through the diplomatic channel.

2. The Agreement between the Government of Australia and the

Government of the French Republic for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income signed in

Canberra on 13 April 1976 (as amended by the Protocol signed in Paris on

19 June 1989) and the Agreement between the Government of the

Commonwealth of Australia and the Government of the French Republic for the

avoidance of double taxation of income derived from international air transport

signed in Canberra on 27 March 1969 shall be terminated and shall cease to

have effect from the dates on which this Convention becomes effective in

accordance with paragraph 1 of this Article.

3. Notwithstanding the entry into force of this Convention, an individual

who is entitled to the benefits of Article 19 of the Agreement between the

Government of Australia and the Government of the French Republic for the


to taxes on income signed in Canberra on 13 April 1976 (as amended by the

Protocol signed in Paris on 19 June 1989) at the time of the entry into force of



this Convention shall continue to be entitled to such benefits until such time as

the individual would have ceased to be entitled to such benefits if the

Agreement had remained in force.

Article 31

TERMINATION

This Convention shall continue in effect indefinitely, but either Contracting

State may terminate the Convention by giving written notice of termination,

through the diplomatic channel, to the other State at least 6 months before the

end of any calendar year beginning after the expiration of 5 years from the date

of its entry into force and, in that event, the Convention shall cease to be

effective:





the notice of termination is given;


profits or gains of any year of income beginning on or after

1 July in the calendar year next following that in which the

notice of termination is given ;




(i) in respect of taxes on income withheld at source, for

amounts taxable after the calendar year in which the notice

of termination is given ;

(ii) in respect of taxes on income which are not withheld at

source, for income relating, as the case may be, to any

calendar year or accounting period beginning after the

calendar year in which the notice of termination is given ;

(iii) in respect of the other taxes, for taxation the taxable event

of which will occur after the calendar year in which the

notice of termination is given.

In witness whereof the undersigned, duly authorised thereto, have signed this

Convention.

Done in duplicate at Paris this twentieth day of June two thousand and six in the

English and French languages, both texts being equally authentic.


AUSTRALIA:


THE FRENCH REPUBLIC:

ALEXANDER DOWNER

PHILIPPE DOUSTE-BLAZY




PROTOCOL


THE FRENCH REPUBLIC

Have agreed at the signing of the Convention between the two Governments for

the avoidance of double taxation with respect to taxes on income and the

prevention of fiscal evasion upon the following provisions, which shall form an

integral part of the said Convention (in this Protocol referred to as “the

Convention”):

1. The competent authorities of the Contracting States may settle, jointly

or separately, the mode of application of the Convention.

2. With reference to paragraph 5 of Article 4 (Residence),

where a resident of a third State is a member of such partnership or group that is

not subject to corporation tax in France, the Australian income tax liability in

respect of the member’s share of the income, profits or gains of the partnership

or group shall be determined in accordance with Australian domestic law,

including the provisions of any taxation convention between Australia and that

third State, it being understood that such partnership or group shall be treated as

fiscally transparent for the purposes of entitlement to Australian tax benefits

under that convention.




the term “royalties” does not include payments for the use of spectrum licenses.

The provisions of Article 7 of the Convention shall apply to such payments.

4. With reference to Article 18 (Government service),

business activities carried on by a statutory body of a Contracting State include

activities of that body which are not primarily supported by public funds of that

State or of one or more political subdivisions or local authorities thereof.

In witness whereof the undersigned, duly authorised thereto, have signed this

Convention.

Done in duplicate at Paris this twentieth day of June two thousand and six in

the English and French languages, both texts being equally authentic.


AUSTRALIA:


THE FRENCH REPUBLIC:

ALEXANDER DOWNER

PHILIPPE DOUSTE-BLAZY


Agreement between the Government of Australia and the Government of the Hellenic

Republic for the Avoidance of Double Taxation of Income derived from International

Air Transport Schedule 12




Government of the Hellenic Republic


of Income derived from International

Air Transport

Section 3

The Government of Australia and the Government of the Hellenic Republic

desiring to conclude an Agreement for the avoidance of double taxation of

income derived from international air transport,


ARTICLE 1

(1) The existing taxes to which this Agreement applies are—

(a) the Australian income tax, including the additional tax upon the

undistributed amount of the distributable income of a private company,

(hereinafter referred to as “Australian tax”);

(b) the Greek income tax including the income tax on legal entities as well

as the contribution for Agricultural Insurance Organisation, (hereinafter

referred to as “Greek tax”).


taxes which are imposed after the date of signature of this Agreement in

addition to, or in place of, the existing taxes.

ARTICLE 2


(a) the term “Australia” includes all Territories of or under the authority of

Australia except the Territory of Papua New Guinea;

(b) the term “Greece” means the territory of the Hellenic Republic;

(c) the terms “Contracting State” and “other Contracting State” mean

Australia or Greece, as the context requires;


the Hellenic Republic for the Avoidance of Double Taxation of Income derived from

International Air Transport


(d) the term “Australian enterprise” means an enterprise that has its place of

effective management in Australia;

(e) the term “Greek enterprise” means an enterprise that has its place of

effective management in Greece;

(f) the term “enterprise of a Contracting State” means an Australian

enterprise or a Greek enterprise, as the context requires;

(g) the term “tax” means Australian tax or Greek tax, as the context

requires;

(h) the term “operation of aircraft in international traffic” means the

operation of aircraft in the carriage of persons, livestock, goods or mail

between—

(i) Australia and Greece;

(ii) Australia and any other country;

(iii) Greece and any other country;

(iv) countries other than Australia or Greece; and

(v) places within a country other than Australia or Greece,

and, in relation to an enterprise engaged in the operation of aircraft for

such carriage, includes the sale of tickets for such carriage and the

provision of services in connection with the loading or unloading of

aircraft engaged in such carriage, either for the enterprise itself or for

any other enterprise engaged in the operation of aircraft for such

carriage.

(2) In the application of the provisions of this Agreement by one of the

Contracting States, any term used but not defined herein shall, unless the

context otherwise requires, have the meaning which it has under the laws in

force in that Contracting State relating to the taxes to which this Agreement

applies.

ARTICLE 3

(1) Profits derived by an enterprise of a Contracting State from the

operation of aircraft in international traffic or arising from the carriage by air of

persons, livestock, goods or mail between places in that Contracting State, shall

be exempt from tax in the other Contracting State.

(2) The exemption provided in paragraph (1) of this Article shall also apply

to a share of the profits from the operation of aircraft in international traffic

derived by an enterprise of a Contracting State through participation in a pooled

service, in a joint air transport operation or in an international operating agency.

Agreement between the Government of Australia and the Government of the Hellenic

Republic for the Avoidance of Double Taxation of Income derived from International

Air Transport Schedule 12


ARTICLE 4

This Agreement shall enter into force on the fourteenth day after the date on

which each Contracting State shall have received from the other Contracting

State written notification that it has complied with all statutory and

constitutional requirements for the entry into force of the Agreement, and the

provisions of the Agreement shall have effect—

(a) as regards Australian tax, in respect of income derived from the first

day of March 1972 and thereafter;

(b) as regards Greek tax, in respect of income derived from the first day of

April 1972 and thereafter.

ARTICLE 5


State may, on or before the thirtieth day of June in any calendar year after the

year 1978, give notice of termination to the other Contracting State and in that

event this Agreement shall cease to be effective—

(a) as regards Australian tax, in respect of income derived from the first

day of March in the calendar year next following that in which the

notice of termination is given and thereafter; and

(b) as regards Greek tax, in respect of income derived from the first day of

April in the calendar year next following the year in which notice of

termination is given and thereafter.



DONE in duplicate at Canberra the fifth day of May, One thousand nine

hundred and seventy--seven in the English and Greek languages, both texts

being equally authoritative.

PHILLIP LYNCH C. TRICOUPIS


AUSTRALIA


HELLENIC REPUBLIC

Schedule 13 Agreement between Australia and the Kingdom of Belgium for the


Taxes on Income



and the Kingdom of Belgium for the




The Government of Australia and the Government of the Kingdom of

Belgium,




CHAPTER I


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered


(a) in Australia:



company;

(b) in Belgium:

the individual income tax (impôt des personnes physiques—

personenbelasting);

the corporate income tax (impôt des sociétés—

vennootschapsbelasting);

Agreement between Australia and the Kingdom of Belgium for the Avoidance of


Schedule 13


the income tax on legal entities (impôt des personnes morales—

rechtspersonenbelasting);

the income tax on non--residents (impôt des non--résidents—

belasting der nietverblijfhouders);

including the prepayments, the surcharges on these taxes and

prepayments, and the communal supplement to the individual income

tax.


taxes which are imposed by one of the Contracting States after the date of

signature of this Agreement in addition to, or in place of, the existing taxes. At

the end of each calendar year, the competent authority of each Contracting State

shall notify the competent authority of the other Contracting State of any

substantial changes which have been made in the laws of his State relating to

the taxes to which this Agreement applies.

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions














seabed and subsoil of the continental shelf;

(b) the term “Belgium” means the Kingdom of Belgium and, when used in

a geographical sense, means the territory of the Kingdom of Belgium

and includes any territory outside the national sovereignty of Belgium

which in accordance with international law has been or may hereafter



Taxes on Income


be designated, under the laws of Belgium concerning the continental

shelf, as an area within which the rights of Belgium with respect to the

seabed and the subsoil and their natural resources may be exercised;


Contracting State” mean Australia or Belgium, as the context requires;


of persons;


assimilated to a body corporate for tax purposes in the Contracting State

of which it is a resident;

(f) the term “tax” means Australian tax or Belgian tax, as the context

requires;

(g) the term “Australian tax” means tax imposed by Australia, being tax to


(h) the term “Belgian tax” means tax imposed by Belgium, being tax to


(i) the term “competent authority” means, in the case of Australia, the


case of Belgium, the Minister of Finance or his authorized

representative;

(j) the terms “enterprise of one of the Contracting States” and “enterprise

of the other Contracting State” means an enterprise carried on by a

resident of Australia or an enterprise carried on by a resident of

Belgium, as the context requires;


the singular.

(2) In this Agreement, the terms “Australian tax” and “Belgian tax” do not

include any charge imposed as a penalty under the law of either Contracting

State relating to the taxes to which this Agreement applies by virtue of Article

2.

(3) In the application of this Agreement by a Contracting State, any term

not otherwise defined shall, unless the context otherwise requires, have the





Schedule 13


ARTICLE 4

Residence


Contracting States—



(b) in the case of Belgium, if the person is a resident of Belgium for the

purposes of Belgian tax.

(2) In relation to income from sources in Belgium, a person who is subject

to Australian tax on income which is from sources in Australia shall not be

treated as a resident of Australia unless the income from sources in Belgium is

subject to Australian tax or, if that income is exempt from Australian tax, it is so

exempt solely because it is subject to Belgian tax.









in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States, or if he does not

have an habitual abode in either of them, he shall be deemed to be a

resident solely of the Contracting State with which his personal and

economic relations are the closer.





ARTICLE 5


(1) For the purposes of this Agreement, the term “permanent

establishment” means a fixed place of business in which the business of the

enterprise is wholly or partly carried on.



Taxes on Income




(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;















enterprise;



enterprise, such as advertising, scientific research or the supply of

information.



establishment if—










Schedule 13









(b) in so acting he manufactures or processes in that State for the enterprise
















permanent establishment outside both Contracting States, and whether an



CHAPTER III

TAXATION OF INCOME

ARTICLE 6



respect of the operation of mines or quarries or the exploitation of any natural





Taxes on Income




property situated in the Contracting State in which the land is situated.

(3) Ships, boats or aircraft shall not be regarded as real property.

(4) The provisions of paragraph (1) shall also apply to the income from real

property of an enterprise and to the income from real property used for the

performance of professional services.

ARTICLE 7

Business Profits





taxed in the other State, but only so much of them as is attributable to that











shall be allowed as deductions, expenses of the enterprise, being expenses

which are incurred for the purposes of the permanent establishment (including







the enterprise.







Schedule 13


person, provided that that law shall be applied, so far as the information


of this Article.



income dealt with in Articles 6, 8, 10, 11, 12, 14, 16 and 17 and in paragraph (1)

of Article 13.

(7) Notwithstanding the provisions of this Article, profits of an enterprise

of one of the Contracting States from carrying on a business of any form of

insurance, other than life insurance, may be taxed in the other Contracting State

according to the law of that State, provided that if the law in force at the date of

signature of this Agreement is varied (otherwise than in minor respects so as not

to affect its general character) the Contracting Governments shall consult with

each other with a view to agreeing to any amendment of this paragraph that may

be appropriate.

(8) The amount of the profits attributable to a permanent establishment

situated in Belgium of an enterprise carried on by a company that is a resident

of Australia may be taxed in Belgium at the rate fixed by the law of Belgium,

provided that such rate shall not exceed the highest rate applicable to profits of

a company which is a resident of Belgium.

(9) If Australia imposes on profits attributable to a permanent

establishment situated in Australia of an enterprise carried on by a company that

is a resident of Belgium any tax which is in addition to the tax which would be

chargeable on those profits if they were the profits of an enterprise carried on by

a company that is a resident of Australia, the Contracting Governments shall

consult with each other with a view to agreeing to such amendments to

paragraph (8) of this Article as may be appropriate.

ARTICLE 8











Taxes on Income


of a Contracting State through participation in a pool service, in a joint transport

operating organization or in an international operating agency.

(4) For the purposes of this Article, profits derived from the carriage of

passengers, livestock, mail, goods or merchandise shipped in a Contracting

State for discharge at another place in that State shall be treated as profits from

operations of ships or aircraft confined solely to the places in that State.

(5) The amount which shall be charged to tax in one of the Contracting

States as profits from operations of ships or aircraft in respect of which a

resident of the other Contracting State may be taxed in the first--mentioned

State under paragraph (2) or (3) shall not exceed 5 per cent of the amount paid

or payable (net of rebates) in respect of carriage in such operations.


ships or aircraft by a resident of one of the Contracting States whose principal

place of business is in the other Contracting State, nor shall it apply to profits

derived from the operation of ships or aircraft by a resident of a Contracting

State if those profits are derived otherwise than from the carriage of passengers,

livestock, mail, goods or merchandise.

ARTICLE 9

Associated Enterprise

(1) Where—




















Schedule 13








been expected to have accrued to the enterprise of the other State if the



independently with one another, then the first--mentioned State shall make such

adjustment as it considers appropriate to the amount of tax charged on those

profits in the first--mentioned State. In determining any adjustment, due regard

shall be had to the other provisions of this Agreement, and for this purpose the


other.

ARTICLE 10

Dividends




that other State.




cent of the gross amount of the dividends. This paragraph shall not affect the

taxation of the company in respect of the profits out of which the dividends are

paid.



Contracting State of which the company making the distribution is a resident. In

the case of Belgium, the term includes income, even when paid in the form of

interest, which is taxable under the head of income from capital invested by the

members of a company which is a resident of Belgium for the purposes of its

tax and is not a company with share capital.






Taxes on Income


other Contracting State, being the State of which the company paying the

dividends is a resident, and the holding in respect of which the dividends are

paid is effectively connected with that permanent establishment. In such a case,


(5) Dividends paid by a company which is a resident of Belgium, being

dividends to which a person who is not a resident of Australia is beneficially

entitled, shall be exempt from tax in Australia except insofar as the holding in

respect of which the dividends are paid is effectively connected with a

permanent establishment situated in Australia. Provided that this paragraph

shall not apply in relation to dividends paid by any company which is a resident

of Belgium for the purposes of Belgian tax and which is also a resident of

Australia for the purposes of Australian tax.

ARTICLE 11

Interest



that other State.






whether or not carrying a right to participate in the debtor’s profits, and interest

from any other form of indebtedness as well as all other income assimilated to

interest by the taxation law of the Contracting State in which the income arises.

The term does not include income which is paid in the form of interest but

which is, in accordance with paragraph (3) of Article 10, to be treated as

dividends.




other Contracting State, being the State in which the interest arises, and the

indebtedness giving rise to the interest is effectively connected with that

permanent establishment. In such a case, the provisions of Article 7 shall apply.


is that Contracting State itself or a political sub--division of that State or a local



Schedule 13


authority of that State or a person who is a resident of that State for the purposes

of its tax. Where, however—

(a) the person paying the interest is a resident of one of the Contracting

States and has in the other State or outside both States a permanent

establishment in connection with which the indebtedness on which the

interest is paid was incurred and the interest is borne by the permanent

establishment, then the interest shall be deemed to arise in the State

where the permanent establishment is situated;

(b) the person paying the interest is not a resident of either of the

Contracting States but has in one of the States a permanent

establishment in connection with which the indebtedness on which the

interest is paid was incurred and the interest is borne by the permanent

establishment, then the interest shall be deemed to arise in the State

where the permanent establishment is situated.








interest paid may be taxed in the Contracting State in which the interest arises

according to the law of that State.

ARTICLE 12

Royalties







(3) The term “royalties” in this Article means payments, whether periodical

or not, and however described or computed, to the extent to which they are paid

as consideration for the use of, or the right to use, any copyright, patent, design

or model, plan, secret formula or process, trade--mark, or other like property or





Taxes on Income


the supply of any assistance of an ancillary or subsidiary nature furnished as a






broadcasting.




other Contracting State, being the State in which the royalties arise, and the

asset giving rise to the royalties is effectively connected with that permanent

establishment. In such a case, the provisions of Article 7 shall apply.



authority of that State or a person who is a resident of that State for the purposes

of its tax. Where, however—

(a) the person paying the royalties is a resident of one of the Contracting

States and has in the other State or outside both States a permanent

establishment in connection with which the liability to pay the royalties

was incurred and the royalties are borne by the permanent

establishment, then the royalties shall be deemed to arise in the State

where the permanent establishment is situated;

(b) the person paying the royalties is not a resident of either of the

Contracting States but has in one of the States a permanent

establishment in connection with which the liability to pay the royalties

was incurred and the royalties are borne by the permanent

establishment, then the royalties shall be deemed to arise in the State

where the permanent establishment is situated.








royalties paid may be taxed in the Contracting State in which the royalties arise

according to the law of that State.



Schedule 13


ARTICLE 13


(1) Income from the alienation of real property may be taxed in the

Contracting State in which that property is situated.

(2) For the purposes of this Article—






land in one of the Contracting States or of rights to exploit, or to

explore for, natural resources in one of the Contracting States;


(i) where it consists of direct interests in or over land—in the

Contracting State in which the land is situated;


resources—in the Contracting State in which the natural

resources are situated or the exploration may take place; and



direct interests in or over land in one of the Contracting States

or of rights to exploit, or to explore for, natural resources in one

of the Contracting States—in the Contracting State in which the

assets or the principal assets of the company are situated.

(3) Subject to the provisions of paragraph (1), income from the alienation

of capital assets of an enterprise of a Contracting State shall be taxable only in

that Contracting State, but, where those assets form part of the business

property of a permanent establishment situated in the other Contracting State,

such income may be taxed in that other State.

ARTICLE 14









Taxes on Income








ARTICLE 15



and other similar remuneration derived by an individual who is a resident of one

of the Contracting States in respect of an employment shall be taxable only in

that State unless the employment is exercised in the other Contracting State. If

the employment is so exercised, the remuneration derived from that exercise





the first--mentioned State if—


exceeding in the aggregate 183 days in the year of income or in the

taxable period, as the case may be, of that other State; and




permanent establishment or a fixed base which the employer has in that

other State.





ARTICLE 16

Directors’ Fees




other State. In relation to remuneration of a director of a company derived from



Schedule 13


the company in respect of the discharge of day--to--day functions of a

managerial or technical nature, the provisions of Article 15 shall apply as if the


and as if references to “employer” were references to the company.

ARTICLE 17

Entertainers


by entertainers (such as theatrical, motion picture, radio or television artistes,




such accrues not to that entertainer but to another person, that income may,



ARTICLE 18


(1) Pensions, other than pensions to which Article 19 applies, and annuities

paid to a resident of one of the Contracting States shall be taxable only in that

State.





ARTICLE 19

Government Service

(1) Remuneration, other than a pension, paid to an individual in respect of

services rendered in the discharge of governmental functions to one of the

Contracting States or to a political sub--division of one of the Contracting States

or to a local authority of one of the Contracting States shall be taxable only in

that State. Such remuneration shall, however, be taxable only in the other

Contracting State if the services are rendered in that State and the recipient is a

resident of that State who—






Taxes on Income


(2) Any pension paid to an individual in respect of services rendered in the

discharge of governmental functions to one of the Contracting States or to a

political sub--division of one of the Contracting States or to a local authority of

one of the Contracting States shall be taxable only in that State. Such pension

shall, however, be taxable only in the other Contracting State if the recipient is a

citizen or national of that State and a resident of that State.

(3) The provisions of Articles 15, 16 and 18 shall apply to remuneration,

including pensions, paid in respect of services rendered in connection with any

business carried on by one of the Contracting States or by a political

sub--division of one of the Contracting States or by a local authority of one of


ARTICLE 20


(1) Salaries, wages and other similar remuneration which a professor or

teacher who is a resident of one of the Contracting States and who visits the

other Contracting State for a period not exceeding two years for the purpose of

teaching or carrying out advanced study or research at a university, college,

school or other recognized educational institution, receives for those activities

shall be taxable only in the first--mentioned State.

(2) This Article shall not apply to remuneration which a professor or

teacher receives for conducting research, if the research is undertaken primarily

for the private benefit of a specific person or persons.

ARTICLE 21

Students







ARTICLE 22




paragraph (3) or (4) of that Article is deemed for the purposes of this



Schedule 13


Agreement to be a resident solely of one of the Contracting States, derives

income from sources in that Contracting State or from sources outside both

Contracting States, that income shall be taxable only in that Contracting State.

ARTICLE 23

Source of Income

(1) Income derived by a resident of Belgium which, under any one or more

of Articles 6 to 8 and 10 to 17 may be taxed in Australia, shall for the purposes

of the income tax law of Australia be deemed to be income from sources in

Australia.

(2) Income derived by a resident of Australia which, under any one or more

of Articles 6 to 8 and 10 to 17 may be taxed in Belgium, shall for the purposes

of paragraph (1) of Article 24 and of the income tax law of Australia be deemed

to be income from sources in Belgium.

CHAPTER IV


ARTICLE 24

(1) In the case of Australia, double taxation shall be avoided as follows:

(a) Subject to the provisions of the law of Australia from time to time in

force which relate to the allowance of a credit against Australian tax of

tax paid in a country outside Australia (which shall not affect the

general principal hereof), Belgian tax paid, whether directly or by

deduction, in respect of income derived by a person who is a resident of

Australia from sources in Belgium (not including, in the case of a

dividend, tax paid in respect of the profits out of which the dividend is

paid) shall be allowed as a credit against Australian tax payable in

respect of that income.

(b) In the event that Australia should cease to allow a company which is a

resident of Australia a rebate in its assessment at the average rate of tax


Belgium and included in the taxable income of the company, the

Contracting Governments will enter into negotiations in order to

establish new provisions concerning the credit to be allowed by

Australia against its tax on the dividends.



Taxes on Income


(2) In the case of Belgium, double taxation shall be avoided as follows:

(a) Where a resident of Belgium derives income which may be taxed in

Australia in accordance with this Agreement and which is not subject to

the provisions of subparagraph (b) or (c) below, Belgium shall exempt

such income from tax but may, in calculating the amount of tax on the

remaining income of that resident, apply the rate of tax which would

have been applicable if such income had not been exempted.

(b) In the case of—

(i) dividends taxable in accordance with paragraph (2) of Article

10, and not exempt from Belgian tax according to

subparagraph (c) below;

(ii) interest taxable in accordance with paragraph (2) or (6) of

Article 11; and

(iii) royalties taxable in accordance with paragraph (2) or (6) of

Article 12, there shall be allowed as a credit against Belgian tax

relating to such income the fixed proportion in respect of

foreign tax for which provision is made under Belgian law,

under the conditions and at the rate fixed by such law, provided

that this rate shall not be less than the rate of tax which may be

levied in Australia in accordance with paragraph (2) of Article

10, paragraph (2) of Article 11 or paragraph (2) of Article 12.

(c) Where a company which is a resident of Belgium owns shares in a

company with share capital which is a resident of Australia and which

is subject to Australian tax on its profits, the dividends which are paid

to it by the latter company and which may be taxed in Australia in

accordance with paragraph (2) of Article 10 shall be exempt from the

corporate income tax in Belgium to the extent that exemption would

have been accorded if the two companies had been residents of

Belgium.

(d) Where, in accordance with Belgian law, losses of an enterprise carried

on by a resident of Belgium which are attributable to a permanent

establishment situated in Australia have been effectively deducted from

the profits of that enterprise for its taxation in Belgium, the exemption

provided in subparagraph (a) of this paragraph shall not apply in

Belgium to the profits of other taxable periods attributable to that

establishment to the extent that those profits have also been freed from

tax in Australia by reason of a deduction for the said losses.



Schedule 13


CHAPTER V

SPECIAL PROVISIONS

ARTICLE 25


(1) Where a resident of a Contracting State considers that the actions of the

competent authority of one or both of the Contracting States result or will result

for him in taxation not in accordance with this Agreement, he may,

notwithstanding the remedies provided by the national laws of those States,

present his case to the competent authority of the Contracting State of which he

is a resident. The case must be presented within three years from the first

notification of the action giving rise to taxation not in accordance with this

Agreement.





with this Agreement.



this Agreement.



Agreement.

ARTICLE 26



information as is necessary for the carrying out of this Agreement or of the


Agreement applies insofar as the taxation thereunder is not contrary to this






of, enforcement or prosecution in respect of, or the determination of appeals in



Taxes on Income


relation to, the taxes to which this Agreement applies and shall be used by that

competent authority only for such purposes.







State;




policy.

ARTICLE 27

Miscellaneous

(1) With respect to a company which is a resident of Belgium for the

purposes of Belgian tax, the provisions of this Agreement shall not limit the

taxation of that company in accordance with the Belgian law in the event of the

repurchase by the company of its own shares or in the event of the distribution

of its assets.

(2) Nothing in this Agreement shall affect the fiscal privileges of


under the provisions of special international Agreements.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 28

Entry Into Force

This Agreement shall come into force on the fifteenth day after the date on

which the Government of Australia and the Government of the Kingdom of

Belgium exchange notes through the diplomatic channel notifying each other

that the last of such things has been done as is necessary to give this Agreement

the force of law in Australia and in Belgium respectively, and thereupon this

Agreement shall have effect—



Schedule 13


(a) in Australia—


non--resident, in relation to income derived on or after

1 January in the calendar year immediately following that in

which the Agreement enters into force;

(ii) with respect to other Australian tax, in relation to income of any

year of income beginning on or after 1 July in the calendar year

immediately following that in which the Agreement enters into

force;

(b) in Belgium—

(i) with respect to all tax due at source, on income credited or

payable on or after 1 January in the calendar year immediately

following that in which the Agreement enters into force;

(ii) with respect to all tax other than tax due at source, on income of

any accounting period beginning on or after 1 January in the

calendar year immediately following that in which the

Agreement enters into force.

ARTICLE 29

Termination


Australia or the Government of the Kingdom of Belgium may, on or before

30 June in any calendar year beginning after the expiration of 5 years from the

date of its entry into force, give to the other Government through the diplomatic

channel written notice of termination and, in that event, this Agreement shall

cease to be effective—

(a) in Australia—







immediately following that in which the notice of termination is

given;



Taxes on Income


(b) in Belgium—

(i) with respect to all tax due at source, on income credited or

payable on or after 1 January in the calendar year immediately


(ii) with respect to all tax other than tax due at source, on income of

any accounting period beginning on or after 1 January in the

calendar year immediately following that in which the notice of




DONE in duplicate at Canberra this thirteenth day of October, One thousand

nine hundred and seventy--seven in the English, French and Dutch languages,

the three texts being equally authentic.

PHILLIP R. LYNCH GEORGES BARTHELEMY

FOR THE GOVERNMENT FOR THE GOVERNMENT OF THE

OF AUSTRALIA KINGDOM OF BELGIUM

Protocol amending the Agreement between Australia and the Kingdom of Belgium for

the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to

Taxes on Income signed at Canberra on 13 October 1977 Schedule 13A


Schedule 13A—Protocol amending the

Agreement between Australia and the

Kingdom of Belgium for the



respect to Taxes on Income signed at

Canberra on 13 October 1977 Section 3

Australia and the Kingdom of Belgium,

Desiring to amend the Agreement between Australia and the Kingdom of

Belgium for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income signed at Canberra on 13 October 1977

(in this Protocol referred to as ‘the Agreement’),


ARTICLE I

Article 7 of the Agreement shall be amended by deleting paragraphs (8) and

(9).

ARTICLE II

Article 9 of the Agreement shall be amended by:

(a) deleting from paragraph (2) “of this Article” and substituting “of

paragraph (1),” and

(b) adding at the end thereof the following paragraph:

‘(4) Notwithstanding the provision of this Article, an enterprise of

one of the Contracting States may be taxed by that State as if

this Article had not come into effect but, so far as it is

practicable to do so, in accordance with the principles of

paragraph (1).’.

Schedule 13A Protocol amending the Agreement between Australia and the Kingdom

of Belgium for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income signed at Canberra on 13 October 1977


ARTICLE III

Article 10 of the Agreement shall be amended by adding at the end thereof

the following paragraph:

‘(6) Nothing in this Agreement shall be construed as preventing one

of the Contracting States from imposing on the profits of a

company which is a resident of the other Contracting State tax

in addition to or at a higher rate than the tax which would be

imposed on the profits of a company which is a resident of the

first--mentioned State. However, if the provisions of the law in

force in either Contracting State which relate to such additional

tax or such higher rate are varied (otherwise than in minor

respects so as not to affect its general character) the Contracting

States shall consult with each other with a view to agreeing to

such amendments to this Article as may be appropriate.’.

ARTICLE IV

Article 12 of the Agreement shall be amended by omitting paragraph (3) and

substituting the following paragraph:

‘(3) The term ‘royalties’ in this Article means payments (including

credits), whether periodical or not, and however described or

computed, to the extent to which they are made as consideration

for the use of, or the right to use, any copyright, patent, design

or model, plan, secret formula or process, trade--mark or other

like property or right, or industrial, commercial or scientific

equipment, or for the supply of scientific, technical, industrial

or commercial knowledge or information, or for the supply of

any assistance of an ancillary or subsidiary nature furnished as a

means of enabling the application or enjoyment of such

knowledge or information or any other property or right to

which this Article applies, and includes any payments

(including credits) to the extent to which they are made as

consideration for the use of, or the right to use, motion picture

films, films or video tapes for use in connection with television

or tapes for use in connection with radio broadcasting, or for

total or partial forbearance in respect of the use or supply of a

property or right referred to in this paragraph.’.

Protocol amending the Agreement between Australia and the Kingdom of Belgium for


Taxes on Income signed at Canberra on 13 October 1977 Schedule 13A


ARTICLE V

This Protocol, which shall form an integral part of the Agreement, shall enter

into force on the fifteenth day after the date on which the Contracting States

exchange notes through the diplomatic channel notifying each other that the last

of such things has been done as is necessary to give this Protocol the force of

law in Australia and in Belgium respectively, and thereupon this Protocol shall

have effect:

(a) in Australia, in relation to income of any year of income beginning on

or after 1 July in the calendar year immediately following that in which

the Protocol enters into force;

(b) in Belgium, on income of any accounting period beginning on or after

1 January in the calendar year immediately following that in which the

Protocol enters into force.



DONE in duplicate at Canberra this twentieth day of March One thousand

nine hundred and eighty--four in the English, French and Dutch languages, the

three texts being equally authentic.

PAUL KEATING A. DOMUS

FOR AUSTRALIA FOR THE KINGDOM OF BELGIUM


the Republic of the Philippines for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to Taxes on Income




Government of the Republic of the

Philippines for the Avoidance of



on Income

The Government of Australia and the Government of the Republic of the

Philippines,




Chapter I


ARTICLE 1

Personal Scope

(1) This Agreement shall apply to persons who are residents of one or both


(2) However, nothing in this Agreement shall prevent the Philippines from

taxing its own citizens, who are not residents of the Philippines, in accordance

with Philippine law.

ARTICLE 2

Taxes Covered


(a) in Australia:



(b) in the Philippines:

Agreement between the Government of Australia and the Government of the Republic

of the Philippines for the Avoidance of Double Taxation and the Prevention of Fiscal



the income taxes imposed by the Government of the Republic of the

Philippines.



of this Agreement in addition to, or in place of, the existing taxes. At the end of



changes which have been made in the laws of his State relating to the taxes to

which this Agreement applies.

Chapter II

DEFINITIONS

ARTICLE 3

General Definitions











force a law of Australia or of a State or part of Australia or of a

Territory aforesaid dealing with the exploitation of any of the

natural resources of the sea--bed and subsoil of the continental

shelf;

(b) the term “Philippines” means the Republic of the Philippines and when

used in a geographical sense means the national territory comprising the

Republic of the Philippines;


Contracting State” mean Australia or the Philippines, as the context

requires;

(d) the term “person” means an individual, an estate, a trust, a company and

any other body of persons;






treated as a company or a body corporate for tax purposes;



resident of Australia or an enterprise carried on by a resident of the

Philippines, as the context requires;

(g) the term “tax” means Australian tax or Philippines tax, as the context

requires;



(i) the term “Philippine tax” means tax imposed by the Philippines, being



Commissioner of Taxation or his authorized representative, and, in the

case of the Philippines, the Minister of Finance or his authorized

representative;

(k) the term “international traffic”, in relation to the operation of ships, or

aircraft by a resident of one of the Contracting States, means operations

of ships or aircraft other than operations of ships or aircraft confined

solely to places in the other Contracting State.

(2) In this Agreement, the terms “Australian tax” and “Philippine tax” do

not include any penalty or interest imposed under the law of either Contracting


2.

(3) For the purposes of this Agreement, the carriage of passengers,

livestock, mail, goods or merchandise shipped in one of the Contracting States

for discharge at another place in that State shall be treated as operations of ships

or aircraft confined solely to places in that State.


not defined in this Agreement shall, unless the context otherwise requires, have

the meaning which it has under the laws of that Contracting State relating to the






ARTICLE 4

Residence




resident of Australia for the purposes of Australian tax;

(b) in the case of the Philippines—

(i) if the person is a company or an entity which is incorporated,

created or organized in the Philippines or under its laws and is

treated as a body corporate for the purposes of Philippine tax;

(ii) if the person, not being a company or an entity treated as a

company or body corporate for the purposes of Philippine tax,

is a resident of the Philippines for the purposes of Philippine

tax.

(2) In relation to income from sources in the Philippines, a person who is

subject to Australian tax on income which is from sources in Australia shall not

be treated as a resident of Australia unless the income from sources in the

Philippines is subject to Australian tax or, if that income is exempt from

Australian tax, it is so exempt solely because it is subject to Philippine tax.

(3) Where by reason of the preceding provisions of this Article an

individual is a resident of both Contracting States, then his status shall be

determined in accordance with the following rules—







(4) For the purposes of the last preceding paragraph, an individual’s

citizenship of a Contracting State shall be a factor in determining the degree of

his personal and economic relations with that Contracting State.

(5) Where by reason of the provisions of paragraph (1), a person other than


be a resident solely of the Contracting State in which it is incorporated, created

or organized.





ARTICLE 5







(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, oil or gas well, quarry or other place of extraction of natural

resources;


(h) a building site or construction, installation or assembly project, or

supervisory activities in connection therewith where such site, project

or activity continues for more than six months;

(i) premises used as a sales outlet;

(j) a warehouse, in relation to a person providing storage facilities for

others;

(k) a place in one of the Contracting States through which an enterprise of

the other Contracting State furnishes services, including consultancy

services, for a period or periods aggregating more than six months in

any taxable year or year of income, as the case may be, in relation to a

particular project, or to any project connected therewith.

(3) Notwithstanding the preceding provisions of this Article, an enterprise

shall not be deemed to have a permanent establishment merely by reason of—

(a) the use of facilities solely for the purpose of storage, display or








enterprise;










establishment if substantial equipment is being used in that State for more than

six months by, for or under contract with the enterprise.








(b) he has no such authority, but habitually maintains on behalf of the

enterprise in the first--mentioned State a stock of goods or merchandise

from which on behalf of the enterprise he regularly delivers goods or

merchandise for use or consumption in that State; or

(c) in so acting, he manufactures or processes in that State for the enterprise







However, when the activities of such an agent are devoted wholly or almost

wholly on behalf of the enterprise, he shall not be considered to be an agent of

independent status within the meaning of this paragraph if it is shown that the

transactions between the agent and the enterprise were not made under

arms--length conditions. In such a case, the provisions of paragraph (5) shall

apply.










Chapter III

TAXATION OF INCOME

ARTICLE 6


(1) Income from real property may be taxed in the Contracting State in

which the real property is situated.

(2) The term “real property” shall have the meaning which it has under the

laws in force in the Contracting State in which the property in question is

situated. The term shall in any case include rights to royalties and other

payments in respect of the operation of mines, oil or gas wells, or quarries or in

respect of the exploitation of any natural resource and those rights shall be

regarded as situated where the mines, oil or gas wells, quarries or natural

resources are situated. Ships or aircraft shall not be regarded as real property.



property situated where the land to which the lease or other direct interest

relates is situated.

(4) The provisions of paragraphs (1) and (3) shall also apply to income



ARTICLE 7

Business Profits





taxed in the other State, but only so much of them as is attributable to—

(a) that permanent establishment; or

(b) sales within that other Contracting State of goods or merchandise of the

same or a similar kind as those sold, or other business activities of the

same or a similar kind as those carried on through that permanent

establishment if the sale or the business activities had been made or

carried on in that way with a view to avoiding taxation in that other

State.


















paid those expenses whether incurred in the Contracting State in which the




the enterprise.







of this Article.

(6) For the purposes of this Article, the profits of an enterprise do not

include income from the operation of aircraft in international traffic and, except

as provided in the Articles referred to in this paragraph, do not include items of

income dealt with in Articles 6, 8, 10, 11, 12, 13, 14, 16 and 17.

(7) The profits of an enterprise of one of the Contracting States from the

carrying on in the other Contracting State of a business of any form of insurance

other than life insurance may be taxed in the other Contracting State in

accordance with the law of that other State relating specifically to the taxation

of any person who carries on such business, and Article 24 shall apply for the

elimination of double taxation as if the profits so taxed were attributable to a

permanent establishment of the enterprise in the State imposing the tax.





ARTICLE 8

Shipping

(1) The tax payable in a Contracting State by a resident of the other

Contracting State in respect of profits from the operation of ships in

international traffic shall not exceed the lesser of—

(a) one and one--half per cent of the gross revenues derived from sources in

that State; and

(b) the lowest rate of Philippine tax that may be imposed on profits of the

same kind derived under similar circumstances by a resident of a third

State.

(2) Paragraph (1) shall apply in relation to the share of the profits from the

operation of ships derived by a resident of one of the Contracting States through

participation in a pool service, in a joint transport operating organization or in

an international operating agency.

ARTICLE 9


(1) Where—


































had to the other provisions of this Agreement in relation to the nature of the

income, and for this purpose the competent authorities of the Contracting States

shall, if necessary, consult each other.

ARTICLE 10

Dividends




that other State.



according to the law of that State, but the tax so charged shall—

(a) in the case of dividends derived by a company, not exceed 15 per cent

of the gross amount of the dividends where relief, either by way of

rebate or credit as described in paragraph (2) of Article 24 or relief by

way of credit as described in the second sentence of paragraph (4) of

Article 24, is given to the beneficial owner of the dividends; and

(b) in any other case, not exceed 25 per cent of the gross amount of the

dividends.

Nothing in this paragraph shall affect the taxation of a company in respect of

profits out of which dividends are paid.











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 that permanent establishment or fixed base.

In such a case, the provisions of Article 7 or Article 14, as the case may be,

shall apply.





are paid is effectively connected with a permanent establishment or fixed base


relation to dividends paid by a company which is a resident of Australia for the

purposes of Australian tax and which is also a resident of the Philippines for the

purposes of Philippine tax.

(6) The Philippines may impose in accordance with its domestic law, apart

from the corporate income tax, a tax on remittances of profits by a branch to its

Head Office provided that the tax so imposed shall not exceed 15 per cent of the

amount remitted.

(7) Australia may impose an income tax (in this paragraph called a “branch

profits tax”) on the reduced taxable income of a company that is a resident of

the Philippines in addition to the income tax (in this paragraph called “the

general income tax”) payable by the company in respect of its taxable income;

provided that any branch profits tax so imposed in respect of a year of income

shall not exceed 15 per cent of the amount by which the reduced taxable income

of that year of income exceeds the general income tax payable in respect of the

reduced taxable income of that year of income.

ARTICLE 11

Interest



that other State.





securities or from bonds or debentures and interest from any other form of





indebtedness (whether or not secured by mortgage and whether or not carrying

a right to participate in profits) as well as all other income assimilated to interest

by the taxation law of the Contracting State in which the income arises.



States, carries on business in the other Contracting State in which the interest

arises through a permanent establishment situated therein, or performs in that

other State independent personal services from a fixed base situated therein, and

the indebtedness giving rise to the interest is effectively connected with that


7 or Article 14, as the case may be, shall apply.


is that State itself or a political subdivision of that State or a local authority of

that State or a person who is a resident of that State for the purposes of its tax.


of the Contracting States or not, has in a Contracting State or outside both

Contracting States a permanent establishment or fixed base in connection with

which the indebtedness on which the interest is paid was incurred, and the

interest is borne by the permanent establishment or fixed base, then the interest

shall be deemed to arise where the permanent establishment or fixed base is

situated.









State, but subject to the other provisions of this Agreement.

(7) Interest derived by the Government of a Contracting State, or by any

other body exercising governmental functions in, or in a part of, a Contracting

State, or by a bank performing central banking functions in a Contracting State,

shall be exempt from tax in the other Contracting State.

(8) The Philippine tax on interest arising in the Philippines in respect of

public issues of bonds, debentures or similar obligations and paid by a company

which is a resident of the Philippines to a resident of Australia shall not exceed

10 per cent of the gross amount of the interest.





(9) The principles set forth in paragraphs (1) to (7) inclusive of Article 5

shall be applied in determining for the purposes of this Article whether there is

a permanent establishment outside both Contracting States, and whether an



ARTICLE 12

Royalties




(2) Such royalties may also be taxed in the Contracting State in which they

arise, and according to the law of that State. However, the tax so charged shall

not exceed—

(a) 15 per cent of the gross amount of the royalties where the royalties are

paid by an enterprise registered with the Philippine Board of

Investments and engaged in preferred areas of activities; and

(b) in all other cases, 25 per cent of the gross amount of the royalties.

(3) The term “royalties” in this Article means payments or credits, whether


they are made as consideration for—

(a) the use of, or the right to use, any copyright, patent, design or model,

plan, secret formula or process, trademark, or other like property or

right;

(b) the use of, or the right to use, any industrial, commercial or scientific

equipment;


or information;



such property or right as is mentioned in paragraph (a), any such

equipment as is mentioned in paragraph (b) or any such knowledge or

information as is mentioned in paragraph (c);

(e) the use of, or the right to use—

(i) motion picture films;

(ii) films or video tapes for use in connection with television; or






(f) total or partial forbearance in respect of the use of a property or right

referred to in this paragraph.



States, carries on business in the other Contracting State in which the royalties

arise through a permanent establishment situated therein, or performs in that


the asset giving rise to the royalties is effectively connected with that permanent

establishment or fixed base. In such a case, the provisions of Article 7 or Article

14, as the case may be, shall apply.



authority of that State or a person who is a resident of that State for purposes of

its tax. Where, however, the person paying the royalties, whether he is a

resident of one of the Contracting States or not, has in the other Contracting

State or outside both Contracting States a permanent establishment or fixed base

in connection with which the liability to pay the royalties was incurred, and the

royalties are borne by the permanent establishment or fixed base, then the

royalties shall be deemed to arise where the permanent establishment or fixed

base is situated.










(7) The principles set forth in paragraphs (1) to (7) inclusive of Article 5

shall be applied in determining for the purposes of this Article whether there is

a permanent establishment outside both Contracting States, and whether an







ARTICLE 13





(a) the term “real property” shall have the meaning which it has under the

laws in force in the Contracting State in which the property in question

is situated and shall include—

















of the Contracting States in the Contracting State in which the



of capital assets of an enterprise of one of the Contracting States or available to

a resident of one of the Contracting States for the purpose of performing

professional services or other independent activities shall be taxable only in that

Contracting State, but, where those assets form part of the business property of

a permanent establishment or fixed base situated in the other Contracting State,

such income may be taxed in that other State.





ARTICLE 14




activities of a similar character shall be taxable only in that State. However, if

such an individual—

(a) has a fixed base regularly available to him in the other Contracting State

for the purpose of performing his activities; or

(b) in a year of income or taxable year, as the case may be, stays in the

other Contracting State for a period or periods aggregating 183 days for

the purpose of performing his activities; or

(c) derives, in a year of income or taxable year, as the case may be, from

residents of the other Contracting State gross remuneration in that State

exceeding ten thousand Australian dollars or its equivalent in Philippine

pesos from performing his activities,

so much of the income derived by him as is attributable to activities so

performed may be taxed in the other State.

(2) The Treasurer of Australia and the Minister of Finance of the

Philippines may agree in letters exchanged for the purpose to variations in the

amount specified in subparagraph (c) of paragraph (1) and any variations so




activities, as well as in the exercise of independent activities of physicians,


ARTICLE 15



and other similar remuneration derived by an individual who is a resident of one

of the Contracting States in respect of an employment shall be taxable only in

that State unless the employment is exercised in the other Contracting State. If

the employment is so exercised, such remuneration as is derived from that

exercise may be taxed in that other State.










exceeding in the aggregate 183 days in the year of income or taxable

year, as the case may be, of that other State; and





other State.





ARTICLE 16

Directors’ Fees




other State. In relation to remuneration of a director of a company derived from

the company in respect of the discharge of day--to--day functions of a

managerial or technical nature, the provisions of Article 15 shall apply as if the


and as if references to “employer” were references to the company.

ARTICLE 17

Entertainers













(3) Notwithstanding the provisions of paragraph (1) and Articles 14 and 15,

income derived from activities performed in a Contracting State by entertainers

shall be exempt from tax in that Contracting State if the visit to that State is

substantially supported or sponsored by the other Contracting State and the

entertainer is certified as qualifying under this provision by the competent

authority of that other State.

ARTICLE 18


(1) Pensions (including government pensions) and annuities paid to a

resident of one of the Contracting States shall be taxable only in that State.

However, pensions paid by a Philippine enterprise under a pension plan not

registered under Philippine law may be taxed in the Philippines.





ARTICLE 19

Government Service

(1) Remuneration (other than a pension) paid by a Contracting State or a

political subdivision of that State or a local authority of that State to any

individual in respect of services rendered in the discharge of governmental

functions shall be taxable only in that State. However, such remuneration shall

be taxable only in the other Contracting State if the services are rendered in that

State and the recipient is a resident of that State who—






by one of the Contracting States or a political sub--division of one of the States

or a local authority of one of the States. In such a case the provisions of Articles

15 and 16 shall apply.

ARTICLE 20


(1) Remuneration which a professor or teacher who is a resident of one of

the Contracting States and who visits the other Contracting State for a period





not exceeding two years for the purpose of teaching or carrying out advanced

study or research at a university, college, school or other educational institution

receives for those activities shall be taxable only in the first--mentioned State.

(2) This Article shall not apply to remuneration which a professor or

teacher receives for conducting research if the research is undertaken primarily

for the private benefit of a specific person or persons.

(3) For the purposes of paragraph (1), the term “remuneration” shall

include remittances from sources outside the other State sent to enable the

professor or teacher to carry out the purposes referred to in paragraph (1).

ARTICLE 21

Students and Trainees

Where a student or trainee, who is a resident of one of the Contracting States

or who was a resident of that State immediately before visiting the other

Contracting State and who is temporarily present in the other State solely for the

purpose of his education or training, receives remittances from sources outside

the other State for the purpose of his maintenance or education, those payments

shall be exempt from tax in the other State.

ARTICLE 22


Where a person who by reason of the provisions of paragraph (1) of Article



Agreement to be a resident solely of one of the Contracting States derives



ARTICLE 23

Source of Income

Income derived by a resident of one of the Contracting States which, under

any one or more of Articles 6 to 8 and 10 to 17 may be taxed in the other

Contracting State, shall, for the purposes of Article 24 and of the income tax

law of that other State, be deemed to be income from sources in that other State.





Chapter IV


ARTICLE 24




hereof), Philippine tax paid, whether directly or by deduction, in respect of

income derived by a person who is a resident of Australia from sources in the

Philippines (excluding, in the case of dividends, tax paid in respect of the profits

out of which the dividends are paid except to the extent that the provisions of

paragraph (2) may permit that tax to be included) shall be allowed as a credit

against Australian tax payable in respect of that income.

(2) A company which is a resident of Australia is, in accordance with the

provisions of the taxation law of Australia in force at the date of signature of

this Agreement, entitled to a rebate in its assessment at the average rate of tax

payable by the company in respect of dividends that are included in its taxable

income and are received from a company that is a resident of the Philippines.

However, should the law so in force be amended so that the rebate in relation to

the dividends ceases to be allowable under that law, credit shall be allowed to

the first--mentioned company under paragraph (1) for the Philippine tax paid on

the profits out of which the dividends are paid, but only if that company

beneficially owns at least 10 per cent of the paid--up share capital of the

second--mentioned company.

(3) For the purposes of paragraph (1) and of the income tax law of

Australia—

(a) a resident of Australia deriving income from sources in the Philippines,

consisting of royalties to which sub--paragraph (a) of paragraph (2) of

Article 12 applies, shall be deemed to have paid, in addition to any

Philippine tax actually paid, Philippine tax in an amount equal to 5% of

the gross amount of the royalties; and

(b) the amount of the said royalties shall be deemed to be the amount that

would have been the amount of the royalties if no Philippine tax had

been paid, increased by 5%.

(4) In accordance with the provisions and subject to the limitations of the

law of the Philippines (as it may be amended from time to time without

changing the general principle hereof), the Philippines shall allow to a resident

of the Philippines as a credit against the Philippine tax the appropriate amount





of taxes paid or accrued to Australia. In the case of a Philippine corporation

owning more than 50 per cent of the voting stock of an Australian corporation

from which it receives dividends in any taxable year, the Philippines shall also

allow credit for the appropriate amount of taxes paid or accrued to Australia by

an Australian corporation paying such dividends with respect to the profits out

of which such dividends are paid. Such appropriate amount shall be based upon

the amount of tax paid or accrued to Australia, but the credit shall not exceed

the limitations (for the purpose of limiting the credit to the Philippine tax on

income from sources within Australia, and on income from sources outside the

Philippines) provided by Philippine law for the taxable year.

Chapter V

SPECIAL PROVISIONS

ARTICLE 25


(1) Where a resident of one of the Contracting States considers that the

actions of the competent authority of one or both of the Contracting States result

or will result for him in taxation not in accordance with this Agreement, he

may, notwithstanding the remedies provided by the national laws of those

States, present his case to the competent authority of the Contracting State of

which he is a resident. The case must be presented in writing within two years

from the first notification of the action.








this Agreement.



Agreement.





ARTICLE 26












relation to, the taxes to which this Agreement applies and shall be used only for

such purposes.







State;




policy.

ARTICLE 27



consular officals under the general rules of international law or under the


ARTICLE 28

Miscellaneous

If, under any Agreement or Convention concluded by the Philippines, a

resident of any other country is exempt from—

(a) the Philippine income tax on gross billings relating to the operation of

aircraft in international traffic; or





(b) the Philippine business tax on gross receipts relating to the operation of

ships or aircraft in international traffic,

the Philippines will grant a corresponding exemption to residents of Australia

and Australia will grant a corresponding exemption to residents of the

Philippines.

Chapter VI

FINAL PROVISIONS

ARTICLE 29

Entry into Force


be exchanged at Canberra, Australia as soon as possible.

(2) The Agreement shall enter into force upon the date of exchange of the

instruments of ratification and its provisions shall have effect:

(a) in Australia—



1 January in the calendar year in which the exchange of

instruments of ratification takes place;


year of income beginning on or after 1 July in that calendar

year;

(b) in the Philippines—

(i) in respect of tax withheld at the source on amounts paid to

non--residents on or after the first day of January in the calendar

year in which the exchange of instruments of ratification takes

place; and

(ii) in respect of other taxes for taxable years beginning on or after

the first day of January in that calendar year.





ARTICLE 30

Termination


State may, on or before June 30 in any calendar year after the fifth year

following the exchange of the instruments of ratification, give to the other

Contracting State, through the diplomatic channel, written notice of termination

and in such event the Agreement shall cease to have effect:

(a) in Australia—



1 January in the calendar year next following that in which the

written notice of termination takes place;


year of income beginning on or after 1 July in the next

following calendar year;

(b) in the Philippines—

(i) in respect of tax withheld at the source on amounts paid to

non--residents on or after the first day of January in the calendar

year next following that in which the written notice of

termination takes place; and

(ii) in respect of other taxes for taxable years beginning on or after

the first day of January in the next following calendar year.



DONE in duplicate at Manila this 11th day of May One thousand nine

hundred and seventy nine in the English language.

R.V. GARLAND CESAR VIRATA


OF AUSTRALIA OF THE REPUBLIC OF

THE PHILIPPINES

Schedule 15 Agreement between Australia and Switzerland for the Avoidance of

Double Taxation with respect to Taxes on Income



and Switzerland for the Avoidance of

Double Taxation with respect to Taxes

on Income Section 3

The Government of Australia and the Swiss Federal Council,

Desiring to conclude an Agreement for the avoidance of double taxation

with respect to taxes on income,


Chapter I


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered


(a) in Australia:

The Australian income tax, including the additional tax upon the

undistributed amount of the distributable income of a private company

and also income tax upon the reduced taxable income of a non--resident

company;

(b) in Switzerland:

The Federal, cantonal and communal taxes on income (total income,

earned income, income from capital, industrial and commercial profits

and other items of income).

(2) This Agreement shall also apply to any indentical or substantially

similar taxes which are imposed after the date of signature of this Agreement in

addition to, or in place of, the existing taxes. At the end of each calendar year,

the competent authority of each Contracting State shall notify the competent

Agreement between Australia and Switzerland for the Avoidance of Double Taxation

with respect to Taxes on Income Schedule 15


authority of the other Contracting State of any substantial changes which have

been made in the laws of his State relating to the taxes to which this Agreement

applies.

(3) In this Agreement, the term “Australian tax” means tax imposed by

Australia, being tax to which this Agreement applies; the term “Swiss tax”

means tax imposed in Switzerland, being tax to which this Agreement applies;

and the term “tax” means Australian tax or Swiss tax, as the context requires;

but the terms “Australian tax” and “Swiss tax” do not include any penalty or

interest imposed under the law in force in either Contracting State relating to the


(4) This Agreement shall not apply to Federal anticipatory tax withheld in

Switzerland at the source on prizes in a lottery.

Chapter II

DEFINITIONS

ARTICLE 3

General Definitions















(b) the term “Switzerland” means the Swiss Confederation;


Contracting State” mean Australia or Switzerland, as the context

requires;

(d) the term “person” includes an individual, a company and any other

body of persons;




(e) the term “company” includes any body or association corporate or

unincorporate which is treated as a company or body corporate for tax

purposes;




Switzerland, as the context requires;

(g) the term “competent authority” means, in the case of Australia, the


case of Switzerland, the Director of the Federal Tax Administration or

his authorized representative.

(2) In the application of this Agreement by one of the Contracting States,

any term not otherwise defined shall, unless the context otherwise requires,

have the meaning which it has under the laws of that Contracting State relating

to the taxes to which this Agreement applies.

ARTICLE 4

Residence

(1) (a) For the purposes of this Agreement, a person is a resident of

Australia if the person is a resident of Australia for purposes of

Australian tax. However, in relation to income from sources in

Switzerland, a person who is subject to Australian tax on income

which is from sources in Australia shall not be treated as a resident

of Australia unless the income from sources in Switzerland is

subject to Australian tax or, if that income is exempt from

Australian tax, it is so exempt solely because it is subject to Swiss

tax.

(b) For the purposes of this Agreement, a person is a resident of

Switzerland if the person is subject to unlimited tax liability in

Switzerland.

(2) Where by reason of the preceding provisions of this Article an

individual is a resident of both Contracting States, then his status shall be

determined in accordance with the following rules:














ARTICLE 5







(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;















enterprise;









establishment if—






























applied in determining for the purposes of this Agreement whether an






Chapter III

TAXATION OF INCOME

ARTICLE 6


(1) Income from real property may be taxed in the Contracting State in

which the real property is situated.

(2) The term “real property” shall have the meaning which it has under the

laws in force in the Contacting State in which the property in question is

situated. The term shall in any case include rights to royalties and other

payments in respect of the operation of mines or quarries or of the exploitation

of any natural resource, which rights shall be regarded as situated where the

mines, quarries or natural resource are situated. Ships, boats or aircraft shall not

be regarded as real property.

(3) The provisions of paragraph (1) shall apply to income derived from the




property situated where the land is situated.

(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the

income from real property of an enterprise and to income from real property

used for the performance of independent personal services.

ARTICLE 7

Business Profits








the Contracting States carries on business in the other Contacting State through













executive and general adminstrative expenses so incurred) and which would be






the enterprise.

(5) Where profits include items of income which are dealt with separately

in other Articles of this Agreement, then the provisions of those Articles shall


ARTICLE 8










joint transport operating organization or in an international operating agency.


ships or aircraft of passengers, livestock, mail, goods or merchandise shipped in

one of the Contracting States for discharge at another place in that State shall be

treated as profits from operations of ships or aircraft confined solely to places in

that State.

(5) The amount which shall be charged to tax in one of the Contracting

States as profits from the operation of ships or aircraft in respect of which a

resident of the other Contracting State may be taxed in the first--mentioned

State under paragraph (2) or (3) shall not exceed 5 per cent of the amount paid

or payable (net of rebates) in respect of carriage in such operations.


ships or aircraft by a resident of one of the Contracting States whose principal

place of business is in the other Contracting State, nor shall it apply to profits

derived from the operation of ships or aircraft by a resident of one of the




Contracting States if those profits are derived otherwise than from the carriage

of passengers, livestock, mails, goods or merchandise. In such cases, the


ARTICLE 9


Where—














ARTICLE 10

Dividends




that other State.










States, carries on business in the other Contracting State, being the 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 any such case, the provisions of Article 7 or

Article 14, as the case may be, shall apply.





are paid is effectively connected with a permanent establishment situated in that

other State. Provided that this paragraph shall not apply in relation to dividends

paid by any company which is a resident of Australia for the purposes of

Australian tax and which is also a resident of Switzerland for the purposes of

Swiss tax.

ARTICLE 11

Interest



that other State.











States, carries on business in the other Contracting State, being the State in

which the interest arises, through a permanent establishment situated therein or

performs in that other State independent personal services from a fixed base

situated therein and the indebtedness giving rise to the interest is effectively

connected with the permanent establishment or fixed base. In any such case, the

provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Interest shall be deemed to arise in one of the Contracting States when

the payer is that Contracting State itself or a political sub--division of that State

or a local authority of that State or a person who is a resident of that State for

the purposes of its tax. Where, however, the person paying the interest, whether




he is a resident of one of the Contracting States or not, has in one of the

Contracting States a permanent establishment or a fixed base in connection with

which the indebtedness on which the interest is paid was incurred, and such

interest is borne by such permanent establishment or fixed base, then such

interest shall be deemed to arise in the State in which the permanent











ARTICLE 12

Royalties

(1) Royalties arising in one of the Contracting States being royalties to






(3) The term “royalties” in this Article means payments (including credits),

whether periodical or not and however described or computed, to the extent to

which they are consideration for the use of, or the right to use, any copyright,

patent, design or model, plan, secret formula or process, trademark, or other like

property or right, or industrial, commercial or scientific equipment, or for the

supply of scientific, technical, industrial or commercial knowledge or

information, or any assistance of an ancillary and subsidiary nature furnished as

a means of enabling the application or enjoyment of such knowledge or

information or any other property or right to which this Article applies, or for



broadcasting, or for total or partial forbearance in respect of the use of a







States, carries on business in the other Contracting State, being the State in

which the royalties arise, through a permanent establishment situated therein or


situated therein and the asset giving rise to the royalties is effectively connected

with that permanent establishment or fixed base. In any such case, the


(5) Royalties shall be deemed to arise in one of the Contracting States

when the payer is that Contracting State itself or a political sub--division of that

State or a local authority of that State or a person who is a resident of that State

for the purposes of its tax. Where, however, the person paying the royalties,

whether he is a resident of one of the Contracting States or not, has in one of the

Contracting States a permanent establishment or a fixed base in connection with

which the obligation to pay the royalties was incurred, and such royalties are

borne by such permanent establishment or fixed base, then such royalties shall

be deemed to arise in the State in which the permanent establishment or fixed

base is situated.










ARTICLE 13


(1) Income or gains from the alienation of real property or of a direct

interest in or over land or of a right to exploit, or to explore for, a natural

resource may be taxed in the Contracting State in which the real property, the

land or the natural resource is situated.

(2) For the purposes of this Article, shares or comparable interests in a

company, the assets of which consist wholly or principally of real property or of

direct interests in or over land in one of the Contracting States or of rights to

exploit, or to explore for, natural resources in one of the Contracting States,

shall be deemed to be real property situated in the Contracting State in which

the land or the natural resources are situated or in which the exploration may

take place.




(3) Subject to the provisions of paragraphs (1) and (2), income from the

alienation of capital assets of an enterprise of one of the Contracting States shall

be taxable only in that Contracting State, but, where those assets form part of

the business property of a permanent establishment situated in the other

Contracting State, such income may be taxed in that other State.

ARTICLE 14













ARTICLE 15


(1) Subject to the provisions of articles 16, 18 and 19 salaries, wages and












year as the case may be, of that other State; and








other State.





ARTICLE 16

Directors’ Fees




other State.

ARTICLE 17

Entertainers









(3) The provisions of paragraph (2) shall not apply if it is established that

neither the entertainer nor persons related to the entertainer participate directly

or indirectly in the profits of the person referred to in that paragraph.

ARTICLE 18


(1) Pensions (including government pensions) and annuities paid to a


(2) The term annuity means a stated sum payable periodically at stated







(3) Notwithstanding anything in this Agreement—

(a) the pensions and other payments referred to in paragraphs (a) and (b) of

sub--section 23AD (3) of the Australian Income Tax Assessment Act

1936, as amended, where they are paid by Australia, shall be exempt

from Swiss tax as long as they are exempt from Australian tax;

(b) the pensions and other payments received from Switzerland under the

legislation concerning Military Insurance shall be exempt from

Australian tax as long as they are exempt from Swiss tax.

ARTICLE 19

Government Service

(1) Remuneration (other than a pension or annuity) paid by one of the

Contracting States or a political sub--division of that State or a local authority of

that State to any individual in respect of services rendered in the discharge of

governmental functions shall be taxable only in that State. However, such

remuneration shall be taxable only in the other Contracting State if the services

are rendered in that other State and the recipient is a resident of that other State

who—






by one of the Contracting States or a political sub--division of one of the States

or a local authority of one of the States. In such a case the provisions of Articles

15 and 16 shall apply.

ARTICLE 20

Students










ARTICLE 21





Agreement to be a resident solely of one of the Contracting States, derives



Chapter IV


ARTICLE 22




hereof), Swiss tax paid, whether directly or by deduction, in respect of income

derived by a resident of Australia from sources in Switzerland (not including, in

the case of a dividend, tax paid in respect of the profits out of which the

dividend is paid) shall be allowed as a credit against Australian tax payable in


(2) Where a resident of Switzerland derives income dealt with in this

Agreement and which, in accordance with the provisions of this Agreement,

may be taxed in Australia, Switzerland shall, subject to the provisions of

paragraph (3), exempt such income from Swiss tax but may, in calculating tax

on the remaining income of that person, apply the rate of tax which would have

been applicable if the exempted income had not been so exempted. Provided,

however, that the exemption shall apply to gains from the alienation of property

referred to in paragraph (2) of Article 13 only if taxation of such gains by

Australia is demonstrated.

(3) Where a resident of Switzerland derives dividends, interest or royalties

which, in accordance with the provisions of Articles 10, 11 and 12, may be

taxed in Australia, Switzerland shall allow, upon request, relief to that person.

The relief may consist of:

(a) a deduction from the Swiss tax on the income of that person of an

amount equal to the tax levied in Australia in accordance with the

provisions of Articles 10, 11 and 12; such deduction shall not, however,

exceed that part of the Swiss tax, as computed before the deduction is

given, which is attributable to the income which may be taxed in

Australia, or




(b) a lump sum reduction of the Swiss tax determined by standardised

formulae which have regard to the general principles of the relief

referred to in sub--paragraph (a), or

(c) a partial exemption of such dividends, interest or royalties from Swiss

tax, in any case consisting at least of the deduction of the tax levied in

Australia from the gross amount of the dividends, interest or royalties.

Switzerland shall determine the applicable relief and regulate the procedure in

accordance with the Swiss provisions relating to the carrying out of

international conventions of the Swiss Confederation for the avoidance of

double taxation.

(4) A company which is a resident of Switzerland and which derives

dividends from a company which is a resident of Australia shall be entitled, for

the purposes of Swiss tax with respect to such dividends, to the same relief

which would be granted if the company paying the dividends were a resident of

Switzerland.

Chapter V

SPECIAL PROVISIONS

ARTICLE 23



actions of tax authorities in one or both of the Contracting States result or will

result for him in taxation not in accordance with this Agreement, he may,



is a resident.








this Agreement.



Agreement.




ARTICLE 24



information (being information which is at their disposal under their respective

taxation laws in the normal course of administration) as is necessary for

carrying out the provisions of this Agreement in relation to the taxes which are

the subject of this Agreement. Any information so exchanged shall be treated as

secret and shall not be disclosed to any persons other than those concerned with

the assessment and collection of the taxes which are the subject of this

Agreement. No information as aforesaid shall be exchanged which would

disclose any trade, business, industrial or professional secret or trade process.

(2) In no case shall the provisions of this Article be construed as imposing

upon either of the Contracting States the obligation to carry out administrative

measures at variance with the regulations and practice of either Contracting

State or which would be contrary to its sovereignty, security or public policy or

to supply particulars which are not procurable under its own legislation or that

of the State making application.

ARTICLE 25

Source of Income



Contracting State, shall for the purposes of Article 22, and of the income tax


ARTICLE 26


(1) Nothing in this Agreement shall affect the fiscal privileges of


under the provisions of special agreements.

(2) For the purposes of this Agreement, an individual who is a member of a

diplomatic mission, consular post or permanent mission of one of the

Contracting States which is situated in the other Contracting State or in a third

State shall be deemed to be a resident of the sending Contracting State if—

(a) in accordance with international law he is not liable to tax in the

receiving Contracting State in respect of income from sources outside

that Contracting State, and




(b) he is liable in the sending Contracting State to the same obligations in

relation to tax on his total income as are residents of that Contracting

State.

(3) This Agreement shall not apply to international organisations, to organs

or officials thereof or to persons who are members of a diplomatic mission,

consular post or permanent mission of a third State, being present in one of the

Contracting States and not treated in either Contracting State as residents in

respect of taxes on income.

Chapter VI

FINAL PROVISIONS

ARTICLE 27

Entry into Force

This Agreement shall come into force on the date on which the Government

of Australia and the Swiss Federal Council exchange notes through the

diplomatic channel notifying each other that the last of such things has been

done as is necessary to give this Agreement the force of law in Australia and in

Switzerland, as the case may be, and thereupon this Agreement shall have

effect—

(a) in Australia—


non--resident, in respect of income derived on or after 1 January

1979;

(ii) in respect of other Australian tax for any year of income


(b) in Switzerland—

for any taxable year beginning on or after 1 January 1979.

ARTICLE 28

Termination


Australia or the Swiss Federal Council may on or before 30 June in any

calendar year give to the other through the diplomatic channel written notice of

termination and, in that event this Agreement shall cease to be effective—

(a) in Australia—


non--resident, in respect of income derived on or after 1 January









(b) in Switzerland—

for any taxable year beginning on or after 1 January in the calendar year




DONE in duplicate at Canberra this 28th day of February One thousand nine

hundred and eighty in the English and German languages, both texts being

equally authoritative.

JOHN HOWARD HENRI ROSSI


AUSTRALIA

FOR THE SWISS FEDERAL

COUNCIL

PROTOCOL

The Government of Australia and

the Swiss Federal Council

Have agreed at the signing of the Agreement between the two States for the

avoidance of double taxation with respect to taxes on income upon the

following provisions which shall form an integral part of the said Agreement.


the provisions of the Australian law relating specifically to the income

tax upon the reduced taxable income of a non--resident company in

existence at the date of signature of this Agreement are to be applied in

ascertaining the income subject to that tax or, if those provisions are

amended so as to make more favourable to the company the

ascertainment of that income, those provisions as so amended are to be

so applied.


(a) insofar as it has been customary in one of the Contracting States to

determine the profits to be attributed to a permanent establishment on

the basis of an apportionment of the total profits of the enterprise to its

various parts, nothing in paragraph (2) of Article 7 shall preclude that

Contracting State from determining the profits to be taxed by such an




apportionment as may be customary; the method of apportionment

adopted shall, however, be such that the result shall be in accordance

with the principles contained in that Article;

(b) for the purposes of (a) and of paragraphs (1) to (4) of Article 7, the

profits to be attributed to the permanent establishment shall be

determined by the same method year by year unless there is good and

sufficient reason to the contrary;

(c) Article 7 of the Agreement shall not apply to profits of an enterprise

from carrying on a business of any form of insurance, other than life

insurance.


where the information available to the competent authority of one of the

Contracting States is inadequate to determine the profits of an enterprise

on which tax may be imposed in that State in accordance with Article 7

or Article 9 of the Agreement, nothing in those Articles shall affect the

application of any law of that State relating to the determination of the

tax liability of an enterprise in special circumstances, provided that that

law shall be applied, so far as the information available to the

competent authority permits, in accordance with the principles of those

Articles.

(4) With reference to Articles 10, 11 and 12, if, in an Agreement for the

avoidance of double taxation that is subsequently made between

Australia and a third State being a State that at the date of signature of

this Protocol is a member of the Organisation for Economic

Co--operation and Development, Australia shall agree to limit the rate

of its taxation—

(a) on dividends paid by a company which is a resident of Australia for the

purposes of Australian tax to which a company that is a resident of the

third State is entitled, to a rate less than that provided in paragraph (2)

of Article 10; or

(b) on interest arising in Australia to which a resident of the third State is

entitled, to a rate less than that provided in paragraph (2) of Article 11;

or

(c) on royalties arising in Australia to which a resident of the third State is

entitled, to a rate less than that provided in paragraph (2) of Article 12,

the Government of Australia shall immediately inform the Swiss

Federal Council in writing through the diplomatic channel and shall

enter into negotiations with the Swiss Federal Council to review the




provisions specified in (a), (b) and (c) above in order to provide the

same treatment for Switzerland as that provided for the third State.

DONE in duplicate at Canberra this twenty--eighth day of February, One

thousand nine hundred and eighty, in the English and German languages, both

texts being equally authoritative.

JOHN HOWARD HENRI ROSSI

FOR THE GOVERNMENT OF FOR THE SWISS FEDERAL

AUSTRALIA COUNCIL

Agreement between the Government of Australia and the Government of Malaysia for


Taxes on Income Schedule 16




Government of Malaysia for the




The Government of Australia and the Government of Malaysia,




ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered

1. The existing taxes to which this Agreement shall apply are—

(a) in Australia:



(b) in Malaysia:

income tax and excess profit tax; supplementary income taxes, that is,

tin profits tax, development tax and timber profits tax; and petroleum

income tax.

2. This Agreement shall also apply to any identical or substantially similar


of this Agreement in addition to, or in place of, the existing taxes. The

competent authority of each Contracting State shall notify the competent


Malaysia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income


authority of the other Contracting State of any significant changes which have

been made in the laws of its Contracting State relating to the taxes to which this

Agreement applies.

ARTICLE 3

General Definitions

1. In this Agreement, unless the context otherwise requires—

(a) the term “Australia” means the Commonwealth of Australia and

includes—









of a State or part of Australia, or of a Territory aforesaid dealing



(b) the term “Malaysia” means the Federation of Malaysia and includes any

area adjacent to the territorial waters of Malaysia which, in accordance

with international law, has been or may hereafter be designated under

the laws of Malaysia concerning the continental shelf as an area within

the rights of Malaysia with respect to the sea--bed and subsoil and their

natural resources may be exercised;


Contracting State” mean Australia or Malaysia, as the context requires;

(d) the term “person” includes an individual, a company and such

unincorporated bodies of persons as are treated as persons under the

taxation laws of the respective Contracting States;


treated as a company for tax purposes;


of the other Contracting State” mean respectively an enterprise carried

on by a resident of one of the Contracting States and an enterprise






(g) the term “tax” means Australian tax or Malaysian tax, as the context

requires;



(i) the term “Malaysian tax” means tax imposed by Malaysia, being tax to




case of Malaysia, the Minister of Finance or his authorized

representative.

2. In this Agreement, the terms “Australian tax” and “Malaysian tax” do not

include any penalty or interest imposed under the taxation laws of either

Contracting State.

3. In the application of this Agreement by a Contracting State, any term not

otherwise defined shall, unless the context otherwise requires, have the meaning

which it has under the taxation laws of that Contracting State.

ARTICLE 4

Residence

1. For the purposes of this Agreement, a person is a resident of one of the


(a) in the case of Australia, if the person is a resident of Australia for the

purposes of Australian tax; and

(b) in the case of Malaysia, if the person is resident in Malaysia for the

purposes of Malaysian tax.

2. Where by reason of the preceding provisions an individual is a resident of

both Contracting States, then his status shall be determined in accordance with

the following rules:















3. In determining for the purposes of paragraph 2 the Contracting State with

which an individual’s personal and economic relations are the closer, the

matters to which regard may be had shall include the citizenship of the

individual.

4. Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, then it shall be deemed to be

a resident solely of the Contracting State in which its place of effective


ARTICLE 5


1. For the purposes of this Agreement, the term “permanent establishment”



2. The term “permanent establishment” shall include especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, oil or gas well, quarry or any other place of extraction of natural

resources including timber or other forest produce;


















enterprise;




4. An enterprise of one of the Contracting States shall be deemed to have a

permanent establishment in the other Contracting State and to carry on business

through that permanent establishment if—

(a) it carries on supervisory activities in that other State for more than six


or assembly project which is being undertaken in that other State; or

(b) substantial equipment is in that other State being used or installed by,

for or under contract with, the enterprise.

5. A person acting in one of the Contracting States on behalf of an enterprise

of the other Contracting State (other than an agent of an independent status to

whom paragraph 6 applies) shall be deemed to be a permanent establishment of

that enterprise in the first--mentioned State if—

(a) he has, and habitually exercises in that first--mentioned State, an

authority to conclude contracts on behalf of the enterprise, unless his

activities are limited to the purchase of goods or merchandise for the

enterprise; or

(b) there is maintained in that first--mentioned State a stock of goods or

merchandise belonging to the enterprise from which he habitually fills

orders on behalf of the enterprise; or

(c) in so acting, he manufactures or processes in that first--mentioned State

for the enterprise goods or merchandise belonging to the enterprise.

6. An enterprise of one of the Contracting States shall not be deemed to have

a permanent establishment in the other Contracting State merely because it




7. The fact that a company which is a resident of one of the Contracting









ARTICLE 6

Income from Land

1. Income from land may be taxed in the Contracting State in which the land

is situated.

2. In this Article, the word “land” shall have the meaning which it has under

the law of the Contracting State in which the land in question is situated; it shall

include any estate or direct interest in land whether improved or not. A right to

receive variable or fixed payments as consideration for the working of, or the

right to work, mineral deposits, oil or gas wells, quarries or other places of

extraction or exploitation of natural resources or for the exploitation of, or the

right to exploit or to fell any standing trees, plants or forest produce shall be

deemed to be an estate or direct interest in land situated in the Contracting State

in which the mineral deposits, oil or gas wells, quarries, natural resources, or

standing trees, plants or forest produce are situated.


direct use, letting or use in any other form of land.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from

land of an enterprise and to income from land used for the performance of

professional services.

ARTICLE 7

Business Income or Profits

1. The income or profits of an enterprise of one of the Contracting States shall

be taxable only in that State unless the enterprise carries on business in the other


enterprise carries on business as aforesaid, the income or profits of the

enterprise may be taxed in the other State, but only so much of them as is


2. Subject to the provisions of paragraph 3, where an enterprise of one of the

Contracting States carries on business in the other Contracting State through a


be attributed to that permanent establishment the income or profits which it

might be expected to make if it were a distinct and separate enterprise engaged

in the same or similar activities under the same or similar conditions and

dealing at arm’s length with the enterprise of which it is a permanent






3. In the determination of the income or profits of a permanent establishment,

there shall be allowed as deductions expenses of the enterprise, being expenses

(including executive and general administrative expenses) which are reasonably

connected with the permanent establishment and which would be deductable if

the permanent establishment were an independent entity that incurred those

expenses, whether incurred in the Contracting State in which the permanent


4. No income or profits shall be attributed to a permanent establishment by

reason of the mere purchase by that permanent establishment of goods or

merchandise for the enterprise.


State is inadequate to determine the income or profits to be attributed to the

permanent establishment of an enterprise, nothing in this Article shall effect the

application of any law of that State relating to the determination of the tax

liability of a person by the exercise of a discretion or the making of an estimate

by the competent authority, provided that that law shall be applied, so far as the

information available to the competent authority permits, in accordance with the

principles of this Article.

6. Where income or profits include any item of income or profits which is

dealt with separately in another Article of this Agreement, the provisions of that

other Article, (except where otherwise provided in that Article) shall not be

affected by the provisions of this Article.

7. Nothing in this Article shall affect the operation of any taxation law:

(a) in the case of Australia,

relating to insurance with non--residents; and

(b) in the case of Malaysia,

relating to income or profits from an insurance business:

provided that if the relevant law in force in either Contracting State at the date

of signature of this Agreement is varied (otherwise than in minor respects so as

not to affect its general character), the Contracting States shall consult with each

other with a view to agreeing to any amendment of this paragraph that may be

appropriate.





ARTICLE 8


1. Income or profits from the operation of ships or aircraft derived by a


2. Notwithstanding the provisions of paragraph 1, such income or profits may

be taxed in the other Contracting State where they are income or profits from


3. The provisions of paragraphs 1 and 2 shall apply in relation to the share of

the income or profits from the operation of ships or aircraft derived by a

resident of one of the Contracting States through participation in a pool service,

in a joint transport operating organization or in an international operating

agency.

4. For the purposes of this Article, income or profits derived from the carriage

by ships or aircraft of passengers, livestock, mail, goods or merchandise

shipped in a Contracting State for discharge at another place in that State shall

be treated as income or profits from operations of ships or aircraft confined

solely to places in that State.

5. Nothing in this Article shall affect the application of the law of a

Contracting State relating to the determination of tax liability by the exercise of

a discretion or the making of an estimate by the competent authority in

determining the tax liability of a resident of the other Contracting State in

respect of operations of ships or aircraft confined solely to places in the


ARTICLE 9


1. Where—









expected to operate between independent enterprises dealing at arm’s length,

then any income or profits which, but for those conditions, might have been





expected to accrue to one of the enterprises, but, by reason of those conditions,

have not so accrued, may be included in the income or profits of that enterprise

and taxed accordingly.


State is inadequate to determine the income or profits to be attributed to an

enterprise, nothing in this Article shall affect the application of any law of that

State relating to the determination of the tax liability of a person by the exercise

of a discretion or the making of an estimate by the competent authority,



ARTICLE 10

Dividends

1. Dividends paid by a company which is a resident of one of the Contracting

States, being dividends to which a resident of the other Contracting State is

beneficially entitled, may be taxed in that other State.

2. Dividends paid by a company which is a resident of Australia for the

purposes of Australian tax, being dividends to which a resident of Malaysia is

beneficially entitled, may be taxed in Australia according to the law of

Australia, but the tax so charged shall not exceed 15 per cent of the gross

amount of the dividends.

3. Subject to paragraph 4, dividends paid by a company which is resident in

Malaysia for the purposes of Malaysian tax, being dividends to which a resident

of Australia is beneficially entitled, shall be exempt from any tax in Malaysia

which is chargeable on dividends in addition to the tax chargeable in respect of

the income or profits of the company:

Provided that nothing in this paragraph shall affect the provisions of the

Malaysian law under which the tax in respect of a dividend paid by a company

resident in Malaysia from which Malaysian tax has been, or has been deemed to

be, deducted may be adjusted by reference to the rate of tax appropriate to the

Malaysian year of assessment immediately following that in which the dividend

was paid.

4. If after the date of signature of this Agreement the existing system of

taxation in Malaysia applicable to the income and distributions of companies is

altered by the introduction of a tax on the income or profits of a company (for

which no credit or only partial credit is given to its shareholders) and of a

further tax on dividends pay by the company, the Malaysian tax on dividends,

being dividends paid by a company which is resident in Malaysia for the





purposes of Malaysian tax, and to which a resident of Australia is beneficially

entitled, shall not exceed 15 per cent of the gross amount of the dividends.

5. Dividends paid by a company which is a resident of one of the Contracting

States, being dividends to which a person who is not a resident of the other

Contracting State is beneficially entitled, shall be exempt from tax in that other

State:

Provided that this paragraph shall not apply in relation to dividends paid by

a company which is both a resident of Australia for the purposes of Australian

tax and resident in Malaysia for the purposes of Malaysian tax.

6. The provisions of paragraphs 1 to 5 shall not apply if the person


States, has in the other Contracting State, in which the company paying the

dividends is resident, a permanent establishment which the holding by virtue of

which the dividends are paid is effectively connected. In such a case, the


7. Dividends paid by a company which is a resident of Malaysia shall include

dividends paid by a company which is a resident of Singapore which for the

purpose of those dividends has declared itself to be a resident of Malaysia, but

shall not include dividends paid by a company which is a resident of Malaysia

which for the purpose of those dividends has declared itself to be a resident of

Singapore.

8. The term “dividends” in this Article includes any item which, under the

laws of the Contracting State of which the company paying the dividend is a

resident, is treated as a dividend of a company.

9. Nothing in this Agreement shall be construed as preventing a Contracting


other Contracting State, tax in addition to the tax which would be chargeable on

the chargeable income or taxable income, as the case may be, of a company

which is a resident of the first--mentioned State:

Provided that any additional tax so imposed by the first--mentioned State

shall not exceed 15 per cent of the amount by which the chargeable income or

taxable income for the year of assessment or year of income exceeds the tax

which would have been payable on that income if the company had been a

resident of the first--mentioned State.





ARTICLE 11

Interest

1. Interest arising in one of the Contracting States, being interest to which a


that other State.

2. Such interest may be taxed in the Contracting State in which it arises, and



3. Notwithstanding the provisions of paragraph 2, interest to which a resident

of Australia is beneficially entitled shall be exempt from Malaysian tax if the

loan or other indebtedness in respect of which the interest is paid is an approved

loan or a long--term loan as defined in section 2 (1) of the Income Tax Act,

1967 of Malaysia (as amended).

4. The provisions of paragraphs 1, 2 and 3 shall not apply if the person


States, has in the other Contracting State in which the interest arises a

permanent establishment with which the debt--claim in respect of which the

interest is paid is effectively connected. In such a case the provisions of Article

7 shall apply.

5. Interest shall be deemed to arise in a Contracting State when the payer is

that Contracting State itself or a political sub--division, a local authority or

statutory body thereof or a resident of that State for the purposes of its tax.


of the Contracting States or not, has in a Contracting State a permanent

establishment in connection with which the indebtedness on which the interest

is paid was incurred, and such interest is borne by such permanent

establishment, then such interest shall be deemed to arise in the Contracting

State in which the permanent establishment is situated.

6. Where the payer is related to the person beneficially entitled to the interest

and the amount of the interest paid, having regard to the debt--claim for which it

is paid, exceeds the amount which might be expected to have been agreed upon

by the payer and the person so entitled if they had not been related, the

provisions of this Article shall apply only to the last--mentioned amount. In that

case, the excess part of the payments shall remain taxable according to the law

of each Contracting State, due regard being had to the other provisions of this

Agreement. For the purposes of this paragraph, a person is related to another

person if either person participates directly or indirectly in the management,





control or capital of the other, or if any third person or persons participate

directly or indirectly in the management, control or capital of both.

7. The term “interest” in this Article means interest from Government

securities, or from bonds or debentures, whether or not secured by mortgage

and whether or not carrying a right to participate in profits, and from

debt--claims of every kind as well as other income assimilated to interest from

money lent by the taxation law of the Contracting State in which the income

arises.

ARTICLE 12

Royalties

1. Royalties arising in one of the Contracting States, being royalties to which


that other State.

2. Such royalties may be taxed in the Contracting State in which they arise,

and according to the laws of that State but the tax so charged shall not exceed

15 per cent of the gross amount of the royalties.

3. Notwithstanding the provisions of paragraph 2, approved industrial

royalties derived from Malaysia by a resident of Australia who is the beneficial

owner thereof shall be exempt from Malaysian tax.

4. The provisions of paragraphs 1, 2 and 3 shall not apply if the person


States, has in the other Contracting State from which the royalties are derived a

permanent establishment with which the right, property, knowledge,

information or assistance giving rise to the royalties is effectively connected. In

such a case the provisions of Article 7 shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is

that Contracting State itself or a political sub--division, a local authority or

statutory body thereof or a resident of that State for the purposes of its tax.

Where, however, the person paying the royalties, whether he is a resident of one

of the Contracting States or not, has in a Contracting State a permanent


incurred, and such royalties are borne by such permanent establishment, then

such royalties shall be deemed to arise in the Contracting State in which the


6. Where the payer is related to the person beneficially entitled to the

royalties and the amount of the royalties paid or credited, having regard to the

use, to the right to use, or to the knowledge, information or assistance, for





which they are paid or credited, exceeds the amount which might be expected to

have been agreed upon by the payer and the person so entitled if they had not

been related, the provisions of this Article shall apply only to the

last--mentioned amount. In that case, the excess part of the royalties paid or

credited shall remain taxable according to the law of each Contracting State,

due regard being had to the other provisions of this Agreement. For the

purposes of this paragraph, a person is related to another person if either person

participates directly or indirectly in the management, control or capital of the

other, or if any third person or persons participate directly or indirectly in the

management, control or capital of both.

7. The term “royalties” in this Article means payments or credits of any kind

to the extent to which they are made as consideration for—



process, trade mark or other like property or right;

(ii) industrial, commercial or scientific equipment; or

(iii) motion picture film or tape for radio or television broadcasting;

(b) the supply of scientific, technical, industrial or commercial knowledge

or information;

(c) the supply of any assistance that is ancillary and subsidiary to, and is


such right or property as is described in paragraph (a) (i), any such

equipment as is described in paragraph (a) (ii), or any such knowledge

or information as is described in paragraph (b); or

(d) total or partial forbearance in respect of the use of a property or right


8. The term “approved industrial royalties” in this Article means royalties as

defined in paragraph 7 which are approved and certified by the competent

authority of Malaysia as payable for the purpose of promoting industrial

development in Malaysia and which are payable by an enterprise which is

wholly or mainly engaged in activities falling within one of the following

classes—

(a) manufacturing, assembling or processing;

(b) construction, civil engineering or ship--building; or

(c) electricity, hydraulic power, gas or water supply.





9. Royalties derived by a resident of Australia, being royalties that, as film

rentals, are subject to the cinematograph film--hire duty in Malaysia, shall not

be liable to Malaysian tax.

ARTICLE 13

Alienation of Land

Income or profits from the alienation of land as defined in Article 6 may be

taxed in the Contracting State in which that land is situated.

ARTICLE 14

Personal Services

1. Subject to Articles 15, 18, 19 and 20, remuneration (other than a pension)

derived by an individual who is a resident of one of the Contracting States in

respect of personal (including professional) services may be taxed only in that

Contracting State unless the services are performed in the other Contracting

State. If the services are so performed, such remuneration as is derived in

respect thereof may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration (other than a

pension) derived by an individual who is a resident of one of the Contracting

States in respect of personal (including professional) services performed in the

other Contracting State shall be taxable only in the first--mentioned State if—


exceeding in the aggregate 183 days in the basis year or year of income,

as the case may be, of that other State;

(b) the remuneration is paid by, or on behalf of, a person who is not a



permanent establishment which that person has in that other State.

3. Notwithstanding the preceding provisions of this Article, remuneration in








ARTICLE 15

Directors’ fees

Notwithstanding the provisions of Article 14, directors’ fees and similar

payments derived by a resident of one of the Contracting States in his capacity

as a member of the board of directors of a company which is a resident of the

other Contracting State may be taxed in that other State.

ARTICLE 16

Entertainers

1. Notwithstanding the provisions of Article 14, income derived by

entertainers (such as theatrical, motion picture, radio or television artistes and

musicians and athletes) from their personal activities as such may be taxed in

the Contracting State in which these activities are exercised.

2. Where income in respect of the personal activities of an entertainer as such


notwithstanding the provisions of Articles 7 and 14, be taxed in the Contracting

State in which the activities of the entertainer are exercised.

3. The provisions of paragraphs 1 and 2 shall not apply to remuneration or

profits derived from activities exercised in a Contracting State that are directly

connected with a visit to that Contracting State that is arranged by and is

directly or indirectly supported wholly or substantially from the public funds of

the other Contracting State or a political sub--division, a local authority or

statutory body thereof.

ARTICLE 17


1. Any pension (other than a pension of the kind referred to in Article 18) or

other similar payment or any annuity paid to a resident of one of the

Contracting States shall be taxable only in that Contracting State.


times, during life or during a specified or ascertainable period of time, under an



3. Any alimony or other maintenance payment arising in a Contracting State

and paid to a resident of the other Contracting State, shall be taxable only in the






ARTICLE 18

Government Service

1. Remuneration (other than a pension or annuity) paid by a Contracting State

or a political sub--division or a local authority thereof to any individual in

respect of services rendered in the discharge of governmental functions shall be

taxable only in that State. However, such remuneration shall be taxable only in

the other Contracting State if the services are rendered in that other State and

the recipient is a resident of that other State who:




2. Any pension paid by, or out of funds created by, a Contracting State or a

political sub--division or a local authority thereof to any individual in respect of

services rendered to that State or sub--division or local authority thereof shall be

taxable in that State.

3. The provisions of paragraphs 1 and 2 shall not apply to remuneration or

pensions in respect of services rendered in connection with any trade or

business carried on by one of the Contracting States or a political sub--division

or a local authority thereof. In such a case, the provisions of Articles 14, 15 and

17 shall apply.

ARTICLE 19


1. An individual who, at the invitation of a university, college, school or other

similar recognised educational institution in a Contracting State, visits that

Contracting State for a period not exceeding two years solely for the purpose of

teaching or conducting research or both at such educational institution and who

is, or was immediately before that visit, a resident of the other Contracting State

shall be exempt from tax in the first--mentioned Contracting State on any

remuneration for such teaching or research in respect of which he is, or upon the

application of this Article will be, subject to tax in the other Contracting State.

2. This Article shall not apply to remuneration which a professor or teacher

receives for conducting research if the research is undertaken primarily for the

private benefit of a specific person or persons.





ARTICLE 20

Students




his education or training, receives payments from sources outside the other

State for the purpose of his maintenance, education or training, those payments

shall be exempt from tax in the other State.

ARTICLE 21


Where a person, who by reason of the provisions of paragraph 1 of Article


paragraph 2 or 4 of that Article is deemed for the purposes of this Agreement to

be a resident solely of one of the Contracting States, derives income from

sources in that Contracting State or from sources outside both Contracting

States, that income shall be taxable only in that Contracting State.

ARTICLE 22

Sources of Income


any one or more of Articles 6 to 8, 10 to 16 and 18 may be taxed in the other

Contracting State, shall for the purpose of Article 23, and of the income tax law

of that other State, be deemed to be income from sources in that other State.

ARTICLE 23

Methods of Elimination of Double Taxation

1. The laws in force in each of the Contracting States shall continue to govern

the taxation of income in that Contracting State except where provision to the

contrary is made in this Agreement. Where income is subject to tax in both

Contracting States, relief from double taxation shall be given in accordance

with the following paragraphs.

2. In the case of Malaysia, subject to the provisions of the law of Malaysia

regarding the allowance as a credit against Malaysian tax of tax payable in any

country other than Malaysia, the amount of Australian tax payable under the

law of Australia and in accordance with the provisions of this Agreement, by a

resident of Malaysia in respect of income from sources within Australia shall be

allowed as a credit against Malaysian tax payable in respect of such income, but





in an amount not exceeding the proportion of Malaysian tax which such income

bears to the entire income chargeable to Malaysian tax.

3. (a) Subject to the provisions of the law of Australia from time to time in



general principle hereof), Malaysian tax paid, whether directly or by

deduction, in respect of income derived by a person who is a resident of

Australia from sources in Malaysia shall be allowed as a credit against

Australian tax payable on the income on which the Malaysian tax was

paid. However, where the income consists of a dividend paid by a

company which is a resident of Malaysia, the credit shall, subject to

sub--paragraph (b), only take into account such tax in respect thereof as

is additional to any tax payable by the company on the profits out of

which the dividend is paid and is ultimately borne by the recipient

without reference to any tax so payable.

(b) A company which is a resident of Australia is, in accordance with the

provisions of the taxation law of Australia in force at the date of

signature of this Agreement, entitled to a rebate in its assessment at the

average rate of tax payable by the company in respect of dividends that

are included in its taxable income and are received from a company

which is a resident of Malaysia. However, should the law so in force be

amended so that the rebate in relation to the dividends ceases to be

allowable under that law, credit shall be allowed under

sub--paragraph (a) to the first--mentioned company for the Malaysian

tax paid on the profits out of which the dividends are paid, as well as for

the Malaysian tax paid on the dividends for which credit is to be

allowed under sub--paragraph (a), but only if that company beneficially

owns at least 10 per cent of the paid--up share capital of the

second--mentioned company.

4. Where the income or profits on which an enterprise of one of the

Contracting States has been charged to tax in that Contracting State are also

included in the income or profits of an enterprise of the other Contracting State

as being income or profits which, because of the conditions operative between

the two enterprises, might have been expected to accrue to the enterprise of that

other Contracting State if the enterprises had been independent enterprises

dealing at arm’s length, the income or profits so included shall be treated for the

purposes of this Article as income or profits of the enterprise of the

first--mentioned Contracting State from a source in the other Contracting State

and credit shall be given in accordance with this Article in respect of the extra





tax chargeable in that other Contracting State as a result of the inclusion of such

income or profits.

5. For the purposes of paragraph 6, the term “Malaysian tax forgone”

means—

(a) an amount which, under the laws of Malaysia and in accordance with

this Agreement, would have been payable as Malaysian tax on income

had that income not been exempted either wholly or partly from

Malaysian tax in accordance with—

(i) Schedule 7A of the Income Tax Act 1967 of Malaysia or

sections 21, 22, 26 or 30Q of the Investment Incentives Act

1968 of Malaysia, so far as they were in force on, and have not

been modified since, the date of signature of this Agreement or

have been modified only in minor respects so as not to affect

their general character; or

(ii) any other provisions which may subsequently be agreed in an

Exchange of Letters between the Governments of the

Contracting States to be of a substantially similar character;

(b) in the case of interest derived by a resident of Australia which is exempt

from Malaysian tax in accordance with paragraph 3 of Article 11, the

amount which, under the law of Malaysia and in accordance with this

Agreement, would have been payable as Malaysian tax if the interest

were interest to which paragraph 3 of Article 11 did not apply, and if

the tax referred to in paragraph 2 of Article 11 were not to exceed 10

per cent of the gross amount of the interest; and

(c) in the case of royalties derived by a resident of Australia, being

approved industrial royalties which are exempt from Malaysian tax in

accordance with paragraph 3 of Article 12, the amount which, under the

law of Malaysia and in accordance with this Agreement, would have

been payable as Malaysian tax if the royalties were royalties to which

paragraph 3 of Article 12 did not apply and if the tax referred to in

paragraph 2 of Article 12 were not to exceed 10 per cent of the gross


6. (a) For the purposes of sub--paragraph (a) or (b) of paragraph 3, Malaysian

tax forgone which answers the description in sub--paragraph (a) of

paragraph 5 shall be deemed to be Malaysian tax paid.

(b) For the purposes of sub--paragraph (a) of paragraph 3, Malaysian tax

forgone which answers the description in sub--paragraph (b) or (c) of






(c) For the purposes of the income tax law of Australia—

(i) In the event that the rebate in relation to dividends, referred to

in sub--paragraph (b) of paragraph 3, ceases to be allowable in

Australia, the amount of the income referred to in

sub--paragraph (a) of paragraph 5 shall be deemed to be

increased by the amount that is deemed in accordance with

sub--paragraph (a) of this paragraph to be Malaysian tax paid;

and

(ii) the amount of interest or royalties referred to in

sub--paragraphs (b) and (c) of paragraph 5 shall be deemed to

be increased by the amount that is deemed in accordance with

sub--paragraph (b) of this paragraph to be Malaysian tax paid.

7. (a) Paragraphs 5 and 6 shall not apply in relation to income derived in any

year of income after the year of income that ends on 30 June 1984 or

any later date that may be agreed by the Governments of the

Contracting States, after the consultations referred to in

sub--paragraph (b), in Letters exchanged for this purpose.

(b) The Governments of the Contracting States shall consult each other in

order to determine whether the period of application of paragraphs 5

and 6 shall be extended. For this purpose notice of intention to consult

may be given not less than six months before the expiration of that

period.

8. If in an Agreement for the avoidance of double taxation that is

subsequently made between Australia and a third State Australia should agree—

(a) in relation to dividends that are derived by a company which is a

resident of Australia from a company which is a resident of the third

State, to give credit for tax paid on the profits out of which the

dividends are paid on the basis of a test of beneficial ownership by the

first--mentioned company of less than 10 per cent of the paid--up share

capital of the second--mentioned company; or

(b) to give relief from Australian tax of the kind that is provided for in

relation to Malaysia in paragraphs 5 and 6, on a basis that, other than in

minor respects, is more favourable in relation to the third State than that

so provided for,

the Government of Australia shall immediately inform the Government of

Malaysia and shall enter into negotiations with the Government of Malaysia

with a view to providing treatment in relation to Malaysia comparable with that

provided in relation to that third State.





9. Where royalties derived by a resident of Australia are, as film rentals,

subject to the cinematograph film--hire duty in Malaysia, that duty shall, for the

purposes of sub--paragraph (a) of paragraph 3, be deemed to be Malaysian tax.

ARTICLE 24


1. Where a resident of one of the Contracting States considers that the actions

of the competent authority of one or both of the Contracting States result or will


notwithstanding the remedies provided by the taxation laws of those States,


is a resident. The case must be presented within two years from the first

notification of the action.

2. The competent authority shall endeavour, if the taxpayer’s claim appears to

it to be justified and if it is not itself able to arrive at an appropriate solution, to



with this Agreement. If the claim is made within six years of the end of the year

of assessment or year of tax, as the case may be, the solution so reached shall be

implemented notwithstanding any time limits in the taxation laws of the

Contracting States.

3. The competent authorities of the Contracting States shall jointly endeavour

to resolve by mutual agreement any difficulties or doubts arising as to the

interpretation or application of this Agreement.

4. The competent authorities of the Contracting States may communicate with


Agreement.

ARTICLE 25



information as is necessary for the carrying out of this Agreement or for the

prevention of fraud or for the administration of statutory provisions against

legal avoidance in relation to the taxes to which this Agreement applies. Any

information so exchanged shall be treated as secret and shall be disclosed only

to persons or authorities (including courts and administrative bodies) concerned

with the assessment, collection, enforcement or prosecution in respect of, or the





determination of appeals in relation to, those taxes to which this Agreement

applies.

2. In no case shall the provisions of paragraph 1 be construed so as to impose

on a Contracting State the obligation—

(a) to carry out any administrative measures at variance with the laws or

the administrative practice of that or of the other Contracting State;



State;



information the disclosure of which would be contrary to public policy.

ARTICLE 26





ARTICLE 27

Limitation of Relief

Where this Agreement provides (with or without other conditions) that

income from sources in a Contracting State shall be relieved wholly or partly

from tax in that State, and under the laws in force in the other Contracting State

the said income is subject to tax by reference to the amount thereof which is

remitted to or received in that other State and not by reference to the full

amount thereof, then the relief to be allowed under this Agreement in the

first--mentioned State shall apply only to so much of the income as is remitted

to or received in that other State;

Provided that where—

(a) in accordance with the foregoing provisions of this Article, relief has

not been allowed in the first instance in the first--mentioned State in

respect of an amount of income; and

(b) that amount of income has subsequently been remitted to or received in

the other State and is thereby subject to tax in that other State,

the competent authority of the first--mentioned State shall, subject to any laws

thereof for the time being in force limiting the time and setting out the method





for the making of a refund of tax, allow relief in respect of that amount of

income in accordance with the appropriate provisions of this Agreement.

ARTICLE 28

Entry into Force

This Agreement shall come into force on the date on which the

Government of Australia and the Government of Malaysia exchange notes

through the diplomatic channel notifying each other that the last of such things

has been done as is necessary to give this Agreement the force of law in

Australia and in Malaysia, as the case may be, and thereupon this Agreement

shall have effect—

(a) in Australia—



1979;



(b) in Malaysia—

in respect of Malaysian tax, for the year of assessment beginning on

1January 1980, and subsequent years of assessment.

ARTICLE 29

Termination

This Agreement shall continue in effect indefinitely, but the Government

of Australia or the Government of Malaysia may on or before 30 June in any

calendar year after the year 1982 give to the other Government through the

diplomatic channel written notice of termination and, in that event this

Agreement shall cease to be effective—

(a) in Australia—












(b) in Malaysia—

in respect of Malaysian tax, for the year of assessment beginning on

1 January in the second calendar year next following that in which the

notice of termination is given, and subsequent years of assessment.



DONE in duplicate in the English and the Bahasa Malaysia language, both

texts being equally authentic, at Canberra this twentieth day of August One

thousand nine hundred and eighty.

JOHN HOWARD AWANG BIN HASSAN


OF AUSTRALIA OF MALAYSIA

Malaysian protocol Schedule 16A


Schedule 16A—Malaysian protocol Note: See section 3

PROTOCOL AMENDING THE AGREEMENT BETWEEN THE

GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF

MALAYSIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND


TAXES ON INCOME


MALAYSIA,

DESIRING to amend the Agreement between the Government of Australia and

the Government of Malaysia for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income signed at Canberra

on 20 August 1980 (in this Protocol referred to as “the Agreement”),


Article 1


(a) deleting subparagraphs (a) and (b) of paragraph 1 and substituting the

following:

“(a) the term “Australia”, when used in a geographical sense,








Schedule 16A Malaysian protocol



(including the Territories specified in this subparagraph) in

respect of which there is for the time being in force, consistently

with international law, a law of Australia dealing with the

exploitation of any of the natural resources of the seabed and


(b) the term “Malaysia” means the territories of the Federation of

Malaysia, the territorial waters of Malaysia and the sea--bed and

subsoil of the territorial waters, and includes any area extending

beyond the limits of the territorial waters of Malaysia, and the

sea--bed and subsoil of any such area, which has been or may

hereafter be designated under the laws of Malaysia and in

accordance with international law as an area over which

Malaysia has sovereign rights for the purposes of exploring and

exploiting the natural resources, whether living or non--living;”;

and

(b) deleting the full stop at the end of paragraph 3 and adding “from time to

time in force.”.

Article 2


(a) deleting “or” immediately following subparagraph (a) of paragraph 4;

(b) deleting the full stop at the end of subparagraph (b) of paragraph 4 and

substituting “; or”; and

(c) adding after subparagraph (b) of paragraph 4 the following subparagraph:

“(c) it furnishes services, including consultancy services, in that other

State through employees or other personnel engaged by the

enterprise for such purpose, but only where those activities

continue (for the same or a connected project) within the other

State for a period or periods aggregating more than three months

within any twelve--month period.”.



Article 3

Article 6 of the Agreement is amended by deleting paragraph 2 and substituting

the following:

“2. In this Article, the word “land” shall have the meaning which it

has under the law of the Contracting State in which the land in question

is situated; it shall include any estate or direct interest in land whether

improved or not. A right to receive variable or fixed payments either as

consideration for the exploitation of or the right to explore for or exploit,

or in respect of the exploitation of, mineral deposits, oil or gas wells,

quarries or other places of extraction or exploitation of natural resources

or for the exploitation of, or the right to exploit or to fell any standing

trees, plants or forest produce shall be deemed to be an estate or direct

interest in land situated in the Contracting State in which the mineral

deposits, oil or gas wells, quarries, natural resources, or standing trees,

plants or forest produce, as the case may be, are situated or where the

exploration may take place.”.

Article 4

Article 7 of the Agreement is amended by adding after paragraph 7 the

following paragraph:

“8. Where:

(a) a resident of one of the Contracting States is beneficially

entitled, whether directly or indirectly through one or more

trusts, to a share of the business profits of an enterprise

carried on in the other Contracting State by the trustee of a

trust estate other than a trust estate which is treated as a


(b) in relation to that enterprise, that trustee has, in accordance

with the principles of Article 5, a permanent establishment

in that other State,


carried on in that other State by that resident through a permanent

establishment situated therein and the resident’s share of business profits

shall be attributed to that permanent establishment.”.



Article 5


(a) deleting the words “or a long--term loan” in paragraph 3; and

(b) adding after paragraph 7 the following paragraph:

“8. Notwithstanding the provisions of paragraph 2, interest derived

from the investment of official reserve assets by the Government of a

Contracting State or by a bank performing central banking functions in a

Contracting State shall be exempt from tax in the other Contracting

State.”.

Article 6

Article 13 of the Agreement is deleted and substituted with the following:

“Article 13


1. Income, profits or gains derived by a resident of one of the

Contracting States from the alienation of land as defined in Article 6 and,

as provided in that Article, situated in the other Contracting State may be


2. Income, profits or gains from the alienation of property, other than

land as defined in Article 6, that forms part of the business property of a

permanent establishment which an enterprise of one of the Contracting

States has in the other Contracting State, including income, profits or

gains from the alienation of such a permanent establishment (alone or

with the whole enterprise), may be taxed in that other State.

3. Income, profits or gains from the alienation of ships or aircraft

operated in international traffic, or of property other than land as defined

in Article 6 pertaining to the operation of those ships or aircraft, shall be

taxable only in the Contracting State of which the enterprise which

operated those ships or aircraft is a resident.



4. Income, profits or gains derived by a resident of a Contracting

State from the alienation of any shares or other interests in a company, or

of an interest of any kind in a partnership, trust or other entity, where the

value of the assets of such entity, whether they are held directly or

indirectly (including through one or more interposed entities, such as, for

example, through a chain of companies), is principally attributable to

land as defined in Article 6 and, as referred to in that Article, situated in


5. Nothing in this Agreement affects the application of a law of a

Contracting State relating to the taxation of profits or gains of a capital

nature derived from the alienation of property other than that to which

any of paragraphs 1, 2, 3 and 4 apply.”.

Article 7


(a) deleting “Students” in the heading and substituting “Students and

Trainees”; and

(b) inserting “or a trainee” after “student”.

Article 8


(a) deleting “Sources of Income” in the heading and substituting “Sources of

Income and Gains”; and

(b) inserting “or gains” after “Income” in the first line.

Article 9

Article 23 of the Agreement is deleted and substituted with the following:



“Article 23


1. The laws in force in each of the Contracting States shall continue to

govern the taxation of income in that Contracting State except where

provision to the contrary is made in this Agreement. Where income is

subject to tax in both Contracting States, relief from double taxation shall

be given in accordance with the following paragraphs.

2. In the case of Malaysia, subject to the law of Malaysia regarding the

allowance as a credit against Malaysian tax of tax payable in any country

other than Malaysia, the amount of Australian tax payable under the law of

Australia and in accordance with the provisions of this Agreement, by a

resident of Malaysia in respect of income from sources within Australia

shall be allowed as a credit against Malaysian tax payable in respect of that

income. Where such income is a dividend paid by a company which is a

resident of Australia to a company which is a resident of Malaysia and

which owns not less than 10 per cent of the voting shares of the company

paying the dividend, the credit shall take into account Australian tax

payable by that company in respect of its income out of which the dividend

is paid. The credit shall not, however, exceed that part of the Malaysian

tax, as computed before the credit is given which is appropriate to such

item of income.

3. (a) Subject to the provisions of the law of Australia from time

to time in force which relate to the allowance of a credit

against Australian tax of tax paid in a country outside

Australia (which shall not affect the general principle

hereof), Malaysian tax paid under the law of Malaysia and

in accordance with this Agreement, whether directly or by

deduction, in respect of income derived by a person who is a

resident of Australia from sources in Malaysia shall be

allowed as a credit against Australian tax payable in respect

of that income.

(b) Where a company which is a resident of Malaysia and is not

a resident of Australia for the purposes of Australian tax

pays a dividend to a company which is a resident of

Australia and which controls directly or indirectly not less

than 10 per cent of the voting power of the first--mentioned

company, the credit referred to in subparagraph (a) shall



include the Malaysian tax paid by that first--mentioned

company in respect of that portion of its profits out of which

the dividend is paid.

4. Where the income or profits on which an enterprise of one of the

Contracting States has been charged to tax in that Contracting State are also

included in the income or profits of an enterprise of the other Contracting State

as being income or profits which, because of the conditions operative between

the two enterprises, might have been expected to accrue to the enterprise of that

other Contracting State if the enterprises had been independent enterprises

dealing at arm’s length, the income or profits so included shall be treated for the

purposes of this Article as income or profits of the enterprise of the

first--mentioned Contracting State from a source in the other Contracting State

and credit shall be given in accordance with this Article in respect of the extra

tax chargeable in that other Contracting State as a result of the inclusion of such

income or profits.

5. For the purposes of paragraph 6, the term “Malaysian tax forgone”

means—

(a) an amount which, under the laws of Malaysia and in accordance

with this Agreement, would have been payable as Malaysian tax on

income had that income not been exempted either wholly or partly

from Malaysian tax in accordance with—

(i) Schedule 7A of the Income Tax Act 1967 of Malaysia or

sections 22, 23, 29, 35 and 37 of the Promotion of

Investments Act 1986 of Malaysia and section 45 of that Act

to the extent that it relates to sections 21, 22, 26, or 30Q of the

Investment Incentives Act 1968, so far as the sections were in

force on, and have not been modified since, the date of

signature of the Protocol first amending the Agreement or

have been modified only in minor respects so as not to affect

their general character; or

(ii) any other provisions which may subsequently be agreed in an

Exchange of Letters between the Governments of the

Contracting States to be of a substantially similar character;

(b) in the case of interest derived by a resident of Australia which is

exempt from Malaysian tax in accordance with paragraph 3 of



Article 11, the amount which, under the law of Malaysia and in

accordance with this Agreement, would have been payable as

Malaysian tax if the interest were interest to which paragraph 3 of

Article 11 did not apply, and if the tax referred to in paragraph 2 of

Article 11 were not to exceed 10 per cent of the gross amount of the

interest; and

(c) in the case of royalties derived by a resident of Australia, being

approved industrial royalties which are exempt from Malaysian tax

in accordance with paragraph 3 of Article 12, the amount which,

under the law of Malaysia and in accordance with this Agreement,

would have been payable as Malaysian tax if the royalties were

royalties to which paragraph 3 of Article 12 did not apply and if the

tax referred to in paragraph 2 of Article 12 were not to exceed 10


6. (a) For the purposes of subparagraph (a) or (b) of paragraph 3,

Malaysian tax forgone which answers the description in

subparagraph (a) of paragraph 5 shall be deemed to be Malaysian

tax paid.

(b) For the purposes of subparagraph (a) of paragraph 3, Malaysian tax

forgone which answers the description in subparagraph (b) or (c) of


7. Paragraphs 5 and 6 shall apply only in relation to income derived in any

of the 5 years of income beginning with the year of income that commenced on

1 July 1987 and in any later year of income that may be agreed in an Exchange

of Letters for this purpose by the Governments of the Contracting States, or

their authorised representatives.

8. If in an Agreement for the avoidance of double taxation that is

subsequently made between Australia and a third State, Australia should

agree—

(a) in relation to dividends that are derived by a company which is

a resident of Australia from a company which is a resident of

the third State, to give credit for tax paid on the profits out of

which the dividends are paid on the basis of a test of beneficial

ownership by the first--mentioned company of less than 10 per



cent of the paid--up share capital of the second--mentioned

company; or

(b) to give relief from Australian tax of the kind that is provided

for in relation to Malaysia in paragraphs 5 and 6, on a basis

that, other than in minor respects, is more favourable in relation

to the third State than that so provided for,


Malaysia and shall enter into negotiations with the Government of Malaysia

with a view to providing treatment in relation to Malaysia comparable with that


9. Where royalties derived by a resident of Australia are, as film rentals,

subject to the cinematograph film--hire duty in Malaysia, that duty shall, for the

purposes of subparagraph (a) of paragraph 3, be deemed to be Malaysian tax.

10. Where gains derived by a resident of Australia are subject to real

property gains tax in Malaysia, that tax shall, for the purposes of subparagraph

3(a), be deemed to be Malaysian tax.”.

Article 10

Entry into force

1. This Protocol, which shall form an integral part of the Agreement, shall

enter into force on the last of the dates on which the Contracting States

exchange notes through the diplomatic channel notifying each other that the last

of such things has been done as is necessary to give this Protocol the force of

law in Australia and in Malaysia respectively, and thereupon this Protocol shall,

subject to paragraph 2, have effect:

(a) in Australia:

(i) subject to subparagraph 1(a)(ii), for the purposes of Article 9 of

the Protocol in respect of tax on income of any year of income


(ii) to the extent that Article 9 of the Protocol has application in

respect of Malaysian tax forgone in accordance with section 35

or 37 of the Promotion of Investments Act 1986 of Malaysia, in



respect of tax on income of any year of income beginning on or

after 1 July 1985;

(iii) in the case of subparagraph (c) of Article 2 of the Protocol, in

respect of tax on income of any year of income beginning on or

after 1 July 1993; and

(iv) in any other case, in relation to income of any year of income


that in which this Protocol enters into force;

(b) in Malaysia:

(i) for the purposes of Article 9 of the Protocol in respect of

Malaysian tax for any year of assessment beginning on or after

1 January 1988;

(ii) in the case of subparagraph (c) of Article 2 of the Protocol in

respect of tax for any year of assessment beginning on or after

1 January 1994; and

(iii) in any other case, in respect of Malaysian tax for any year of

assessment beginning on or after 1 January in the second

calendar year following the calendar year in which this Protocol

enters into force.

2. Where any provision of the Agreement that is affected by this Protocol

would have afforded any greater relief from tax than is afforded by the

amendments made by this Protocol, that provision shall continue to have effect:

(a) in Australia, for any year of income; and

(b) in Malaysia, for any year of assessment,

beginning, in either case, before the entry into force of this Protocol.

IN WITNESS WHEREOF the undersigned, being duly authorised, have signed

this Protocol.



DONE in duplicate in English and Bahasa Malaysia, both texts being equally

authentic, at Sydney this second day of August, One thousand nine hundred and

ninety--nine.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

AUSTRALIA: MALAYSIA:

MARK VAILE DATO' SERI RAFIDAH AZIZ


Schedule 16B second Malaysian protocol


Schedule 16B—second Malaysian protocol Note: See section 3.

SECOND PROTOCOL AMENDING THE AGREEMENT BETWEEN


MALAYSIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND


TAXES ON INCOME AS AMENDED BY THE FIRST PROTOCOL OF

2 AUGUST 1999

The Government of Australia and the Government of Malaysia,

Desiring to amend the Agreement between the Government of Australia

and the Government of Malaysia for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income done at Canberra

on 20 August 1980 (as amended by the first Protocol to that Agreement, done at

Sydney on 2 August 1999), (in this Protocol referred to as “the Agreement, as

amended”),


ARTICLE 1

Article 9 of the Agreement, as amended, is amended by adding after

paragraph 2 the following paragraph:

“(3) Where profits on which an enterprise of one of the

Contracting States has been charged to tax in that State are also included,

by virtue of the provisions of paragraph 1 or 2, in the profits of an

enterprise of the other Contracting State and charged to tax in that other

State, and the profits so included are profits which might reasonably have


conditions operative between the enterprises had been those which might

reasonably have been expected to have operated between independent

enterprises dealing wholly independently with one another, then the

firstmentioned State shall make an appropriate adjustment to the amount

of tax charged on those profits in the firstmentioned State. In determining

such an adjustment, due regard shall be had to the other provisions of this

Agreement and for this purpose the competent authorities of the

Contracting States shall if necessary consult each other.”.

second Malaysian protocol Schedule 16B


ARTICLE 2

Article 10 of the Agreement, as amended, is deleted and substituted with

the following:

“ARTICLE 10

Dividends

1. Dividends paid by a company which is a resident of one of

the Contracting States for the purposes of its tax, being dividends to

which a resident of the other Contracting State is beneficially entitled,


2. However, those dividends may also be taxed in the

Contracting State of which the company paying the dividends is a

resident, and according to the law of that State, but:

(a) in Australia:

(i) no tax shall be charged on dividends to the extent to

which those dividends have been “franked” in

accordance with Australia's law relating to tax, if the

person beneficially entitled to those dividends is a

company (other than a partnership) which holds

directly at least 10 per cent of the voting power in the

company paying the dividends; and

(ii) tax charged shall not exceed 15 per cent of the gross

amount of the dividends to the extent to which those

dividends are not within subparagraph (a)(i); and

(b) in Malaysia:

no tax shall be charged on dividends paid by a company

which is resident in Malaysia for the purposes of Malaysian

tax being dividends to which a resident of Australia is

beneficially entitled, in addition to the tax chargeable in

respect of the income or profits of the company paying the

dividends.

3. For the purposes of paragraph 2, if the relevant law in either

Contracting State at the date of signature of this Protocol is varied



otherwise than in minor respects so as not to affect its general character,

the Contracting States shall consult each other with a view to agreeing to

any amendment of that paragraph that may be appropriate.

4. The term “dividends” as used in this Article means income

from shares, as well as other amounts which are subjected to the same

taxation treatment as income from shares by the law of the State of which

the company making the distribution is a resident for the purposes of its

tax.

5. The provisions of paragraphs 1 and 2 shall not apply if the

person beneficially entitled to 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 in that other State, and the holding in

respect of which the dividends are paid is effectively connected with that

permanent establishment. In that case the provisions of Article 7 shall

apply.

6. Where a company which is a resident of one of the

Contracting States derives profits or income from the other Contracting

State, that other State may not impose any tax on the dividends paid by

the company—being dividends to which a person who is not a resident of

the other Contracting State is beneficially entitled—except insofar as the

holding in respect of which, such dividends are paid is effectively

connected with a permanent establishment situated in that other State,

even if the dividends paid consist wholly or partly of profits or income


dividends paid by any company which is a resident of Australia for the

purposes of Australian tax and which is also a resident of Malaysia for

the purposes of Malaysian tax.

7. Dividends paid by a company which is a resident of

Malaysia shall include dividends paid by a company which is a resident

of Singapore which for the purpose of those dividends has declared itself

to be a resident of Malaysia, but shall not include dividends paid by a

company which is a resident of Malaysia which for the purpose of those

dividends has declared itself to be a resident of Singapore.”.



ARTICLE 3

Article 12 of the Agreement, as amended, is amended by:

(a) deleting paragraphs 3, 8 and 9 and renumbering the

paragraphs 1 to 6;

(b) deleting “paragraphs 1, 2 and 3” and substituting

“paragraphs 1 and 2” in renumbered paragraph 3; and

(c) deleting “or” at the end of subparagraph (c) of renumbered

paragraph 6, renumbering existing subparagraph “(d)” as

“(f)” and inserting the following subparagraphs:

“(d) the use in connection with television, radio or other

broadcasting, or the right to use in connection with such

broadcasting, visual images or sounds, or both, transmitted

by:

(i) satellite; or

(ii) cable, optic fibre or similar technology;

(e) the use of, or the right to use, some or all of the part of the

radiofrequency spectrum specified in a relevant licence; or”.

ARTICLE 4

Article 21 of the Agreement, as amended, is deleted and substituted with

the following:

“ARTICLE 21

Other Income

1. Items of income of a resident of one of the Contracting

States, wherever arising, not dealt with in the foregoing Articles of this

Agreement shall be taxable only in that State.

2. The provisions of paragraph 1 shall not apply to income,

other than income from land as defined in paragraph 2 of Article 6,

derived by a resident of one of the Contracting States where that income

is effectively connected with a permanent establishment situated in the



other Contracting State. In that case the provisions of Article 7 shall

apply.

3. Notwithstanding the provisions of paragraphs 1 and 2, items

of income of a resident of one of the Contracting States not dealt with in

the foregoing articles of this Agreement from sources in the other

Contracting State may also be taxed in the other Contracting State.”.

ARTICLE 5

Article 23 of the Agreement, as amended, is amended by:

(a) deleting paragraphs 4 to 7 and substituting the following:

“4. For the purposes of paragraph 5, the term “Malaysian tax

forgone” means an amount which, under the laws of Malaysia and in

accordance with this Agreement, would have been payable as Malaysian

tax on income had that income not been exempted either wholly or partly

from Malaysian tax in accordance with Schedules 7A and 7B of the

Income Tax Act 1967 of Malaysia or sections 22, 23, 29, 29A, 29B, 29C,

29D, 29E, 29F, 29G, 29H, 31E, 35, 37 and 41B of the Promotion of

Investments Act 1986 of Malaysia and section 45 of that Act to the extent

that it relates to sections 21, 22, 26, or 30Q of the Investment Incentives

Act 1968, so far as the sections were in force on, and have not been

modified since, the date of signature of the Protocol second amending the

Agreement or have been modified only in minor respects so as not to

affect their general character.

5. Notwithstanding the operation of paragraph 4, Malaysian tax

forgone shall not be deemed to have been paid in respect of income

derived from:

(a) banking, insurance, consulting, accounting, auditing or

similar services; or

(b) the operation of ships or aircraft, other than ships or aircraft

operated principally from places in Malaysia and used solely

in carrying on a business in Malaysia; or

(c) any scheme entered into by an Australian resident with the

purpose of using Malaysia as a conduit for income or as a

location of property in order to evade or avoid Australian tax



through the exploitation of the Australian foreign tax credit

provisions or to confer a benefit on a person who is neither a

resident of Australia, nor of Malaysia.

6. For the purposes of subparagraph (a) or (b) of paragraph 3,

Malaysian tax forgone which answers the description in paragraph 4 and

is not of a type referred to in paragraph 5 shall be deemed to be

Malaysian tax paid.

7. Paragraphs 4, 5 and 6 shall not apply in relation to income

derived in any year of income after the year of income that ends on

30 June 2003.”;

(b) deleting the words “5 and 6” and substituting “4 and 6” in

subparagraph (b) of paragraph 8; and

(c) deleting paragraph 9 and renumbering paragraph 10 as 9.

ARTICLE 6

Article 24 of the Agreement, as amended, is amended by adding after

paragraph 4 the following paragraph:

“5. For the purposes of paragraph 3 of Article XXII

(Consultation) of the General Agreement on Trade in Services, the

Contracting States agree that, notwithstanding that paragraph, any dispute

between them as to whether a measure falls within the scope of this

Agreement may be brought before the Council for Trade in Services, as

provided by that paragraph, only with the consent of both Contracting

States. Any doubt as to the interpretation of this paragraph shall be

resolved under paragraph 3 of this Article or, failing agreement under that

procedure, pursuant to any other procedure agreed to by both Contracting

States.”.

ARTICLE 7

Article 27 of the Agreement, as amended, is amended by numbering the

existing paragraph as 1 and adding after that paragraph, the following:

“2. Persons entitled to a particular tax treatment under:



(a) a law of one of the Contracting States which has been

identified in an Exchangeof Letters between the Contracting

States; or

(b) any law substantially similar to such an identified law which

is subsequently enacted by the relevant Contracting State,

shall not be entitled to any benefit of this Agreement.

3. In the event of either Contracting State becoming aware of a

substantially similar law of the type referred to in subparagraph (b) of

paragraph 2, the Contracting States shall consult each other with a view

to identifying such law in an Exchange of Letters.”.

ARTICLE 8

This Protocol, which shall form an integral part of the Agreement, as

amended, shall enter into force on the last of the dates on which the Contracting

States exchange notes through the diplomatic channel notifying each other that

the last of such things has been done as is necessary to give this Protocol the

force of law in Australia and in Malaysia respectively, and thereupon this

Protocol shall, have effect:

(a) in Australia:

(i) for the purposes of paragraph (a) of Article 5 of the

Protocol, in respect of tax on income of any year of

income beginning on or after 1 July 1992; and

(ii) in any other case, in relation to income of any year of

income beginning on or after 1 July in the calendar

year next following that in which this Protocol enters

into force;

(b) in Malaysia:

(i) for the purposes of paragraph (a) of Article 5 of the

Protocol, in respect of Malaysian tax for any year of

assessment beginning on or after 1 January 1993; and

(ii) in any other case, in respect of Malaysian tax for any

year of assessment beginning on or after 1 January in



the calendar year next following that in which this

Protocol enters into force.

IN WITNESS WHEREOF the undersigned, being duly authorised, have


DONE in duplicate in English and Bahasa Malaysia, both texts being

equally authentic, at Genting Highlands, this 28th day of July, Two thousand

and two.


OF AUSTRALIA: OF MALAYSIA:

Mark Vaile Dato’ Seri Rafidah Aziz



Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion





Government of Sweden for the




The Government of Australia and the Government of Sweden,




ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Agreement shall apply are:

(a) in Australia:

the Australian income tax including the additional tax upon the


(b) in Sweden:

(i) the State income tax, including sailors’ tax and coupon tax;

(ii) the tax on undistributed profits of companies and the tax on

distribution in connection with reduction of share capital or the

winding--up of a company;

(iii) the tax on public entertainers; and

(iv) the communal income tax.

Agreement between the Government of Australia and the Government of Sweden for










applies.

ARTICLE 3

General Definitions















(b) the term “Sweden” means the Kingdom of Sweden and includes any

area outside the territorial sea of Sweden within which under the laws

of Sweden and in accordance with international law the rights of

Sweden with respect to the exploration and exploitation of the natural

resources on the sea--bed or in its subsoil may be exercised;


Contracting State “mean Australia or Sweden, as the context requires;


of persons;



(f) the terms “enterprise of one of the Contracting States” and enterprise

“of the other Contracting State “mean an enterprise carried on by a






Sweden, as the context requires;

(g) the term “tax” means Australian tax or Swedish tax, as the context

requires;



(i) the term “Swedish tax” means tax imposed by Sweden, being tax to




case of Sweden, the Minister of the Budget or his authorized

representative.

(2) In this Agreement, the terms “Australian tax” and “Swedish tax” do not



2.

(3) In the application of this Agreement by a Contracting State, any term not




ARTICLE 4

Residence


Contracting States:



(b) in the case of Sweden, if the person is subject to unlimited tax liability

in Sweden.

(2) In relation to income from sources in Sweden, a person who is subject to


as a resident of Australia unless the income from sources in Sweden is subject

to Australian tax or, if that income is exempt from Australian tax, it is so

exempt solely because it is subject to Swedish tax.





(3) Where by reason of the preceding provisions of this Article an individual is

a resident of both Contracting States, then his status shall be determined in








(4) Where by reason of the provisions of paragraph (1), a person other than an




ARTICLE 5


(1) For the purposes of this Agreement, the term “permanent establishment”



(2) The term “permanent establishment” shall include especially:


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, quarry or any other place of extraction of

natural resources;


















enterprise;




(4) An enterprise shall be deemed to have a permanent establishment in one of

the Contracting States and to carry on business through that permanent

establishment if:






or exploitation of, natural resources, or in activities connected with such

exploration or exploitation.


of the other Contracting State—other than an agent of an independent status to

whom paragraph (6) applies—shall be deemed to be a permanent establishment

of that enterprise in the first--mentioned State if:




















(8) The principles set forth in paragraphs (1) to (7) inclusive shall be applied in

determining for the purposes of paragraph (6) of Article 11 and paragraph (5) of

Article 12 of this Agreement whether there is a permanent establishment outside

both Contracting States, and whether an enterprise, not being an enterprise of

one of the Contracting States, has a permanent establishment in one of the

Contracting States.

ARTICLE 6






(2) Income from a lease of land and income from any other direct interest in or

over land, whether or not improved, shall be regarded as income from real






ARTICLE 7

Business Profits




















be allowed as deductions expenses of the enterprises, being expenses which are

incurred for the purposes of the permanent establishment (including executive

and general administrative expenses so incurred) and which would be






enterprise.

(5) If the information available to the taxation authority of a Contracting State

is inadequate to determine the profits to be attributed to the permanent




available to the taxation authority permits, in accordance with the principles of

this Article.





Contracting State relating to taxation of profits from insurance with

non--residents provided that if the relevant law in force in either State at the

date of signature of this Agreement is varied (otherwise than in minor respects

so as not to affect its general character) the Contracting States shall consult with


be appropriate.

ARTICLE 8














transport operating organisation or in an international operating agency.



Contracting State for discharge at another place in that State shall be treated as

profits from operations of ships or aircraft confined solely to places in that

State.

ARTICLE 9


(1) Where:














(2) If the information available to the taxation authority of a Contracting State

is inadequate to determine the profits to be attributed to an enterprise, nothing in

this Article shall affect the application of any law of that State relating to the

determination of the tax liability of a person, provided that that law shall be

applied, so far as the information available to the taxation authority permits, in

accordance with the principles of this Article.







(2), in the profits of an enterprise of the other Contracting State and taxed

accordingly, and the profits so included are profits which might have been







had to the other provisions of this Agreement, and for this purpose the


other.

ARTICLE 10

Dividends








(3) The term “dividends” in this Article means income from shares and other







therein, or performs in that other State independent personal services from a


paid is effectively connected with such permanent establishment or fixed base.


shall apply.








State except insofar as the holding in respect of which the dividends are paid is

effectively connected with a permanent establishment or fixed base situated in

that other State; provided that this paragraph shall not apply in relation to


of Australian tax and which is also a resident of Sweden for the purposes of

Swedish tax.

(6) Subject to the provisions of this Agreement, a Contracting State may

impose on the income of a company which is a resident of the other Contracting

State, tax in addition to the tax which would be chargeable on the taxable

income of a company which is a resident of the first--mentioned State, provided

that any additional tax so imposed by the first--mentioned State shall not exceed

15 per cent of the amount by which the taxable income of the year of income

exceeds the tax which would have been payable on that taxable income if the

company had been a resident of the first--mentioned State.

(7) In this Article a reference to a company which is a resident of one of the

Contracting States for the purposes of its tax is, in the case of Sweden, a

reference to a company which is subject to unlimited tax liability in Sweden.

ARTICLE 11

Interest

(1) Interest arising in one of the Contracting States, being interest to which a


that other State.

(2) Such interest may be taxed in the Contracting State in which it arises, and



(3) Notwithstanding the provisions of paragraph (2), interest derived by the

Government of a Contracting State, or by any other body exercising

governmental functions in, or in a part of, a Contracting State, or by the central

bank of a Contracting State, or, in the case of Sweden, the National Debt Office,

shall be exempt from tax in the other Contracting State.




other form of indebtedness as well as all other income assimilated to income





from money lent by the taxation law of the Contracting State in which the

income arises.

(5) The provisions of paragraph (1) and (2) shall not apply if the person


States, carries on business in the other Contracting State, in which the interest

arises, through a permanent establishment situated therein, or performs in that


the indebtedness in respect of which the interest is paid is effectively connected

with such permanent establishment or fixed base. In such a case, the provisions

of Article 7 or Article 14, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is

that State itself or a political sub--division or local authority of that State or a

person who is a resident of that State. Where, however, the person paying the

interest, whether he is a resident of a Contracting State or not, has in a

Contracting State or outside both Contracting States a permanent establishment

or fixed base in connection with which the indebtedness on which the interest is

paid was incurred, and such interest is borne by such permanent establishment

or fixed base, then such interest shall be deemed to arise in the State in which

the permanent establishment or fixed base is situated. In this paragraph, a

reference to a person who is a resident of a Contracting State is, in relation to a

company, a reference to a company which, in the case of Australia, is a resident

of Australia for the purposes of its tax, or, in the case of Sweden, is subject to

unlimited tax liability in Sweden.














ARTICLE 12

Royalties

(1) Royalties arising in one of the Contracting States, being royalties to which


that other State.

(2) Such royalties may be taxed in the Contracting State in which they arise,








right;


equipment;


or information;














States, carries on business in the other Contracting State, in which the royalties

arise, through a permanent establishment situated therein, or performs in that


the right or property in respect of which the royalties are paid or credited is





effectively connected with such permanent establishment or fixed base. In such

a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is

that State itself or a political sub--division or local authority of that State or a

person who is a resident of that State. Where, however, the person paying the

royalties, whether he is a resident of a Contracting State or not, has in a


or fixed base in connection with which the liability to pay the royalties was

incurred, and the royalties are borne by the permanent establishment or fixed

base, then the royalties shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated. In this paragraph, a reference

to a person who is a resident of a Contracting State is, in relation to a company,

a reference to a company which, in the case of Australia, is a resident of

Australia for the purposes of its tax, or, in the case of Sweden is subject to

unlimited tax liability in Sweden.



person the amount of the royalties paid or credited, having regard to what they







ARTICLE 13





(a) the term “real property” shall include:











(b) real property shall be deemed to be situated:












(3) Subject to the provisions of paragraph (1), income from the alienation of

capital assets of an enterprise of one of the Contracting States or available to a

resident of one of the Contracting States for the purpose of performing


State, but, where those assets form part of the business property of a permanent

establishment or fixed base situated in the other Contracting State, such income


ARTICLE 14

















ARTICLE 15


(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and









first--mentioned State if:


exceeding in the aggregate 183 days in the year of income of that other

State; and





other State; and

(d) the remuneration is, or upon application of this Article will be, subject

to tax in the first--mentioned State.



international traffic may be taxed in the Contracting State in which the place of

effective management of the enterprise is situated. Where a resident of Sweden

derives remuneration in respect of employment exercised aboard an aircraft

operated in international traffic by the air transport consortium Scandinavian

Airlines System (SAS), such remuneration shall be taxable only in Sweden.

ARTICLE 16

Directors’ Fees




other State.





ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 and 15, income derived by




(2) Where income in respect of the personal activities of an entertainer as such




(3) Where the services of an entertainer referred to in paragraph (1) are

provided in a Contracting State by an enterprise of the other Contracting State,

the profits derived from providing those services by such an enterprise may,

notwithstanding anything contained in this Agreement, be taxed in the


ARTICLE 18


(1) Subject to the provisions of paragraph (3), any pension or annuity paid to a


(2) The term “annuity” means a stated sum payable periodically at stated times




(3) Pensions paid by one of the Contracting States or a political sub--division

or local authority of that State to any individual in respect of services rendered

to that State, political sub--division or local authority, as the case may be, and

pensions paid under the social security scheme of one of the Contracting States

may be taxed in that State. The provisions of this paragraph shall apply only to

individuals who are citizens of the Contracting State from which the payments

are made.

(4) Any alimony or other maintenance payment arising in one of the

Contracting States and paid to a resident of the other Contracting State, shall be

taxable only in the first--mentioned State.





ARTICLE 19

Government Service


Contracting States or a political sub--division or local authority of that State to

any individual in respect of services rendered in the discharge of governmental



other State and the recipient is a resident of that other State who:




(2) The provisions of paragraph (1) shall not apply to remuneration in respect

of services rendered in connection with any trade or business carried on by one

of the Contracting States or a political sub--division or local authority of that

State. In such a case, the provisions of Article 15 or Article 16 as the case may

be, shall apply.

ARTICLE 20


(1) A professor or teacher who visits a Contracting State for a period not

exceeding two years for the purpose of teaching or carrying out advanced study

or research at a university, college, school or other educational institution in that

State and who immediately before that visit was a resident of the other

Contracting State shall be exempt from tax in the first--mentioned State on any

remuneration for such teaching, advanced study or research in respect of which

he is, or upon the application of this Article will be, subject to tax in the other

State.

(2) This Article shall not apply to remuneration which a professor or teacher



ARTICLE 21

Students



State and who is temporarily present in that other State solely for the purpose of





his education, receives payments from sources outside that other State for the


tax in that other State.

ARTICLE 22


(1) Items of income, not expressly mentioned in the foregoing Articles,

derived from sources in one of the Contracting States by a resident of the other

Contracting State may be taxed in the first--mentioned State.

(2) Subject to the provisions of paragraph (3), income derived by a person who

is a resident of one of the Contracting States from sources in that Contracting

State or from sources outside both Contracting States shall be taxable only in

the Contracting State of which that person is a resident.


resident of one of the Contracting States where that income is effectively

connected with a permanent establishment or fixed base situated in the other

Contracting State. In such a case, the provisions of Article 7 or Article 14, as


ARTICLE 23

Source of Income

(1) Income derived by a resident of Sweden which, under any one or more of

Articles 6 to 8, Articles 10 to 18 and Article 22 may be taxed in Australia, shall

for the purposes of the income tax law of Australia be deemed to be income

from sources in Australia.

(2) Income derived by a resident of Australia which, under any one or more of

Articles 6 to 8, Articles 10 to 18 and Article 22 may be taxed in Sweden, shall

for the purposes of paragraph (1) of Article 24 and of the income tax law of

Australia be deemed to be income from sources in Sweden.

ARTICLE 24





Swedish tax paid under the law of Sweden and in accordance with this






person who is a resident of Australia from sources in Sweden (not including, in








income and are received from a company which is a resident of Sweden.


the dividends ceases to be allowable under that law, credit shall be allowed

under paragraph (1) to the first--mentioned company for the Swedish tax paid

on the profits out of which the dividends are paid, as well as for the Swedish tax

paid on the dividends for which credit is to be allowed under paragraph (1), but

only if that company beneficially owns at least 10 per cent of the paid--up share

capital of the second--mentioned company.

(3) Subject to the provisions of paragraphs (4) and (5) of this Article, where a

resident of Sweden derives income which, in accordance with the provisions of

this Agreement may be taxed in Australia, Sweden shall allow as a deduction

from the tax on the income of that person, an amount equal to the income tax

paid in Australia. The deduction shall not, however, exceed that part of the

income tax, as computed before the deduction is given, which is appropriate to

the income which may be taxed in Australia.

(4) Where a resident of Sweden derives income which, in accordance with the

provisions of this Agreement, shall be taxable only in Australia, Sweden may

include this income in the tax case but shall allow as a deduction from the

income tax that part of the income tax which is appropriate to the income

derived from Australia.

(5) Notwithstanding the provisions of paragraph (1) of Article 10, dividends

paid by a company which is a resident of Australia and to which a company

which is a resident of Sweden is beneficially entitled shall be exempt from

Swedish tax to the extent that the dividends would have been exempt under

Swedish law if both companies had been Swedish companies. This exemption

shall not be granted unless the principal part of the profits or income of the

company paying the dividends arises, directly or indirectly, from business

activities other than the management of securities and other similar movable

property and such activities are carried on within Australia by the company





paying the dividends or by a company in which it owns at least 25 per cent of

the paid--up share capital.

ARTICLE 25


(1) Where a resident of one of the Contracting States considers that the actions

of the taxation authority of one or both of the Contracting States result or will





notification of the action.

(2) The competent authority shall endeavour, if the claim appears to it to be



view to the avoidance of taxation not in accordance with this Agreement. The

solution so reached shall be implemented notwithstanding any time limits in the

national laws of the Contracting States.

(3) The competent authorities of the Contracting States shall jointly endeavour

to resolve any difficulties or doubts arising as to the application of this

Agreement.



Agreement.

ARTICLE 26

















such purposes.







State;




policy.

ARTICLE 27





ARTICLE 28

Entry into Force

This Agreement shall come into force on the date on which the

Government of Australia and the Government of Sweden exchange notes at

Stockholm through the diplomatic channel notifying each other that the last of

such things has been done as is necessary to give this Agreement the force of

law in Australia and in Sweden, as the case may be, and thereupon this

Agreement shall have effect:

(a) in Australia:









(ii) in respect of other Australian tax, in relation to income of any



force;

(b) In Sweden, in respect of income derived on or after 1 January in the

calendar year immediately following that in which the Agreement

enters into force.

ARTICLE 29

Termination

This Agreement shall continue in effect indefinitely, but the Government

of Australia or the Government of Sweden may, on or before 30 June in any


into force, give to the other Government through the diplomatic channel written


effective:

(a) in Australia:







next following that in which the notice of termination is given;

(b) in Sweden, in respect of income derived on or after 1 January in the

calendar year next following that in which the notice of termination is

given.



DONE in duplicate at Canberra this fourteenth day of January One

thousand nine hundred and eighty--one in the English language.

JOHN HOWARD L. HEDSTROM


OF AUSTRALIA OF SWEDEN


the Kingdom of Denmark for the Avoidance of Double Taxation and the Prevention of

Fiscal Evasion with respect to Taxes on Income




Government of the Kingdom of

Denmark for the Avoidance of Double



Income Section 3


Denmark,

Desiring to conclude an Agreement for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income,


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered


(a) in Australia:



(b) in Denmark:

the income taxes to the State and to the municipalities

(indkomstskatterne til staten og til kommunerne).

Agreement between the Government of Australia and the Government of the Kingdom

of Denmark for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion









applies.

ARTICLE 3

General Definitions















(b) the term “Denmark” means the Kingdom of Denmark including any

area outside the territorial sea of Denmark which in accordance with

international law has been or may hereafter be designated under Danish

laws as an area within which Denmark may exercise sovereign rights

with respect to the exploration and exploitation of the natural resources

of the sea--bed or its subsoil; the term does not comprise the Faroe

Islands and Greenland;


Contracting State” mean Australia or Denmark, as the context requires;


body of persons;


treated as a body corporate or company for tax purposes;








Denmark, as the context requires;

(g) the term “tax” means Australian tax or Danish tax, as the context

requires;



(i) the term “Danish tax” means tax imposed by Denmark, being tax to




case of Denmark, the Minister for Inland Revenue, Customs and Excise

or his authorized representative.

(2) In this Agreement, the terms “Australian tax” and “Danish tax” do not



2.


not defined in this Agreement shall, unless the context otherwise requires, have

the meaning which it has under the laws of that State relating to the taxes to

which this Agreement applies.

ARTICLE 4

Residence



(a) in the case of Australia, subject to the provisions of paragraph (2), if the

person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Denmark, if the person is liable to tax therein by reason of

his domicile, residence, place of incorporation or any other criterion of

a similar nature but not if he is liable to tax in Denmark in respect only

of income from sources therein.

(2) In relation to income from sources in Denmark, a person who is subject

to Australian tax on income which is from sources in Australia shall not be

treated as a resident of Australia unless the income from sources in Denmark is





subject to Australian tax or, if that income is exempt from Australian tax, it is so

exempt solely because it is subject to Danish tax.
















be a resident solely of the Contracting State in which it is created.

ARTICLE 5







(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;


natural resources;



lasts for more than twelve months.















enterprise;






establishment if—






or exploitation of, natural resources, or in activities connected with such

exploration or exploitation.

























applied in determining for the purposes of paragraph (5) of Article 11 and

paragraph (5) of Article 12 of this Agreement whether there is a permanent

establishment outside both Contracting States, and whether an enterprise, not

being an enterprise of one of the Contracting States, has a permanent

establishment in one of the Contracting States.

ARTICLE 6













ARTICLE 7

Business Profits


























(4) Insofar as it has been customary in a Contracting State to determine the

profits to be attributed to a permanent establishment on the basis of an

apportionment of the total profits of the enterprise to its various parts, nothing

in paragraph (2) shall preclude that Contracting State from determining the

profits to be taxed by such an apportionment as may be customary; the method

of apportionment adopted shall, however, be such that the result shall be in

accordance with the principles contained in this Article.



the enterprise.







of this Article.

(7) Where profits include items of income which are dealt with separately

in other Articles of this Agreement, then the provisions of those Articles shall









date of signature of this Agreement is varied (otherwise than in minor respects



be appropriate.

ARTICLE 8










joint transport operating organization or in an international operating agency.


ships or aircraft of passengers, livestock, mail, goods or merchandise shipped in

a Contracting State for discharge at another place in that State shall be treated as


State.

(5) With respect to profits derived by the Danish, Norwegian and Swedish

air transport consortium, known as the Scandinavian Airlines System (SAS), the

provisions of paragraphs (1) and (2) shall only apply to such part of the profits

as corresponds to the shareholding in the consortium held by Det Danske

Luftfartsselskab (DDL), the Danish partner of Scandinavian Airlines System

(SAS).

ARTICLE 9


(1) Where—




































other.

ARTICLE 10

Dividends




that other State.

















therein, or performs in that other State independent personal services from a




shall apply.





are paid is effectively connected with a permanent establishment or fixed base


relation to dividends paid by any company which is a resident of Australia for

the purposes of Australian tax and which is also a resident of Denmark for the

purposes of Danish tax.

(6) Subject to the provisions of this Agreement, a Contracting State may

impose on the income of a company which is a resident of the other Contracting

State, tax in addition to the tax which would be chargeable on the taxable

income of a company which is a resident of the first--mentioned State, provided

that any additional tax so imposed by the first--mentioned State shall not exceed

15 per cent of the amount by which the taxable income of the year of income

exceeds the tax which would have been payable on that taxable income if the

company had been a resident of the first--mentioned State.

(7) Where an individual who is a resident of Australia receives from a

company which is a resident of Denmark a dividend to which he is beneficially





entitled and which, if received by a resident of Denmark, would entitle the

resident to the Danish tax credit (skattegodtgørelse)—

(a) the individual shall be entitled to the credit subject to the deduction of

tax that would apply if that credit were a dividend;

(b) the amount of the credit shall be treated for purposes of Australian tax

as assessable income from sources in Denmark.

ARTICLE 11

Interest



that other State.









income arises.










is that State itself or a political sub--division or local authority of that State or a





indebtedness on which the interest is paid was incurred, and such interest is

borne by such permanent establishment or fixed base, then such interest shall be





deemed to arise in that State in which the permanent establishment or fixed base

is situated.










ARTICLE 12

Royalties












right;


equipment;


or information;





















the right or property in respect of which the royalties are paid or credited is




is that State itself or a political sub--division or local authority of that State or a





liability to pay the royalties was incurred, and the royalties are borne by the

permanent establishment or fixed base, then the royalties shall be deemed to

arise in the State in which the permanent establishment or fixed base is situated.



other person the amount of the royalties paid or credited, having regard to what

they are paid or credited for, exceeds the amount which might have been

expected to have been agreed upon by the payer and the person so entitled in the

absence of such relationship, the provisions of this Article shall apply only to

the last--mentioned amount. In that case, the excess part of the amount of the



ARTICLE 13


(1) Income from alienation of real property may be taxed in the Contracting

State in which that property is situated.


























of capital assets of an enterprise of one of the Contracting States or available to

a resident of one of the Contracting States for the purpose of performing


State, but, where those assets form part of the business property of a permanent

establishment or fixed base situated in the other Contracting State, such income


ARTICLE 14

















ARTICLE 15












(a) the recipient is present in that other State for a period of periods not


State; and





other State; and

(d) the remuneration is, or upon the application of this Article will be,

subject to tax in the first--mentioned State.



international traffic may be taxed in the Contracting State in which the place of

effective management of the enterprise is situated. Where a resident of Denmark

derives remuneration in respect of an employment exercised aboard an aircraft

operated in international traffic by the Scandinavian Airlines System (SAS)

consortium, such remuneration shall be taxable only in Denmark.





ARTICLE 16

Directors’ Fees




other State.

ARTICLE 17

Entertainers









ARTICLE 18


(1) Subject to the provisions of paragraph (3), any pension or annuity paid

to a resident of one of the Contracting States shall be taxable only in that State.





(3) Pensions paid by one of the Contracting States or a political

sub--division or local authority of that State to any individual in respect of

services rendered to that State, political sub--division or local authority, as the

case may be, and pensions paid under the social security scheme of one of the

Contracting States may be taxed in that State. The provisions of this paragraph

shall apply only to individuals who are citizens of the Contracting State from

which the payments are made.





ARTICLE 19

Government Service












by one of the Contracting States or a political sub--division or local authority of

that State. In such a case, the provisions of Article 15 or Article 16, as the case


ARTICLE 20

Students







ARTICLE 21



not expressly mentioned in the foregoing Articles of this Agreement shall be

taxable only in that Contracting State.

(2) However, if such income is derived by a resident of one of the

Contracting States from sources in the other Contracting State, such income

may also be taxed in the Contracting State in which it arises.










ARTICLE 22

Source of Income

(1) Income derived by a resident of Denmark which, under any one or more

of Articles 6 to 8 and Articles 10 to 18 and Article 21 may be taxed in Australia,

shall for the purposes of the income tax law of Australia be deemed to be

income from sources in Australia.

(2) Income derived by a resident of Australia which, under any one or more

of Articles 6 to 8 and Articles 10 to 18 and Article 21 may be taxed in

Denmark, shall for the purposes of paragraph (1) of Article 23 and of the

income tax law of Australia be deemed to be income from sources in Denmark.

ARTICLE 23





hereof), Danish tax paid under the law of Denmark and in accordance with this


person who is a resident of Australia from sources in Denmark (not including in




(2) Double taxation shall be avoided as follows in Denmark:

(a) Subject to the provisions of sub--paragraph (c), where a resident of

Denmark derives income which, in accordance with the provisions of

this Agreement may be taxed in Australia, Denmark shall allow as a

deduction from the tax on the income of that resident, an amount equal

to the income tax paid in Australia;

(b) Such deduction shall not, however, exceed that part of the income tax,

as computed before the deduction is given, which is attributable to the

income which may be taxed in Australia;

(c) Where a resident of Denmark derives income which, in accordance with

the provisions of this Agreement, shall be taxable only in Australia,





Denmark may include this income in the tax base, but shall allow as a

deduction from the income tax that part of the income tax which is

attributable to the income derived from Australia.

(3) In the event that one of the Contracting States should cease to allow a

company which is a resident of that State relief from its tax in respect of

dividends paid to it by a company which is a resident of the other Contracting

State, being relief available under the taxation law of the first--mentioned State

as in force at the date of signature of this Agreement, that State will

immediately advise the other State of the change and enter into negotiations

with it to establish new provisions concerning the relief to be allowed in the

first--mentioned State under this Article in respect of that State’s tax on the

dividends.

ARTICLE 24



actions of the competent authority of one or both of the Contracting States result

or will result for him in taxation not in accordance with this Agreement, he

may, notwithstanding the remedies provided by the national laws of those

States, present his case to the competent authority of the Contracting State of

which he is a resident. The case must be presented within three years from the

first notification of the action giving rise to taxation not in accordance with this

Agreement.




view to the avoidance of taxation not in accordance with this Agreement. The





this Agreement.



Agreement.





ARTICLE 25












relation to, the taxes to which this Agreement applies. It shall be used only for

such purposes and may be disclosed in public court proceedings or in judicial

decisions.







State;




policy.

ARTICLE 26





ARTICLE 27

Entry into Force

This Agreement shall enter into force on the date on which the Government

of Australia and the Government of Denmark exchange notes through the







Denmark, as the case may be, and thereupon this Agreement shall have effect—

(a) in Australia—








force;

(b) in Denmark—

in relation to income derived on or after 1 January in the

calendar year immediately following that in which the

Agreement enters into force.

ARTICLE 28

Termination


Australia or the Government of Denmark may, on or before 30 June in any


into force, give to the other Government through the diplomatic channel written


effective—

(a) in Australia—












given;

(b) in Denmark—

in relation to income derived on or after 1 January in the

calendar year immediately following that in which the notice of




DONE in duplicate at Canberra this first day of April One thousand nine

hundred and eighty--one in the English language.

JOHN HOWARD MOGENS WARBERG


OF AUSTRALIA OF THE KINGDOM OF DENMARK


Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with

respect to Taxes on Income and Capital Gains




Government of Ireland for the



respect to Taxes on Income and

Capital Gains Section 3

The Government of Australia and the Government of Ireland,

Desiring to conclude an Agreement for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income and capital gains,


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered


(a) in Australia:



(b) in Ireland:

(i) the income tax;


(iii) the capital gains tax.



Agreement between the Government of Australia and the Government of Ireland for the


Taxes on Income and Capital Gains Schedule 20


of this Agreement in addition to, or in place of, the existing taxes. As soon as

possible after the end of each calendar year, the competent authority of each

Contracting State shall notify the competent authority of the other Contracting

State of any substantial changes which have been made in the laws of the State


ARTICLE 3

General Definitions















(b) the term “Ireland” includes any area outside the territorial waters of

Ireland which in accordance with international law has been or may

hereafter be designated, under the laws of Ireland concerning the

Continental Shelf, as an area within which the rights of Ireland with

respect to the sea--bed and subsoil and their natural resources may be

exercised;

(c) the terms “Contracting State, one of the Contracting States” and “the

other Contracting State” mean Australia or Ireland, as the context

requires;


body of persons;









resident of Australia or an enterprise carried on by a resident of Ireland,

as the context requires;

(g) the term “tax” means Australian tax or Irish tax, as the context requires;



(i) the term “Irish tax” means tax imposed by Ireland, being tax to which

this Agreement applies by virtue of Article 2;

(j) the term “competent authority” means:

(i) in the case of Australia, the Commissioner of Taxation or his

authorised representative;

(ii) in the case of Ireland, the Revenue Commissioners or their

authorised representative.

(2) In this Agreement, the terms “Australian tax” and “Irish tax” do not



2.





ARTICLE 4

Residence



(a) in the case of Australia, subject to the provisions of paragraph (2) of

this Article, if the person is a resident of Australia for the purposes of

Australian tax; and

(b) in the case of Ireland, if the person is liable to tax therein by reason of

his domicile, residence, place of management or any other criterion of a

similar nature but not if he is liable to tax in Ireland in respect only of

income for sources therein.

(2) In relation to income from sources in Ireland a person who is subject to


as a resident of Australia unless the income from sources in Ireland is subject to






solely because it is subject to Irish tax.














(4) Where by reason of the provisions of paragraph (1) of this Article, a person

other than an individual is a resident of both Contracting States, then it shall be



ARTICLE 5


(1) For the purposes of this Agreement, the term “permanent establishment”





(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;


natural resources;



exists for more than twelve months;





(i) an installation or structure used for the exploration of natural resources.











enterprise;






establishment if—



or assembly project which is being undertaken in that State;

(b) substantial equipment is being used in that State by, for or under

contract with the enterprise; or

(c) it carries on activities in that State in connection with the exploration or

exploitation of the sea--bed, subsoil or their natural resources in that

State.



whom paragraph (6) of this Article applies—shall be deemed to be a permanent























(8) The principles set forth in paragraphs (1) to (7) of this Article shall be


paragraph (5) of Article 13 whether there is a permanent establishment outside

both Contracting States, and whether an enterprise, not being an enterprise of

one of the Contracting States, has a permanent establishment in one of the

Contracting States.

ARTICLE 6

Limitation of Relief

Where under any provision of this Agreement income is relieved from tax in

one of the Contracting States and, under the law in force in the other

Contracting State—

(a) the income or a part thereof is exempt from tax; or

(b) a person, in respect of the said income, is subject to tax by reference to

the amount thereof which is remitted to or received in that other State,

and not by reference to the full amount thereof, then the relief to be

allowed under this Agreement in the first--mentioned State shall

apply—

(c) where (a) above applies, only to so much of the income as is not exempt

from tax in the other State; or

(d) where (b) above applies, only to so much of the income as is remitted to

or received in the other State.





ARTICLE 7




(2) In this Article, the term “real property”—

(a) in the case of Australia, has the meaning which it has under the laws of

Australia, and shall also include—


improved or not;

(ii) a right to receive variable or fixed payments as consideration

for the working of, or the right to work, mineral deposits, oil or

gas wells, quarries or other places of extraction or exploitation

of natural resources; and

(b) in the case of Ireland, means immovable property according to the laws

of Ireland, and shall also include—


(ii) rights to which the provisions of the general law respecting

landed property apply;

(iii) usufruct of immovable property; and (iv) a right to

receive variable or fixed payments as consideration for the

working of, or the right to work, mineral deposits, oil or gas

wells, quarries or other places of extraction or exploitation of

natural resources.

Ships, boats and aircraft shall not be regarded as real property.

(3) The provisions of paragraph (1) of this Article shall apply to income

derived from the direct use, letting or use in any other form of real property.

(4) A lease of land, any other interest in or over land and any right referred to

in any of the subparagraphs of paragraph (2) of this Article shall be regarded as

situated where the land, mineral deposits, oil or gas wells, quarries or natural

resources as the case may be, are situated.

(5) The provisions of paragraphs (1), (3) and (4) of this Article shall also apply

to income from real property of an enterprise and to income from real property

used for the performance of professional services.





ARTICLE 8

Business Profits







(2) Subject to the provisions of paragraph (3) of this Article, where an

enterprise of one of the Contracting States carries on business in the other

Contracting State through a permanent establishment situated therein, there

shall in each Contracting State be attributed to that permanent establishment the

profits which it might be expected to make if it were a distinct and separate

enterprise engaged in the same or similar activities under the same or similar

conditions and dealing wholly independently with the enterprise of which it is a

permanent establishment or with other enterprises with which it deals.










enterprise.







of this Article.








(7) Nothing in this Article shall apply to either Contracting State to prevent the

operation in the Contracting State of any provision of its law relating

specifically to the taxation of any person who carries on a business of any form

of insurance.

ARTICLE 9




(2) Notwithstanding the provisions of paragraph (1) of this Article, such

profits may be taxed in the other Contracting State where they are profits from


(3) The provisions of paragraphs (1) and (2) of this Article shall apply in

relation to the share of the profits from the operation of ships or aircraft derived

by a resident of one of the Contracting States through participation in a pool

service, in a joint transport operating organization or in an international

operating agency.





State.

ARTICLE 10


(1) Where—
























(3) Notwithstanding the provisions of this Article, an enterprise of one of the

Contracting States may be taxed by that Contracting State as if this Article had

not entered into force and had not had effect but, so far as it is practicable to do

so, in accordance with the principles of this Article.


been charged to tax in that State are also included, by virtue of paragraphs (1),

(2) or (3) of this Article, in the profits of an enterprise of the other Contracting

State and taxed accordingly, and the profits so included are profits which might

have been expected to have accrued to that enterprise of the other State if the








other.

(5) The provisions of paragraph (4) of this Article relating to an appropriate

adjustment are not applicable after the expiration of six years from the end of

the year of assessment or financial year, as the case may be, in respect of which

a Contracting State has charged to tax the profits to which the adjustment would

relate.

ARTICLE 11

Dividends

(1) Dividends paid by a company which is a resident of Australia for the

purposes of Australian tax, being dividends to which a resident of Ireland is

beneficially entitled, may be taxed in Ireland. Such dividends may also be taxed





in Australia, according to the law of Australia, but the tax so charged shall not

exceed 15 per cent of the gross amount of the dividends.

(2) (a) Dividends paid by a company which is a resident of Ireland for the

purposes of Irish tax, being dividends to which a resident of Australia is

beneficially entitled, may be taxed in Australia.

(b) Where a resident of Australia is entitled to a tax credit in respect of

adividend under paragraph (3) of this Article, tax may also be charged

in Ireland and according to the laws of Ireland on the aggregate of the

amount or value of that dividend and the amount of that tax credit at a

rate not exceeding 15 per cent.

(c) Except as aforesaid, dividends paid by a company which is a resident

ofIreland for the purposes of Irish tax, being dividends to which a

resident of Australia is beneficially entitled, shall be exempt from any

tax in Ireland which is chargeable on dividends.

(3) A resident of Australia who receives dividends from a company which is a

resident of Ireland shall, subject to the provisions of paragraph (4) of this

Article and provided he is the beneficial owner of the dividends, be entitled to

the tax credit in respect thereof to which an individual resident in Ireland would

have been entitled had he received those dividends, and to the payment of any

excess of that tax credit over his liability to Irish tax. Any such credit shall be

treated for the purposes of Australian tax as assessable income from sources in

Ireland.

(4) The provisions of paragraph (3) of this Article shall not apply where the

beneficial owner of the dividends (being a company) is, or is associated with, a

company which either alone or together with one or more associated companies

controls directly or indirectly 10 per cent or more of the voting power in the

company paying the dividends. For the purposes of this paragraph two

companies shall be deemed to be associated if one controls directly or indirectly

more than 50 per cent of the voting power in the other company, or a third

company controls more than 50 per cent of the voting power in both of them.

(5) The term dividends in this Article means income from shares and includes

any income or distribution assimilated to income from shares under the taxation

law of the Contracting State of which the company paying the dividends or

income or making the distribution is a resident.

(6) Where the company paying a dividend is a resident of one of the

Contracting States and the beneficial owner of the dividend, being a resident of

the other Contracting State, owns 10 per cent or more of the class of shares in





respect of which the dividend is paid, paragraphs (2) and (3) of this Article shall

not apply to the dividend to the extent that it can have been paid only out of

profits which the company paying the dividend earned or other income which it

received in a period ending 12 months or more before the relevant date. For the

purposes of this paragraph the term relevant date means the date on which the

beneficial owner of the dividend became the owner of 10 per cent or more of

the class of shares in question: provided that this paragraph shall not apply if the

shares were acquired for bona fide commercial reasons and not primarily for the

purpose of securing the benefit of this Article.

(7) The provisions of paragraphs (1), (2) and (3) of this Article shall not apply

if the person beneficially entitled to 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 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 provisions of Article 8 or Article







that other State: provided that this paragraph shall not apply in relation to


of Australian tax and which is also a resident of Ireland for the purposes of Irish

tax.

ARTICLE 12

Interest



that other State.








-.(3) The term “interest” in this Article includes interest from Government





income arises but does not include any income which is treated as a dividend

under Article 11.

(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if

the person beneficially entitled to the interest, being a resident of one of the


the interest arises, through a permanent establishment situated therein, or


situated therein, and the indebtedness in respect of which the interest is paid is









indebtedness on which the interest is paid was incurred, and such interest is

borne by such permanent establishment or fixed base, then such interest shall be

deemed to arise in the State in which the permanent establishment or fixed base

is situated.


beneficially entitled to the interest or between both of them and some other








(7) The provisions of this Article shall not apply if the indebtedness in respect

of which the interest is paid was created or assigned mainly for the purpose of

taking advantage of this Article and not for bona fide commercial reasons.





ARTICLE 13

Royalties



that other State.









right;


equipment;


or information;



such property or right as is mentioned in subparagraph (a), any such

equipment as is mentioned in subparagraph (b) or any such knowledge

or information as is mentioned in subparagraph (c);







(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if

the person beneficially entitled to the royalties, being a resident of one of the


the royalties arise, through a permanent establishment situated therein, or


situated therein, and the right or property in respect of which the royalties are

paid or credited is effectively connected with such permanent establishment or





fixed base. In such a case, the provisions of Article 8 or Article 15, as the case








liability to pay the royalties was incurred, and the royalties are borne by the

permanent establishment or fixed base, then the royalties shall be deemed to

arise in the State in which the permanent establishment or fixed base is situated.







last--mentioned ammount. In that case, the excess part of the amount of the



(7) The provisions of this Article shall not apply if the right or property in

respect of which the royalties were paid or credited was created or assigned

mainly for the purpose of taking advantage of this Article and not for bona fide

commercial reasons.

ARTICLE 14


(1) Income or gains from the alienation of real property may be taxed in the



(a) the term “gains” means, in the case of Ireland, chargeable gains as

defined in the taxation law of Ireland;

(b) the term “real property” shall include—

(i) a lease of land or any other interest in or over land;

(ii) rights to exploit, or to explore for, natural resources;





(iii) shares or comparable interests in a company the assets of which

consist wholly or principally of interests in or over land in one

of the Contracting States or of rights to exploit, or to explore

for, natural resources in one of the Contracting States;

(iv) any partnership interest, or any interest in settled property

deriving its value or the greater part of its value directly or

indirectly from interests in or over land in one of the

Contracting States or rights to exploit, or to explore for, natural

resources in one of the Contracting States; and

(v) any option, consent or embargo affecting the disposition of

interests in or over land in one of the Contracting States or

rights to exploit, or to explore for, natural resources in one of

the Contracting States; and

(c) real property shall be deemed to be situated—

(i) where it consists of interests in or over land—in the Contracting

State in which the land is situated;




(iii) where it consists of shares or comparable interests in a company

referred to in clause (iii) of subparagraph (b) of this paragraph,

a partnership interest or an interest in settled property referred

to in clause (iv) of the said subparagraph, or an option, consent

or embargo referred to in clause (v) of the said subparagraph—

in the Contracting State in which the land or natural resources

are wholly or principally situated or the exploration may take

place.

(3) Subject to the provisions of paragraph (1) of this Article, income or gains

from the alienation of capital assets of an enterprise of one of the Contracting

States or of capital assets available to a resident of one of the Contracting States

for the purpose of performing professional services or other independent

activities shall be taxable only in that State, but, where those assets form the

whole or part of the business property of a permanent establishment or fixed

base situated in the other Contracting State, such income or gains may be taxed


(4) Income or gains derived by an enterprise of one of the Contracting States

from the alienation of ships or aircraft operated in international traffic while

owned by that enterprise shall be taxable only in that State.





ARTICLE 15













ARTICLE 16








(2) Notwithstanding the provisions of paragraph (1) of this Article,

remuneration derived by an individual who is a resident of one of the

Contracting States in respect of an employment exercised in the other

Contracting State shall be taxable only in the first--mentioned State if—


exceeding in the aggregate 183 days in the year of income or year of

assessment, as the case may be, of that other State; and





other State.









ARTICLE 17

Directors’ Fees




other State.

ARTICLE 18

Entertainers


entertainers (such as theatrical, motion picture, radio or television artistes,







ARTICLE 19


(1) Pensions (including government pensions) and annuities paid to a resident

of one of the Contracting States shall be taxable only in that State.

(2) The term annuity means a stated sum payable periodically at stated times




(3) Any alimony or other maintenance payment arising in one of the

Contracting States and paid to a resident of the other Contracting State shall be

taxable only in the first--mentioned State.





ARTICLE 20

Government Service


Contracting States or a political subdivision or local authority of that State to








(2) The provisions of paragraph (1) of this Article shall not apply to

remuneration in respect of services rendered in connection with any trade or

business carried on by one of the Contracting States or a political subdivision or

local authority of that State. In such a case, the provisions of Article 16 or

Article 17, as the case may be, shall apply.

ARTICLE 21


(1) Remuneration which a professor or teacher who is a resident of one of the

Contracting States and who visits the other Contracting State for a period not

exceeding two years for the purpose of teaching or carrying out advanced study

or research at a university, college, school or other educational institution,

receives for those activities shall be taxable only in the first--mentioned State.

(2) This Article shall not apply to remuneration which a professor or teacher



ARTICLE 22

Students











ARTICLE 23





(2) However, if such income is derived by a resident of one of the Contracting

States from sources in the other Contracting State, such income may also be

taxed in the Contracting State in which it arises.

(3) The provisions of paragraph (1) of this Article shall not apply to income

derived by a resident of one of the Contracting States where that income is


the other Contracting State. In such a case, the provisions of Article 8 or Article


ARTICLE 24

Source of Income

(1) Income or gains derived by a resident of one of the Contracting States

which, under any one or more of Articles 7 to 9, 11 to 19 and Article 23 may be

taxed in the other Contracting State, shall for the purposes of the taxation law of

the other Contracting State be deemed to be income or gains from sources in the


(2) Income or gains derived by a resident of one of the Contracting States

which, under any one or more of Articles 7 to 9, 11 to 19 and Article 23 may be

taxed in the other Contracting State, shall for the purposes of Article 25 and of

the taxation law of the first--mentioned Contracting State be deemed to be

income or gains from sources in the other Contracting State.

ARTICLE 25


(1) (a) Subject to the provisions of the law of Australia from time to time in



general principle hereof), Irish tax paid under the law of Ireland and in

accordance with this Agreement, whether directly or by deduction, in

respect of income derived by a person who is a resident of Australia

from sources in Ireland (not including, in the case of a dividend, tax





paid in respect of the profits out of which the dividend is paid) shall be

allowed as a credit against Australian tax payable in respect of that

income;

(b) in the event that Australia should cease to allow a company which is

aresident of Australia a rebate in its assessment at the average rate of

tax payable by the company in respect of dividends derived from

sources in Ireland and included in the taxable income of the company,

the Governments of the Contracting States will enter into negotiations

in order to establish new provisions concerning the credit to be allowed

by Australia against its tax on the dividends.

(2) Subject to the provisions of the law of Ireland regarding the allowance as a

credit against Irish tax of tax payable in a territory outside Ireland (which shall

not affect the general principle hereof):

(a) Australian tax payable under the law of Australia and in accordance

with this Agreement, whether directly or by deduction, on profits,

income or chargeable gains from sources within Australia (excluding in

the case of a dividend, tax payable in respect of the profits out of which

the dividend is paid) shall be allowed as a credit against any Irish tax

computed by reference to the same profits, income or chargeable gains

by reference to which Australian tax is computed;

(b) in the case of a dividend paid by a company which is a resident of

Australia to a company which is a resident of Ireland and which

controls directly or indirectly 10 per cent or more of the voting power in

the company paying the dividend, the credit shall take into account (in

addition to any Australian tax creditable under the provisions of

subparagraph (a) of this paragraph) the Australian tax payable by the

company in respect of the profits out of which such dividend is paid.

ARTICLE 26









Agreement.








view to the avoidance of taxation not in accordance with this Agreement.

Notwithstanding any time limits in the national laws of the Contracting States,

the solution so reached may be implemented within a period of seven years

from the date of presentation of the case by the resident to the relevant

competent authority in accordance with paragraph (1) of this Article.


to resolve any difficulties or doubts arising as to the application of this

Agreement.



Agreement.

ARTICLE 27













such purposes.

(2) In no case shall the provisions of paragraph (1) of this Article be construed

so as to impose on a Contracting State the obligation—





State;








policy.

ARTICLE 28



consular officals under the general rules of international law or under the


ARTICLE 29

Entry into Force

This Agreement shall enter into force on the date on which the Government

of Australia and the Government of Ireland exchange notes through the



Ireland, as the case may be, and thereupon this Agreement shall have effect—

(a) in Australia—


non--resident, in relation to income derived on or after 1 July in

the calendar year immediately following that in which the

Agreement enters into force;




force;

(b) in Ireland—

(i) with respect to income tax and capital gains tax, for any year of



force;

(ii) with respect to corporation tax, for any financial year beginning

on or after 1 January in the calendar year immediately

following that in which the Agreement enters into force.





ARTICLE 30

Termination


Australia or the Government of Ireland may, on or before 30 June in any

calendar year beginning after the expiration of five years from the date of its

entry into force, give to the other Government through the diplomatic channel

written notice of termination and, in that event, this Agreement shall cease to be

effective—

(a) in Australia—


non--resident, in relation to income derived on or after 1 July in

the calendar year immediately following that in which the





given;

(b) in Ireland—

(i) with respect to income tax and capital gains tax, for any year of



given;

(ii) with respect to corporation tax, for any financial year beginning

on or after 1 January in the calendar year immediately

following that in which the notice of termination is given.


signed this Agreement and affixed thereto their seals.

DONE in duplicate at Canberra this thirty--first day of May One thousand

nine hundred and eighty--three in the English language.

J. S. DAWKINS JOSEPH SMALL


OF AUSTRALIA OF IRELAND

Schedule 21 Convention between Australia and the Republic of Italy for the Avoidance

of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on

Income



and the Republic of Italy for the




The Government of Australia and the Government of the Republic of Italy,




CHAPTER I


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered

(1) This Convention shall apply only to taxes on income imposed on behalf of

each Contracting State irrespective of the manner in which they are levied.





(b) in the case of Italy:

(i) the indvidual income tax (l’imposta sul reddito delle persone

fisiche);

Convention between Australia and the Republic of Italy for the Avoidance of Double


Schedule 21


(ii) the corporate income tax (l’imposta sul reddito delle persone

giuridiche);

even if they are collected by withholding taxes at the source.

(3) The Convention shall apply to any identical or substantially similar taxes

which are imposed after the date of signature of this Convention in addition to,

or in place of, the existing taxes. The competent authorities of the Contracting

States shall notify to each other any significant changes which have been made

in their laws relating to the taxes to which this Convention applies.

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

(1) In this Convention, unless the context otherwise requires—

(a) the term ‘Australia’ means the Commonwealth of Australia and, when









force a law of Australia or of a State or part of Australia or of a

Territory aforesaid dealing with the exploitation of any of the

natural resources of the sea--bed and subsoil of the continental

shelf;

(b) the term ‘Italy’ means the Republic of Italy and includes any area

beyond the territorial waters of Italy which, in accordance with the laws

of Italy concerning the exploration for and exploitation of natural

resources, may be designated as an area within which the rights of Italy

with respect to the sea--bed and subsoil and natural resources may be

exercised;

(c) the terms ‘Contracting State, one of the Contracting States’ and ‘other

Contracting State’ mean Australia or Italy, as the context requires;



Income


(d) the term ‘person’ comprises an individual, a company and any other

body of persons;



(f) the terms ‘enterprise of one of the Contracting States’ and ‘enterprise of

the other Contracting State’ mean an enterprise carried on by a resident

of Australia or an enterprise carried on by a resident of Italy, as the

context requires;

(g) the term ‘tax’ means Australian tax or Italian tax, as the context

requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to


(i) the term ‘Italian tax’ means tax imposed by Italy, being tax to which

this Convention applies by virtue of Article 2;



case of Italy, the Ministry of Finance.

(2) In this Convention, the terms ‘Australian tax’ and ‘Italian tax’ do not



2.

(3) In the application of this Convention by a Contracting State, any term not

otherwise defined shall, unless the context otherwise requires, have the meaning

which it has under the laws of that Contracting State relating to the taxes to


ARTICLE 4

Residence

(1) For the purposes of this Convention, a person is a resident of one of the




(b) in the case of Italy, if the person is a resident of Italy for the purposes of

Italian tax.

(2) In relation to income from sources in Italy, a person who is subject to




Schedule 21


as a resident of Australia unless the income from sources in Italy is subject to


solely because it is subject to Italian tax.














(4) Where by reason of the provisions of paragraph (1) a person other than an




ARTICLE 5


(1) For the purposes of this Convention, the term ‘permanent establishment’



(2) The term ‘permanent establishment’ shall include especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;







Income


(3) The term ‘permanent establishment’ shall not be deemed to include—









enterprise;






establishment if—











of that enterprise in the first--mentioned State if—





goods or merchandise belonging to the enterprise provided that this








Schedule 21








either company a permanent establishment of the other.

(8) The principles set forth in paragraphs (1) to (7) inclusive shall be applied in

determining for the purposes of this Convention whether there is a permanent

establishment outside both Contracting States, and whether an enterprise, not

being an enterprise of one of the Contracting States, has a permanent

establishment in one of the Contracting States.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6



such property is situated.

(2) The term ‘real property’ (beni immobili) shall have the meaning which it

has under the laws in force in the Contracting State in which the property in

question is situated. The term shall in any case include rights to royalties and

other payments in respect of the operation of mines or quarries or of the

exploitation of any natural resource and those rights shall be regarded as

situated where the land is situated. Ships, boats or aircraft shall not be regarded

as real property.



(4) Income from a lease of land and income from any other direct interest in or

over land, whether or not improved, shall be regarded as income from real

property situated where the land is situated.

(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the income


the performance of independent personal services.



Income


ARTICLE 7

Business Profits
























enterprise.




date of signature of this Convention is varied (otherwise than in minor respects



be appropriate.

(6) For the purposes of this Article, the profits of an enterprise do not include

items of income which are dealt with separately in other Articles of this

Convention and the provisions of those Articles shall not be affected by the

provisions of this Article.



Schedule 21


ARTICLE 8

Shipping and Aircraft

(1) Where profits are derived by a resident of one of the Contracting States

from the operation of ships and the place of the effective management of the

shipping enterprise is situated in that State, those profits shall be taxable only in

that State.


in the other Contracting State where they are profits from operations of ships

confined solely to places in that other State.


of the profits from the operation of ships derived by a resident of one of the

Contracting States through participation in a pool service, in a joint transport

operating organization or in an international operating agency.

(4) For the purpose of this Article, profits derived from the carriage by ships of

passengers, livestock, mail, goods or merchandise shipped in one of the

Contracting States for discharge at another place in that State shall be treated as

profits from operations of ships confined solely to places in that State.

(5) If the place of effective management of a shipping enterprise is aboard a

ship, then it shall be deemed to be situated in the Contracting State in which the

home harbour of the ship is situated, or, if there is no such home harbour, in the

Contracting State of which the operator of the ship is a resident.

(6) Nothing in this Convention shall affect the operation of the Agreement

between the Governments of the Contracting States for the avoidance of double

taxation of income derived from international air transport signed at Canberra

on 13 April 1972.

ARTICLE 9


Where—






Income












ARTICLE 10

Dividends








(3) The term ‘dividends’ in this Article means income from shares and other







therein or performs in that other State independent personal services from a



In such a case the dividends are taxable in that other Contracting State

according to its own law.








Schedule 21


that other State. Provided that this paragraph shall not apply in relation to


of Australian tax and which is also a resident of Italy for the purposes of Italian

tax.

ARTICLE 11

Interest



that other State.




(3) Notwithstanding the provisions of paragraph (2), interest derived by the

Government of one of the Contracting States or by a political or administrative

sub--division or a local authority thereof or by any other body exercising public

functions in, or in a part of, a Contracting State, or by a bank performing central

banking functions in a Contracting State, shall be exempt from tax in the other

Contracting State.






income arises.







with such permanent establishment or fixed base. In such a case, the interest is

taxable in that other Contracting State according to its own law.

(6) Interest shall be deemed to arise in one of the Contracting States when the

payer is that State itself or a political or administrative subdivision of that State

or a local authority of that State or a person who is a resident of that State for

the purposes of its tax. Where, however, the person paying the interest, whether



Income


he is a resident of one of the Contracting States or not, has in one of the

Contracting States or outside both Contracting States a permanent establishment



or fixed base then such interest shall be deemed to arise in the State in which

the permanent establishment or fixed base is situated.









State, due regard being had to the other provisions of this Convention.

ARTICLE 12

Royalties



that other State.




(3) The term ‘royalties’ in this Article means payments, whether periodical or

not, and however described or computed, to the extent to which they are paid as

consideration for the use of, or the right to use, any copyright, patent, design or

model, plan, secret formula or process, trade--mark, or other like property or



the supply of any assistance of an ancillary and subsidiary nature furnished as a






broadcasting.



Schedule 21







the right or property in respect of which the royalties are paid is effectively

connected with such permanent establishment or fixed base. In such a case, the

royalties are taxable in that other Contracting State according to its own law.

(5) Royalties shall be deemed to arise in one of the Contracting States when

the payer is that Contracting State itself or a political or administrative

sub--division of that State or a local authority of that State or a person who is a

resident of that State for purposes of its tax. Where, however, the person paying

the royalties, whether he is a resident of one of the Contracting States or not,

has in one of the Contracting States or outside both Contracting States a

permanent establishment or fixed base in connection with which the liability to

pay the royalties was incurred, and the royalties are borne by the permanent

establishment or fixed base, then the royalties shall be deemed to arise in the

State in which the permanent establishment or fixed base is situated.



person the amount of the royalties paid, having regard to what they are paid for,

exceeds the amount which might have been expected to have been agreed upon

by the payer and the person so entitled in the absence of such relationship, the


case, the excess part of the amount of the royalties paid shall remain taxable

according to the law of each Contracting State, due regard being had to the


ARTICLE 13





(a) the term ‘real property’ shall include —





Income


(iii) shares or comparable interest in a company, the assets of which

consist wholly or principally of direct interests in or over land

in one of the Contracting States or of rights to exploit, or to

explore for, natural resources in one of the Contracting States.













(3) Gains from the alienation of shares or corporate rights in a company which

is a resident of Italy for the purposes of Italian tax, derived by an individual

who is a resident of Australia, may be taxed in Italy.

ARTICLE 14









(2) The term ‘professional services’ includes especially services performed in

the exercise of independent scientific, literary, artistic, educational or teaching





Schedule 21


ARTICLE 15


(1) Subject to the provisions of Articles 16, 18, 19 and 20 salaries, wages and









first--mentioned State if—



year as the case may be, of that other State; and





other State.

(3) Notwithstanding the preceding provisions of this Article remuneration

derived by a resident of one of the Contracting States in respect of an

employment exercised aboard a ship or aircraft in international traffic shall be


ARTICLE 16

Directors’ Fees




other State.



Income


ARTICLE 17

Entertainers









ARTICLE 18




(2) The term ‘annuity’ means a stated sum payable periodically at stated times




(3) Any alimony or other maintenance payment arising in a Contracting State

and paid to a resident of the other Contracting State, shall be taxable only in the


ARTICLE 19

Government Service


Contracting States or by a political or administrative sub--division of that State

or by a local authority of that State to any individual in respect of services

rendered to that State or sub--division or authority shall be taxable only in that

State. However, such remuneration shall be taxable only in the other

Contracting State if the services are rendered in that State and the recipient is a

resident of that State who:






Schedule 21




of the Contracting States or by a political or administrative sub--division of one

of the States or by a local authority of one of the States. In such a case the

provisions of Articles 15 and 16 shall apply.

ARTICLE 20


A professor or teacher who visits one of the Contracting States for a period

not exceeding two years for the purpose of teaching or carrying out advanced

study or research at a university, college, school or other educational institution

in that State and who immediately before that visit was a resident of the other

Contracting State shall be exempt from tax in the first--mentioned State on any

remuneration for such teaching, advanced study or research in respect of which

he is, or upon the application of this Article will be, subject to tax in the other

State.

ARTICLE 21

Students







ARTICLE 22





Convention to be a resident solely of one of the Contracting States, derives





Income


ARTICLE 23

Source of Income



Contracting State, shall for the purposes of Article 24, and of the income tax


CHAPTER IV


ARTICLE 24




Italian tax paid, whether directly or by deduction, in respect of income derived

by a person who is a resident of Australia from sources in Italy shall be allowed

as a credit against Australian tax payable in respect of that income.

(2) If a resident of Italy owns items of income which are taxable in Australia,

Italy in determining its income taxes specified in Article 2 of this Convention,

may include in the basis upon which such taxes are imposed the said items of

income, unless specific provisions of this Convention otherwise provide. In

such a case, Italy shall deduct from the taxes so calculated the Australian tax on

income, but in an amount not exceeding that proportion of the aforesaid Italian

tax which such items of income bear to the entire income. On the contrary no

deduction will be granted if the item of income is subjected in Italy to a final

withholding tax by request of the recipient of the said income in accordance

with the Italian law.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 25



of one or both of the Contracting States result or will result for him in taxation

not in accordance with this Convention, he may, notwithstanding the remedies




Schedule 21


authority of the Contracting State of which he is a resident. This case must be

presented within two years from the first notification of the action.

(2) The competent authority shall endeavour, if the taxpayer’s claim appears to

it to be justified and if it is not itself able to arrive at an appropriate solution, to

resolve the case with the competent authority of the other Contracting State,

with a view to the avoidance of taxation not in accordance with this

Convention.

(3) The competent authorities of the Contracting States shall endeavour to

resolve any difficulties or doubts arising as to the application of this

Convention.



Convention.

ARTICLE 26



information as is necessary for the carrying out of this Convention or of the

domestic laws of the Contracting States concerning taxes to which this

Convention applies insofar as the taxation thereunder is not contrary to this

Convention, or for the prevention of fiscal evasion in relation to such taxes. The

exchange of information is not restricted by Article 1. Any information received

by a Contracting State shall be treated as secret in the same manner as

information obtained under the domestic laws of that State and shall be

disclosed only to persons or authorities (including courts and administrative

bodies) involved in the assessment or collection of, the enforcement or

prosecution in respect of, or the determination of appeals in relation to, the taxes

to which this Convention applies. Such persons or authorities shall use the

information only for such purposes.


impose on one of the Contracting States the obligation—

(a) to carry out administrative measures at variance with the laws and




State;



Income




supply information, the disclosure of which would be contrary to public

policy (ordre public).

ARTICLE 27


Nothing in this Convention shall affect the fiscal privileges of diplomatic or



ARTICLE 28

Refunds

(1) Taxes withheld at the source in one of the Contracting States will be

refunded by request of the taxpayer or of the State of which he is a resident if

the right to collect the said taxes is affected by the provisions of this

Convention.

(2) Claims for refund, that shall be produced within the time limit fixed by the

law of the Contracting State which is obliged to carry out the refund, shall be

accompanied by an official certificate of the Contracting State of which the

taxpayer is a resident certifying the existence of the conditions required for

being entitled to the application of the allowances provided for by this

Convention.

(3) The competent authorities of the Contracting States shall settle the mode of

application of this Article, in accordance with the provisions of Article 25 of

this Convention.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 29

Entry Into Force

(1) This Convention shall be ratified and the instruments of ratification shall

be exchanged at Rome as soon as possible.

(2) The Convention shall enter into force on the date of the exchange of

instruments of ratification and its provisions shall have effect—



Schedule 21


(a) in Australia—



1976;



(b) In Italy—

in respect of income assessable for taxable periods beginning on or

after 1 July 1976.

(3) Claims for refund or credits arising in accordance with this Convention in

respect of any tax payable by residents of either of the Contracting States in

respect of income which is subject to tax and to which this Convention applies

in accordance with paragraph (2) of this Article and which was derived before

the entry into force of this Convention, shall be lodged within three years from

the date of entry into force of this Convention or from the date the tax was

charged whichever is later.

ARTICLE 30

Termination

This Convention shall remain in force until terminated by one of the

Contracting States. Either Contracting State may terminate the Convention,

through the diplomatic channel, not earlier than five years after its entry into

force by giving notice of termination at least six months before the end of the

calendar year. In such event, the Convention shall cease to be effective—

(a) in Australia—








(b) in Italy—

in respect of income assessable for taxable periods beginning on or

after 1 July in the calendar year next following that in which the

notice of termination is given.



Income



signed the present Convention.

Done in duplicate at Canberra the fourteenth day of December 1982 in the


JOHN HOWARD SERGIO ANGELETTI

For the Government For the Government of the

of Australia Republic of Italy

PROTOCOL

The Government of Australia and

The Government of the Republic of Italy,

at the signing of the Convention between the two Governments for the


to taxes on income, have agreed upon the following provisions which shall form

an integral part of the Convention:

It is understood that:

(1) With reference to Articles 7 and 9—

If the information available to the competent authority of one of

the Contracting States is inadequate to determine the profits of an

enterprise on which tax may be imposed in that State in accordance

with Article 7 or Article 9 of the Convention, nothing in those

Articles shall prevent the application of any law of that State

relating to the determination of the tax liability of a person

provided that that law shall be applied, so far as the information

available to the competent authority permits, in accordance with

the principles applicable under Articles 7 and 9.

(2) With reference to paragraph (6) of Article 8—

The Italian taxes to which the Agreement therein referred to shall

apply, with effect from the date of their entry into force, are the

following—

(i) the individual income tax (l’imposta sul reddito delle persone

fisiche);

(ii) the corporate income tax (l’imposta sul reddito delle persone

giuridiche);

(iii) the local income tax (l’imposta locale sui redditi).



Schedule 21


If, in Australia, a tax (not being Australian tax referred to in Article

1 of the said Agreement) is imposed on profits derived by an

enterprise of Italy from the operation of aircraft in international

traffic, the taxes to which the Agreement shall apply in Italy shall

thereupon cease to include the local income tax (l’imposta locale

sui redditi).

(3) With reference to Article 9—

Notwithstanding the provisions of Article 9, an enterprise of one of

the Contracting States may be taxed by that Contracting State as if

that Article had not come into effect but, so far as it is practicable

to do so, in accordance with the principles applicable under that

Article.


The term ‘payments’ includes credits or any amount credited and a

reference to royalties paid includes royalties credited. The term

‘royalties’ includes payments or credits for total or partial

forbearance in respect of the use of a property or right referred to

in paragraph (3).


The tax paid in respect of income by way of dividend in one of the

Contracting States that is to be allowed as a credit against tax

payable in respect of that income in the other Contracting State

shall not include tax paid in respect of the profits out of which the

dividend is paid.

(6) With reference to paragraph (1) of Article 25—

The expression ‘notwithstanding the remedies provided by the

national laws’ means that the mutual agreement procedure is not

alternative to the national contentious proceedings which shall be,

in any case, preventively initiated, when the claim is related to an

assessment of Italian tax not in accordance with this Convention.


The provisions of paragraph (3) shall not prevent the Contracting

States from carrying out other practices for the allowance of the

taxation reductions provided for in this Convention.

(8) If, in a Convention for the avoidance of double taxation that is

subsequently made between Australia and a third State being a State that at the



Income


date of signature of this Protocol is a member of the Organisation for Economic

Co--operation and Development, Australia shall agree to limit the rate of its

taxation

(i) on dividends paid by a company which is a resident of

Australia for the purposes of Australian tax to which a

company that is a resident of the third State is entitled, to a

rate less than that provided in paragraph (2) of Article 10; or

(ii) on interest arising in Australia to which a resident of the third


paragraph (2) of Article 11; or

(iii) on royalties arising in Australia to which a resident of the

third State is entitled, to a rate less than that provided in

paragraph (2) of Article 12, the Government of Australia shall

immediately inform the Government of the Republic of Italy

in writing through the diplomatic channel and shall enter into

negotiations with the Government of the Republic of Italy to

review the provisions in sub--paragraphs (i), (ii) and (iii)

above in order to provide the same treatment for Italy as that

provided for the third State.

Done in duplicate at Canberra the fourteenth day of December 1982 in the


JOHN HOWARD SERGIO ANGELETTI

For the Government

of Australia

For the Government of the

Republic of Italy

Convention between the Government of Australia and the Government of the Republic

of Korea for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion



Schedule 22—Convention between the


Government of the Republic of Korea


and the Prevention of Fiscal Evasion

with respect to Taxes on Income Section 3

The Government of Australia and the Government of the Republic of Korea




CHAPTER I


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered


(a) in Korea:

(i) the income tax;


(iii) the inhabitant tax;


the Republic of Korea for the Avoidance of Double Taxation and the Prevention of



(b) in Australia:


undistributed amount of the distributable income of a private company.

(2) This Convention shall also apply to any identical or substantially similar


of this Convention in addition to, or in place of, the existing taxes. At the end of



changes which have been made in the laws of either State relating to the taxes to


CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

(1) For the purposes of this Convention, unless the context otherwise

requires—














(b) the term ‘Korea’ means the Republic of Korea and, when used in a

geographical sense, it includes any area adjacent to the territorial sea of

the Republic of Korea which, in accordance with international law, has

been or may hereafter be designated under the laws of the Republic of

Korea as an area within which the sovereign rights of the Republic of





Korea with respect to the sea--bed and subsoil and their natural

resources may be exercised;

(c) the terms ‘a Contracting State’ and ‘the other Contracting State’ mean

Australia or Korea, as the context requires;

(d) the term ‘person’ means an individual, a company and any other body

of persons;



(f) the terms ‘enterprise of a Contracting State’ and ‘enterprise of the other

Contracting State’ mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident


(g) the term ‘tax’ means Australian tax or Korea tax, as the context

requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to


(i) the term ‘Korean tax’ means tax imposed by Korea, being tax to which

this Convention applies by virtue of Article 2;



case of Korea, the Minister of Finance or his authorized representative;

and

(k) the term ‘international traffic’, in relation to the operation of ships or

aircraft by a resident of a Contracting State, means operations of ships

or aircraft other than operations of ships or aircraft which are confined

solely to places in the other Contracting State, and for this purpose the

carriage of passengers, livestock, mail, goods or merchandise shipped in

a Contracting State for discharge at another place in that State shall be

treated as operations confined solely to places in that State.

(2) In this Convention, the terms ‘Australian tax’ and ‘Korean tax’ do not



2.

(3) In the application of this Convention by a Contracting State, any term not

defined in this Convention shall, unless the context otherwise requires, have the


taxes to which this Convention applies.





ARTICLE 4

Residence

(1) For the purposes of this Convention, a person is, subject to paragraph (2), a

resident of a Contracting State—

(a) in the case of Australia, if the person is a resident of Australia for the

purposes of Australian tax; and

(b) in the case of Korea, if the person is a resident of Korea for the

purposes of Korean tax.

(2) A person is not a resident of a Contracting State for the purposes of this

Convention if he is liable to tax in that State in respect only of income from

sources in that State.










For purposes of this paragraph in determining the Contracting State with which

an individual’s personal and economic relations are the closer, regard shall be

given to his citizenship or nationality (if he is a citizen or national of a

Contracting State).

(4) Where by reason of the provisions of paragraphs (1) and (2) a person other

than an individual is a resident of both Contracting States, then it shall be



ARTICLE 5


(1) For the purposes of this Convention, the term ‘permanent establishment’







(2) The term ‘permanent establishment’ includes especially—


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;


natural resources;

(g) land used for agricultural, pastoral or forestry purposes.

(3) A building site or a construction, installation or assembly project

constitutes a permanent establishment only if it exists for more than six months.


merely by reason of one or more of the following—








purchasing goods or merchandise, or of collecting information, for the

enterprise;




(5) An enterprise shall be deemed to have a permanent establishment in a


establishment if:

(a) it carries on supervisory activities in that State for more than six months

in connection with a building site, or a construction, installation or

assembly project which is being undertaken in that State; or









(6) A person acting in a Contracting State on behalf of an enterprise of the

other Contracting State—other than an agent of an independent status to whom


enterprise in the first--mentioned State if—


contracts binding the enterprise, unless his activities are limited to the

purchase of goods or merchandise for the enterprise; or





(7) An enterprise shall not be deemed to have a permanent establishment in a

Contracting State merely because it carries on business in that Contracting State

through a broker, general commission agent or any other agent of an

independent status, where that person is acting in the ordinary course of his

business as such a broker or agent.

(8) The fact that a company which is a resident of a Contracting State controls

or is controlled by a company which is a resident of the other Contracting State,

or which carries on business in that other State (whether through a permanent

establishment or otherwise), shall not of itself constitute either company a

permanent establishment of the other.

(9) The principles set forth in paragraphs (1) to (8) inclusive shall also be


paragraph (5) of Article 12 of this Convention whether an enterprise of a

Contracting State has a permanent establishment outside both Contracting

States, and whether an enterprise, not being an enterprise of either Contracting

State, has a permanent establishment in a Contracting State.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6


(1) Income derived by a resident of a Contracting State from land (including

any building or other construction) situated in the other Contracting State may

be taxed in the other State.





(2) The term ‘land’ shall have the meaning which it has under the law of the

Contracting State in which the land in question is situated and it shall include

any lease of such land and any estate or direct interest in or over such land

whether improved or not. A right to receive variable or fixed payments as

consideration for the working of, or the right to work, mineral deposits, oil or

gas wells, quarries or other places of extraction or exploitation of natural

resources shall be deemed to be an estate or direct interest in land situated in the

Contracting State in which the mineral deposits, oil or gas wells, quarries or

natural resources are situated.

(3) The provisions of paragraph (1) shall also apply to the income from land of

an enterprise and to income from land used for the performance of professional

services.

ARTICLE 7

Business Profits

(1) The profits of an enterprise of a Contracting State shall be taxable only in


through a permanent establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be taxed in the other

State but only so much of them as is attributable to that permanent

establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise of a






wholly indepenently with the enterprise of which it is a permanent

establishment.














enterprise.

(5) Where the correct amount of profits attributable to a permanent

establishment is incapable of determination or the ascertaining thereof presents

exceptional difficulties, nothing in this Article shall affect the application of any

law of that State relating to the determination of the tax liability of a person




other Articles of this Convention, then the provisions of those Articles shall not


ARTICLE 8

Ships and Aircraft

(1) Profits of a resident of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State.

(2) The provisions of paragraph (1) shall also apply to profits derived from

participation in a pool, a joint business or an international operating agency.

ARTICLE 9


(1) Where a person subject to the taxing jurisdiction of a Contracting State and

any other person are related and where conditions are operative between such

related persons in their commercial or financial relations which are different

from those which might be expected to operate if such persons were unrelated

persons dealing wholly independently with one another, then any profits which,

but for those conditions, might have been expected to accrue to one of those

persons, but by reason of those conditions, have not so accrued, may be

included in the profits of that person and taxed accordingly.

(2) A person is related to another person for purposes of this Convention if

either person participates directly or indirectly in the management, control, or

capital of the other, or if any third person or persons participates or participate

directly or indirectly in the management, control, or capital of both.

(3) This Article shall apply only where both Contracting States have a tax

interest.





(4) Notwithstanding the provisions of this Article, an enterprise of a

Contracting State may be taxed by that State as if this Article had not come into

effect but, so far as it is practicable to do so, in accordance with the principles

of this Article.

(5) Where profits on which an enterprise of a Contracting State has been

charged to tax in that State are also included, by virtue of paragraph (1) or (4),

in the profits of an enterprise of the other Contracting State and taxed








had to the other provisions of this Convention in relation to the nature of the

income, and for this purpose the competent authorities of the Contracting States

shall if necessary consult each other.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of a Contracting State,

being dividends to which a resident of the other Contracting State is beneficially

entitled, may be taxed in that other State.


company paying the dividends is a resident, and according to the law of that

State, but the tax so charged shall not exceed 15 per cent of the gross amount of

the dividends.


income which is subjected to the same taxation treatment as income from shares

by the laws of the Contracting State of which the company making the

distribution is a resident.


beneficially entitled to the dividends, being a resident of a Contracting State,


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 any

such case the provisions of Article 7 or Article 14, as the case may be, shall

apply.

(5) Dividends paid by a company which is a resident of a Contracting State,

being dividends to which a person who is not a resident of the other Contracting

State is beneficially entitled, shall be exempt from tax in that other State except

insofar as the holding in respect of which the dividends are paid is effectively

connected with a permanent establishment or fixed base situated in that other

State. Provided that this paragraph shall not apply in relation to dividends paid

by any company which by reason of paragraph (1) of Article 4 is a resident of

Australia and which by reason of that paragraph is also a resident of Korea.

(6) Nothing in this Convention shall be construed as preventing a Contracting


other Contracting State, tax in addition to the taxes referred to in Article 2 in

relation to the first--mentioned Contracting State which are payable by a

company which is a resident of the first--mentioned State, provided that any

such additional tax shall not exceed 15 per cent of the amount by which the

taxable income of the first--mentioned company of a year of income exceeds the

tax payable on that taxable income to the first--mentioned State. Any tax

payable to a Contracting State on the undistributed profits of a company which

is a resident of the other Contracting State shall be calculated as if that company

were not liable to the additional tax referred to in this paragraph and had paid

dividends of such amount that tax equal to the amount of that additional tax

would have been payable on the dividends in accordance with paragraph (2) of

this Article.

ARTICLE 11

Interest

(1) Interest arising in a Contracting State, being interest to which a resident of

the other Contracting State is beneficially entitled, may be taxed in that other

State.




(3) Interest derived by the Government of a Contracting State or by any other

body exercising governmental functions in or in a part of a Contracting State, or





by a bank performing central banking functions in a Contracting State, shall be

exempt from tax in the other Contracting State.






income arises.


beneficially entitled to the interest, being a resident of a Contracting State,

carries on business in the other Contracting State, in which the interest arises,

through a permanent establishment situated therein, or performs in that other

State independent personal services from a fixed base situated therein, and the

indebtedness in respect of which the interest is paid is effectively connected




that State itself or a political or administrative subdivision of that State or a

local authority of that State or a person who, by reason of paragraph (1) of

Article 4 is a resident of that State. Where, however, the person paying the

interest, whether he is a resident of a Contracting State or not, has in a




or fixed base, then such interest shall be deemed to arise in the State in which

the permanent establishment or fixed base is situated.





been agreed upon by the taxpayer and the person so entitled in the absence of









ARTICLE 12

Royalties

(1) Royalties arising in a Contracting State, being royalties to which a resident

of the other Contracting State is beneficially entitled, may be taxed in that other

State.




(3) The term ‘royalties’ in this Article means payments or credits, whether





right;


equipment;


or information;










(f) total or partial forberance in respect of the use of a property or right



beneficially entitled to the royalties, being a resident of a Contracting State,

carries on business in the other Contracting State, in which the royalties arise,

through a permanent establishment situated therein, or performs in that other

State independent personal services from a fixed base situated therein, and the

right or property in respect of which the royalties are paid is effectively





connected with such permanent establishment or fixed base. In such a case, the



that State itself or a political or administrative subdivision of that State or a

local authority of that State or a person who, by reason of paragraph (1) of

Article 4, is a resident of that State. Where, however, the person paying the

royalties, whether he is a resident of a Contracting State or not, has in a


or fixed base in connection with which the liability to pay the royalties was

incurred, and the royalties are borne by the permanent establishment or fixed

base, then the royalties shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.



person, the amount of the royalties paid, having regard to what they are paid for,

exceeds the amount which might have been expected to have been agreed upon

by the payer and the person so entitled in the absence of such relationship, the


case, the excess part of the amount of the royalties paid shall remain taxable

according to the law of each Contracting State, but subject to the other

provisions of this Convention.

ARTICLE 13





(a) the term ‘real property’ shall include:



(iii) shares or comparable interests in a company, the assets of which

consist wholly or principally of direct interests in or over land in

a Contracting State or of rights to exploit, or to explore for,

natural resources in a Contracting State;











(iii) where it consists of shares or comparable interests in a company,

the assets of which consist wholly or principally of direct

interests in or over land in a Contracting State or of rights to

exploit, or to explore for, natural resources in a Contracting

State—in the Contracting State in which the assets or the

principal assets of the company are situated.

(3) Income derived by an enterprise of a Contracting State from the alienation

of ships or aircraft operated in international traffic while owned by that

enterprise or of personal property pertaining to the operation of those ships or

aircraft shall be taxable only in that State.

ARTICLE 14


(1) Income derived by an individual who is a resident of a Contracting State in



available to him in the other Contracting State for the purpose of performing his

activities. If he has such a fixed base, the income may be taxed in the other

State but only so much of it as is attributable to activities exercised from that

fixed base.

(2) The term ‘professional services’ includes services performed in the




ARTICLE 15













an individual who is a resident of a Contracting State in respect of an


first--mentioned State if—



State; and





other State.



international traffic by a resident of a Contracting State may be taxed in that

Contracting State.

ARTICLE 16

Directors’ Fees

Directors’ fees and other similar payments derived by a resident of a

Contracting State in his capacity as a member of the board of directors of a



ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 and 15, income derived by a

resident of a Contracting State as an entertainer (such as a theatre, motion

picture, radio or television artiste, or a musician, or an athlete) from his personal

activities as such exercised in the other Contracting State, may be taxed in that

other State.

(2) Where income in respect of personal activities exercised by an entertainer

in his capacity as such accrues not to the entertainer himself but to another

person, that income may, notwithstanding the provisions of Articles 7, 14 and

15, be taxed in the Contracting State in which the activities of the entertainer are

exercised.





(3) Notwithstanding the provisions of paragraph (1), income derived by an

entertainer from his personal activities as such in a Contracting State shall be

taxable only in the other Contracting State if his visit to the first--mentioned

State is supported substantially from the public funds of that other State or of

one of its political subdivisions or local authorities.

(4) Notwithstanding the provisions of paragraph (2), where income in respect

of personal activities as such of an entertainer in a Contracting State accrues not

to that entertainer himself but to another person, that income shall be taxable

only in the other Contracting State if that person is supported substantially from

the public funds of that other State or of one of its political subdivisions or local

authorities, or if that person is a non--profit organisation of that other State.

ARTICLE 18


(1) Subject to the provisions of paragraph (2) of Article 19, any pension or any

annuity paid to a resident of a Contracting State shall be taxable only in that

State.





ARTICLE 19

Government Service

(1) (a) Remuneration, other than a pension or annuity, paid by a Contracting

State or a political subdivision or local authority of that Contracting

State to an individual in respect of services rendered to that State or

subdivision or authority shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other

Contracting State if the services are rendered in that State and the

individual is a resident of that State who—

(i) is a national or citizen of that State; or

(ii) did not become a resident of that State solely for the purpose of


(2) (a) Any pension paid by, or out of funds created by, a Contracting State or

a political subdivision or local authority of that Contracting State to an





individual in respect of services rendered to that State or subdivision or

authority shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting

State if the individual is a resident of, and a national or citizen of, that

Contracting State.

(3) The provisions of Articles 15, 16 and 18 shall apply to remuneration and

pensions in respect of services rendered in connection with a business carried

on by a Contracting State or a political subdivision or local authority of that

Contracting State.

(4) The provisions of paragraphs (1) and (2) of this Article shall likewise apply

in respect of remuneration or pensions paid, in the case of Korea, by the Bank

of Korea, the Export--Import Bank of Korea, and the Korea Trade Promotion

Corporation and, in the case of Australia, by the Reserve Bank of Australia.

ARTICLE 20


An individual who is a resident of a Contracting State and who, at the

invitation of any university, college, school or other recognised educational

institution, visits the other Contracting State for a period not exceeding two

years solely for the purpose of teaching or research or both at such educational

institution shall be taxable only in the first--mentioned State on his

remuneration for such teaching or research.

ARTICLE 21

Students and Trainees

Where a student or trainee, who is a resident of a Contracting State or who

was a resident of that Contracting State immediately before visiting the other

Contracting State and who is temporarily present in the other Contracting State

solely for the purpose of his education or training, receives payments from

sources outside the other Contracting State for the purpose of his maintenance

or education, those payments shall be exempt from tax in the other Contracting

State.





ARTICLE 22


(1) Items of income of a resident of a Contracting State which are not

expressly mentioned in the foregoing Articles of this Convention shall be


(2) However, if such income is derived by a resident of a Contracting State

from sources in the other Contracting State, such income may also be taxed in

the Contracting State in which it arises.


resident of a Contracting State where that income is effectively connected with

a permanent establishment or fixed base situated in the other Contracting State.


shall apply.

ARTICLE 23

Source of Income

Income derived by a resident of a Contracting State which, under any one or

more of Articles 6 to 8 and 10 to 17 may be taxed in the other Contracting State,

shall, for the purposes of Article 24 and of the income tax law of that other

State, be deemed to be income from sources in that other State.

CHAPTER IV


ARTICLE 24




Korean tax paid under the law of Korea and in accordance with this

Convention, whether directly or by deduction, in respect of income derived by a

person who is a resident of Australia from sources in Korea shall be allowed as

a credit against Australian tax payable on the income on which the Korean tax

was paid. However, where the income is a dividend paid by a company which is

a resident of Korea, the credit shall only take into account such tax in respect

thereof as is additional to any tax payable by the company on the profits out of

which the dividend is paid.





(2) In the case of a resident of Korea, double taxation shall be avoided in

accordance with this paragraph. Subject to the provisions of Korean tax law

regarding the allowance as a credit against Korean tax of tax payable in any

country other than Korea (which shall not affect the general principle hereof)

Australian tax payable (excluding in the case of a dividend tax payable in

respect of the profits out of which the dividends are paid) under the laws of

Australia and in accordance with this Convention, whether directly or by

deduction, in respect of income from sources within Australia shall be allowed

as a credit against Korean tax payable in respect of that income. The credit shall

not, however, exceed that proportion of Korean tax which the income from

sources within Australia bears to the entire income subject to Korean tax.

(3) (a) For the purposes of paragraph (4), the term ‘Korean tax forgone’

means—

(i) in the case of interest derived by a resident of Australia which is

exempted from Korean tax in accordance with the relevant

legislation, the amount which, under the law of Korea and in

accordance with this Convention, would have been payable as

Korean tax if the interest had not been so exempt and if the tax

referred to in paragraph (2) of Article 11 were not to exceed 10

per cent of the gross amount of the interest; and

(ii) in the case of royalties derived by a resident of Australia which

are exempted either wholly or partly from Korean tax in

accordance with the relevant legislation, the amount or, where the

royalties are partly exempt, the additional amount which, under

the law of Korea and in accordance with this Convention, would

have been payable as Korean tax if the royalties had not been so

wholly or partly exempt, and if the tax referred to in

paragraph (2) of Article 12 were not to exceed 10 per cent of the

gross amount of the royalties.

(b) In sub--paragraph (a), the term ‘the relevant legislation’ means those

provisions of the laws of Korea relating to Korean tax which are agreed

in letters exchanged from time to time between the Minister of Finance

of Korea and the Treasurer of Australia for the purposes of this

paragraph.

(4) (a) For the purposes of paragraph (1), an amount of Korean tax forgone

shall be deemed to be an equivalent amount of Korean tax paid;





(b) For the purposes of the income tax law of Australia—

(i) an amount of interest referred to in sub--paragraph (3) (a) (i) shall

be deemed to be increased by the amount of Korean tax forgone

in respect of that interest; and

(ii) an amount of royalties referred to in sub--paragraph (3) (a) (ii)

shall be deemed to be increased by the amount of Korean tax

forgone in respect of those royalties.

(5) Paragraphs (3) and (4) shall not apply in relation to income derived in any

year of income after the year of income that ends on 30 June in the calendar

year fifth following the calendar year in which this Convention is signed or any

later date that may be agreed by the Governments of the Contracting States in

letters exchanged for this purpose.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 25


(1) Where a person considers that the actions of one or both of the Contracting

States result or will result for him in taxation not in accordance with the

provisions of this Convention, he may, notwithstanding the remedies provided

by the domestic law of those States, present his case to the competent authority

of the Contracting State of which he is a resident. The case must be presented

within three years from the first notification of the action resulting in taxation

not in accordance with the provisions of this Convention.

(2) The competent authority shall endeavour, if the objection appears to it to

be justified and if it is not itself able to arrive at an appropriate solution, to



accordance with the Convention. Any solution reached shall be implemented

notwithstanding any time limits in the domestic laws of the Contracting States.

(3) The competent authorities of the Contracting States shall seek to resolve by

agreement any difficulties or doubts arising as to the application or

interpretation of this Convention. In particular the competent authorities of the

Contracting States shall seek to agree as to with which of the Contracting States

an individual described in sub--paragraph (3) (b) of Article 4 has closer





personal and economic relations or in which of the Contracting States the place

of effective management of a person other than an individual described in

paragraph (4) of that Article is situated.



Convention.

ARTICLE 26



information as is necessary for carrying out the provisions of this Convention or

of the domestic laws of the Contracting States concerning the taxes to which

this Convention applies insofar as the taxation thereunder is not contrary to this

Convention. The exchange of information is not restricted by Article 1. Any






relation to the taxes to which this Convention applies and shall be used only for

such purposes.



(a) to carry out administrative measures at variance with the laws and


(b) to supply information which is not obtainable under the laws or in the


State;



supply information, the disclosure of which would be contrary to public

policy.





ARTICLE 27

Diplomatic Agents and Consular Officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic

agents or consular officers under the general rules of international law or under

the provisions of special agreements.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 28

Entry Into Force

(1) Each Contracting State shall notify the other by note through the

diplomatic channel of the completion of the procedure required by its law for

the bringing into force of this Convention. This Convention shall enter into

force on the first day of the month second following the month in which the

later of these notifications is given.

(2) This Convention shall have effect:

(a) in Australia—


non--resident, in relation to income derived on or after 1 January

in the calendar year in which this Convention is signed; and



in which this Convention is signed;

(b) in Korea—

(i) in respect of tax withheld at source on amounts paid or credited

to a non--resident, in relation to income derived on or after

1 January in the calendar year in which this Convention is signed;

and

(ii) in respect of other Korean tax, in relation to income of any year

of income beginning on or after 1 January in the calendar year in

which this Convention is signed.





ARTICLE 29

Termination

This Convention shall remain in force indefinitely, but the Government of

Australia or the Government of Korea may on or before 30 June in any calendar

year after the expiration of 5 years from the date of its entry into force give to

the other Government through the diplomatic channel written notice of

termination and, in that event, this Convention shall cease to be effective:

(a) in Australia—




termination is given; and



next following that in which the notice is given;

(b) in Korea—

(i) in respect of tax withheld at source on amounts paid or credited

to a non--resident, in relation to income derived on or after


notice of termination is given; and

(ii) in respect of other Korean tax, in relation to income of any year

of income beginning on or after 1 January in the calendar year




Done in duplicate at Canberra this twelfth day of July of the year one

thousand nine hundred and eighty--two in the English and Korean languages,

both texts being equally authoritative.

For the Government of For the Government of

Australia: the Republic of Korea:

JOHN HOWARD HA JONG YOON





PROTOCOL

THE GOVERNMENT OF AUSTRALIA AND

THE GOVERNMENT OF THE REPUBLIC OF KOREA

HAVE AGREED AT THE SIGNING of the Convention between the two

Governments for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income upon the following provisions which

shall form an integral part of the said Convention.


the Convention shall also apply to the Korean defence tax where

charged by reference to the income tax or the corporation tax.


the Convention shall not apply to profits of an enterprise from carrying

on a business of any form of insurance, other than life insurance.

(3) With reference to paragraph (6) of Article 10,

the Governments of the Contracting States acknowledge that the

additional tax referred to in that paragraph applicable at the time at which

the Convention is signed is, in the case of Australia, only a tax of 5 per cent

levied on the reduced taxable income of a company which is not a resident

of Australia, in accordance with Section 128T of the Income Tax

Assessment Act 1936.


the Governments of the Contracting States acknowledge that a company

which is a resident of Australia is, in accordance with the provisions of the

taxation law of Australia in force at the date of signature of the

Convention, entitled to a rebate in its assessment at the average rate of tax

payable by the company in respect of dividends that are included in its

taxable income and are received from a company which is a resident of

Korea. In the event that Australia should cease to allow a company which

is a resident of Australia a rebate in its assessment at the average rate of tax


Korea and included in the taxable income of the company, the

Governments of the Contracting States will enter into negotiations in order

to establish new provisions concerning the credit to be allowed by

Australia against its tax on the dividends.


if subsequently to the signature of the Convention Korea provides relief

from its tax on intercorporate dividends, or in a convention with another





country agrees to give credit for the tax of the other country on profits out

of which dividends are paid to a resident of Korea, it shall immediately

notify Australia and enter into negotiations in order to establish new

provisions concerning the credit to be allowed by Korea against its tax on

dividends.

(6) In general,

if in a convention for the avoidance of double taxation that is

subsequently made between Australia and a third State Australia should

agree—

(a) to reduce below 15 per cent the rate of its tax on dividends paid by

a company which is a resident of Australia and to which a resident

of the third State is beneficially entitled; or

(b) to include an Article dealing with non--discrimination,


Korea and shall enter into negotiations with the Government of Korea with

a view to providing treatment in relation to Korea comparable with that




Done in duplicate at Canberra this twelfth day of July of the year one

thousand nine hundred and eighty--two in the English and Korean languages,

both texts being equally authoritative.

For the Government of For the Government of the

Australia: Republic of Korea:

JOHN HOWARD HA JONG YOON

Schedule 23 2006 Norwegian convention


Schedule 23—2006 Norwegian convention Note: See section 3.

CONVENTION BETWEEN AUSTRALIA AND THE KINGDOM OF

NORWAY FOR THE AVOIDANCE OF DOUBLE TAXATION WITH

RESPECT TO TAXES ON INCOME AND THE PREVENTION OF

FISCAL EVASION


Norway,

Desiring to conclude a Convention for the avoidance of double taxation

with respect to taxes on income and the prevention of fiscal evasion,


ARTICLE 1

Persons Covered



2006 Norwegian convention Schedule 23


ARTICLE 2

Taxes Covered

1 The existing taxes to which this Convention shall apply are:



(ii) the resource rent tax in respect of offshore projects

relating to exploration for or exploitation of petroleum

resources,

imposed under the federal law of Australia;

(b) in the case of Norway:

(i) the tax on general income;

(ii) the tax on personal income;

(iii) the special tax on petroleum income;

(iv) the resource rent tax on income from production of

hydro-electric power;

(v) the withholding tax on dividends; and

(vi) the tax on remuneration to non-resident artistes, etc.

2 This Convention shall apply also to any identical or substantially

similar taxes that are imposed under the federal law of Australia or the law of

Norway after the date of signature of this Convention in addition to, or in place

of, the existing taxes. The competent authorities of the Contracting States shall

notify each other of any significant changes that have been made in the law of

their respective States relating to the taxes to which this Convention applies

within a reasonable period of time after those changes.

3 For the purposes of Article 24, the taxes to which this Convention shall

apply are taxes of every kind and description imposed on behalf of the

Contracting States, or their political subdivisions or local authorities.



4 For the purposes of Articles 26 and 27, the taxes to which this

Convention shall apply are:

(a) in the case of Australia, taxes of every kind and description

imposed under the federal tax laws administered by the

Commissioner of Taxation; and

(b) in the case of Norway, taxes of every kind and description.

ARTICLE 3

General Definitions

1 For the purposes of this Convention, unless the context otherwise

requires:

(a) the term "Australia", when used in a geographical sense,






(v) the Territory of Heard Island and McDonald Islands;

and


and includes any area adjacent to the territorial limits of

Australia (including the Territories specified in this

subparagraph) in respect of which there is for the time being in

force, consistently with international law, a law of Australia

dealing with the exploration for or exploitation of any of the

natural resources of the seabed and subsoil of the continental

shelf;

(b) the term "Norway" means the land territory, internal waters, the

territorial sea and the area beyond the territorial sea where the

Kingdom of Norway, according to Norwegian legislation and in



accordance with international law, may exercise rights with

respect to the seabed and subsoil and their natural resources; the

terms do not comprise Svalbard, Jan Mayen and the Norwegian

dependencies ("biland");

(c) the terms "Contracting State", "one of the Contracting States"

and "other Contracting State" shall refer to Australia or

Norway, as the context requires;

(d) the term "Australian tax" means tax imposed by Australia,

being tax to which this Convention applies by virtue of

paragraphs 1 and 2 of Article 2;

(e) the term "Norwegian tax" means tax imposed by Norway or its

political subdivisions or local authorities, being tax to which

this Convention applies by virtue of paragraphs 1 and 2 of

Article 2;

(f) the term "business" includes the performance of professional


(g) the term "company" means any body corporate or any entity

which is treated as a company or body corporate for tax

purposes;

(h) the term "competent authority" means, in the case of Australia,

the Commissioner of Taxation or an authorised representative

of the Commissioner and, in the case of Norway, the Minister

of Finance or an authorised representative of the Minister;

(i) the term "enterprise" applies to the carrying on of any business;

(j) the terms "enterprise of a Contracting State" and "enterprise of

the other Contracting State" mean respectively an enterprise

carried on by a resident of a Contracting State and an enterprise


(k) the term "international traffic" means any transport by a ship or


when such transport is solely between places in the other

Contracting State;

(l) the term "national", in relation to a Contracting State, means:

(i) any individual possessing the nationality or citizenship

of that Contracting State; and



(ii) any company deriving its status as such from the laws

in force in that Contracting State;

(m) the term "person" includes an individual, a company and any

other body of persons;

(n) the term "tax" means Australian tax or Norwegian tax as the

context requires, but does not include any penalty or interest

imposed under the law of either Contracting State relating to its

tax;

(o) the term "recognised stock exchange" means:

(i) the Australian Stock Exchange and any other

Australian stock exchange recognised as such under

Australian law;

(ii) the Oslo Stock Exchange and any other Norwegian

stock exchange recognised as such under Norwegian

law; and

(iii) any other stock exchange agreed upon by the

competent authorities.

2 As regards the application of the Convention at any time by a



that State concerning the taxes to which the Convention applies, any meaning

under the applicable tax law of that State prevailing over a meaning given to the

term under other law of that State.

ARTICLE 4

Residence

1 For the purposes of this Convention, the term "resident of a Contracting

State" means:

(a) in the case of Australia, a person who is a resident of Australia

for the purposes of Australian tax; and



(b) in the case of Norway, a person who is liable to tax therein by

reason of domicile, residence, place of management or any

other criterion of a similar nature.

The Government of a Contracting State or a political subdivision or

local authority of that State is also a resident of that State for

the purposes of the Convention.

2 A person is not a resident of a Contracting State for the purposes of this

Convention if the person is liable to tax in that State in respect only of

income from sources in that State.

3 Where by reason of the preceding provisions of this Article a person,

being an individual, is a resident of both Contracting States, then the person’s

status shall be determined as follows:

(a) the individual shall be deemed to be a resident only of the State

in which a permanent home is available to that individual; but if

a permanent home is available in both States, or in neither of

them, that individual shall be deemed to be a resident only of

the State with which the individual’s personal and economic

relations are closer (centre of vital interests);

(b) if the State in which the centre of vital interests is situated

cannot be determined, the individual shall be deemed to be a

resident only of the State of which that individual is a national;

(c) if the individual is a national of both States or of neither of

them, the competent authorities of the Contracting States shall

endeavour to resolve the question by mutual agreement.

4 Where by reason of the provisions of paragraph 1 a person other than an


a resident only of the State in which its place of effective management is

situated.

5 Where under this Convention any income, profits or gains are relieved


Contracting State, an individual in respect of that income or those profits or

gains is exempt from tax by virtue of being a temporary resident of the other



State within the meaning of the applicable tax laws of that other State, then the

relief to be allowed under this Convention in the first-mentioned State shall not

apply to the extent that that income or those profits or gains are exempt from tax

in the other State.

ARTICLE 5


1 For the purposes of this Convention, the term "permanent

establishment" means a fixed place of business through which the business of


2 The term "permanent establishment" includes especially:


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place relating to

the exploration for or exploitation of natural resources; and


3 Notwithstanding the provisions of paragraphs 1 and 2, an enterprise

shall be deemed to have a permanent establishment in a Contracting State and to

carry on business through that permanent establishment if:

(a) it has a building site or construction or installation project in

that State, or a supervisory or consultancy activity connected

therewith, which lasts more than six months; or



(b) it furnishes services, including consultancy services, for the

same or a connected project, through its employees or other

personnel engaged for such purposes, within a Contracting

State for a period or periods aggregating more than six months

within any twelve month period; or

(c) it maintains substantial equipment for rental or other purposes

within that other State (excluding equipment let under a

hire-purchase agreement) for more than six months; or

(d) a person acting in a Contracting State on behalf of an enterprise

of the other Contracting State manufactures or processes in the

first-mentioned State for the enterprise goods or merchandise

belonging to the enterprise.

4 (a) The duration of activities under subparagraph 3(a) will be

determined by aggregating the periods during which activities

are carried on in a Contracting State by associated enterprises

provided that the activities of the enterprise in that State are

substantially the same as the activities carried on in that State

by its associate.

(b) The period during which two or more associated enterprises are

carrying on concurrent activities will be counted only once for

the purpose of determining the duration of activities.

(c) Under this Article, an enterprise shall be deemed to be



(ii) both are controlled directly or indirectly by the same

third person or persons.

5 Notwithstanding the preceding provisions of this Article, an enterprise

shall not be deemed to have a permanent establishment merely by reason of:

(a) the use of facilities solely for the purpose of storage or display of

goods or merchandise belonging to the enterprise; or



(b) the maintenance of a stock of goods or merchandise belonging to

the enterprise solely for the purpose of storage or display; or

(c) the maintenance of a stock of goods or merchandise belonging to


enterprise; or

(d) the maintenance of a fixed place of business solely for the purpose

of purchasing goods or merchandise, or for collecting information,

for the enterprise; or

(e) the maintenance of a fixed place of business solely for the purpose

of carrying on, for the enterprise, any other activity of a

preparatory or auxiliary character.

6 Notwithstanding the provisions of paragraphs 1 and 2, where a

person—other than an agent of an independent status to whom paragraph 7

applies—is acting on behalf of an enterprise and has, and habitually exercises,

in a Contracting State an authority to conclude contracts on behalf of the

enterprise, that enterprise shall be deemed to have a permanent establishment in

that State in respect of any activities which that person undertakes for that

enterprise, unless the activities of such person are limited to those mentioned in

paragraph 5 and are, in relation to the enterprise, of a preparatory or auxiliary

character.

7 An enterprise shall not be deemed to have a permanent establishment in

a Contracting State merely because it carries on business in that State through a

person who is a broker, general commission agent or any other agent of an

independent status, provided that such persons are acting in the ordinary course

of the person's business as such a broker or agent.

8 The fact that a company which is a resident of a Contracting State







9 The principles set forth in the preceding paragraphs of this Article shall

be applied in determining for the purposes of this Convention whether there is a

permanent establishment in a State other than one of the Contracting States and

whether an enterprise other than an enterprise of one of the Contracting States

has a permanent establishment in one of the Contracting States.

ARTICLE 6


1 Income derived by a resident of a Contracting State from real property

may be taxed in the Contracting State in which the real property is situated.

2 The term "real property":

(a) in the case of Australia, has the meaning which it has under the

laws of Australia, and shall also include:

(i) a lease of land and any other interest in or over land,

whether improved or not, including a right to explore

for mineral, oil or gas deposits or other natural

resources, and a right to mine those deposits or

resources; and

(ii) a right to receive variable or fixed payments either as

consideration for or in respect of the exploitation of, or

the right to explore for or exploit, mineral, oil or gas

deposits, quarries or other places of extraction or

exploitation of natural resources.

(b) in the case of Norway, means immovable property according to

the laws of Norway, and shall also include:


(ii) rights to which the provisions of the general law

respecting landed property apply;



(iii) usufruct of immovable property; and

(iv) a right to receive variable or fixed payments as

consideration for the working of, or the right to work,

mineral deposits, oil or gas wells, quarries or other

places of extraction or exploitation of natural resources.


3 Any interest or right referred to in paragraph 2 shall be regarded as



place.

4 The provisions of paragraph 1 shall apply to income derived from the


5 The provisions of paragraphs 1, 3, and 4 shall also apply to income

from real property of an enterprise.

ARTICLE 7

Business Profits

1 The profits of an enterprise of a Contracting State shall be taxable only





establishment.

2 Subject to the provisions of paragraph 3, where an enterprise of a










3 In determining the profits of a permanent establishment, there shall be










competent authority of that State is inadequate to determine the profits to be

attributed to a permanent establishment, provided that that law shall be applied,

so far as it is practicable to do so, consistently with the principles of this Article.

5 No profits shall be attributed to a permanent establishment by reason of


the enterprise.

6 For the purposes of the preceding paragraphs, the profits to be attributed

to the permanent establishment shall be determined by the same method year by

year unless there is good and sufficient reason to the contrary.

7 Where profits include items of income or gains which are dealt with



8 Nothing in this Article shall affect the operation of any law of a


non-residents provided that if the relevant law in force in either Contracting

State at the date of signature of this Convention is varied (otherwise than in






9 Where:

(a) a resident of a Contracting State is beneficially entitled,

whether directly or through one or more interposed trust estates,

to a share of the business profits of an enterprise carried on in

the other Contracting State by the trustee of a trust estate other

than a trust estate which is treated as a company for tax

purposes; and

(b) in relation to that enterprise, that trustee would, in accordance

with the principles of Article 5, have a permanent establishment

in that other State,





ARTICLE 8


1 Profits of an enterprise of a Contracting State derived from the


State.

2 Notwithstanding the provisions of paragraph 1, profits of an enterprise



directly or indirectly from ship or aircraft operations confined solely to places in

that other State.



3 The provisions of paragraphs 1 and 2 shall also apply to profits derived

from the participation in a pool, a joint business or in an international operating

agency.

4 For the purposes of this Article, profits derived from the carriage by


shipped in a Contracting State and are discharged at a place in that State shall be

treated as profits from ship or aircraft operations confined solely to places in

that State.

5 The provisions of paragraphs 1, 2 and 3 shall apply to profits derived by

the joint Norwegian, Danish and Swedish air transport consortium Scandinavian

Airlines System (SAS), but only insofar as profits derived by SAS Norge AS,

the Norwegian partner of the Scandinavian Airlines System (SAS), are in

proportion to its share in that organisation.

ARTICLE 9


1 Where:

(a) an enterprise of a Contracting State participates directly or

indirectly in the management, control or capital of an enterprise

of the other Contracting State; or

(b) the same persons participate directly or indirectly in the


State and an enterprise of the other Contracting State,













competent authority of that State is inadequate to determine the profits accruing

to an enterprise, provided that that law shall be applied, so far as it is practicable

to do so, consistently with the principles of this Article.

3 Where profits on which an enterprise of a Contracting State has been

charged to tax in that State are also included, by virtue of the provisions of

paragraph 1 or 2, in the profits of an enterprise of the other Contracting State

and charged to tax in that other State, and the profits so included are profits

which might have been expected to have accrued to that enterprise of the other

State if the conditions operative between the enterprises had been those which

might have been expected to have operated between independent enterprises

dealing wholly independently with one another, then the first-mentioned State

shall make an appropriate adjustment to the amount of tax charged on those

profits in the first-mentioned State, if that State considers the adjustment

justified. In determining such an adjustment, due regard shall be had to the

other provisions of this Convention and for this purpose the competent

authorities of the Contracting States shall if necessary consult each other.

ARTICLE 10

Dividends

1 Dividends paid by a company which is a resident of a Contracting State



2 However, those dividends may also be taxed in the Contracting State of


and according to the law of that State, but the tax so charged shall not exceed:

(a) 5 per cent of the gross amount of the dividends, if the beneficial

owner of those dividends is a company (other than a

partnership) which holds directly at least 10 per cent of the

voting power in the company paying the dividends; and



(b) 15 per cent of the gross amount of the dividends in all other

cases,

provided that if the relevant law in either Contracting State at the date of

signature of this Convention is varied otherwise than in minor respects so as not

to affect its general character, the Contracting States shall consult each other

with a view to agreeing to any amendment of this paragraph that may be

appropriate.

3 Notwithstanding the provisions of paragraph 2 of this Article, dividends

shall not be taxed in the Contracting State of which the company paying the

dividends is a resident if the beneficial owner of the dividends is a company that

is a resident of the other Contracting State that has owned shares representing

80 per cent or more of the voting power of the company paying the dividends

for a twelve month period ending on the date the dividend is declared and the

company that is the beneficial owner of the dividends:

(a) has its principal class of shares listed on a recognised stock

exchange specified in subparagraph (i) or (ii) of

subparagraph (o) of paragraph 1 of Article 3 and is regularly

traded on one or more recognised stock exchanges;

(b) is owned directly or indirectly by one or more companies

whose principal class of shares is listed on a recognised stock

exchange specified in subparagraph (i) or (ii) of

subparagraph (o) of paragraph 1 of Article 3 and is regularly

traded on one or more recognised stock exchanges; or

(c) does not meet the requirements of subparagraphs (a) or (b) of

this paragraph but the competent authority of the

first-mentioned Contracting State determines, in accordance

with the law of that State, that the establishment, acquisition or

maintenance of the company that is the beneficial owner of the

dividends and the conduct of its operations did not have as one

of its principal purposes the obtaining of benefits under this

Convention. The competent authority of the first-mentioned

Contracting State shall consult the competent authority of the

other Contracting State before refusing to grant benefits of this

Convention under this subparagraph.

4 The term "dividends" as used in this Article means income from shares

or other rights, not being debt-claims, participating in profits, as well as other



amounts which are subjected to the same taxation treatment as income from

shares by the law of the State of which the company making the distribution is a

resident for the purposes of its tax.

5 The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial

owner of the dividends, being a resident of a Contracting State, carries on


dividends is a resident, through a permanent establishment situated therein, and

the holding in respect of which the dividends are paid is effectively connected

with such permanent establishment. In such case, the provisions of Article 7

shall apply.

6 Where a company which is a resident of a Contracting State derives


impose any tax on the dividends paid by the company—being dividends


State—except insofar as the holding in respect of which such dividends are paid


State, even if the dividends paid consist wholly or partly of profits or income



of Australian tax and which is also a resident of Norway for the purposes of

Norwegian tax.



assignment of shares or other rights in respect of which the dividend is paid to

take advantage of this Article by means of that creation or assignment.

ARTICLE 11

Interest

1 Interest arising in a Contracting State and beneficially owned by a




2 However, that interest may also be taxed in the Contracting State in



3 Notwithstanding paragraph 2, interest arising in a Contracting State and

beneficially owned by a resident of the other Contracting State may not be taxed

in the first-mentioned State if:

(a) the interest is derived from the investment of official reserve

assets by the government of a Contracting State, its monetary

institutions or a bank performing central banking functions in

that State; or

(b) the interest is derived by a financial institution which is

unrelated to and dealing wholly independently with the payer.

For the purposes of this Article, the term "financial institution"

means a bank or other enterprise substantially deriving its

profits by raising debt finance in the financial markets or by

taking deposits at interest and using those funds in carrying on

a business of providing finance.

4 Notwithstanding paragraph 3, interest referred to in subparagraph (b) of


exceeding 10 per cent of the gross amount of the interest if the interest is paid as

part of an arrangement involving back-to-back loans or other arrangement that

is economically equivalent and intended to have a similar effect to back-to-back

loans.

5 The term "interest" in this Article includes interest from government

securities or from bonds or debentures, whether or not secured by mortgage,

interest from any other form of indebtedness, as well as income which is

subjected to the same taxation treatment as income from money lent by the law

of the Contracting State in which the income arises.

6 The provisions of paragraphs 1 and 2, subparagraph (b) of paragraph 3



Contracting State in which the interest arises, through a permanent

establishment situated therein, and the indebtedness in respect of which the



interest is paid is effectively connected with such permanent establishment. In

such case the provisions of Article 7 shall apply.

7 Interest shall be deemed to arise in a Contracting State when the payer

is a resident of that State for the purposes of its tax. Where, however, the

person paying the interest, whether the person is a resident of a Contracting

State or not, has in a Contracting State or outside both Contracting States a

permanent establishment in connection with which the indebtedness on which

the interest is paid was incurred, and such interest is borne by such permanent

establishment, then such interest shall be deemed to arise in the State in which






been agreed upon by the payer and the beneficial owner in the absence of that


amount. In such case, the excess part of the payments shall remain taxable

according to the law of each Contracting State, due regard being had to the




assignment of the indebtedness in respect of which the interest is paid to take


ARTICLE 12

Royalties

1 Royalties arising in a Contracting State and beneficially owned by a




2 However, those royalties may also be taxed in the Contracting State in



3 The term "royalties" in this Article means payments or credits, whether



(a) the use of, or the right to use, any copyright, patent, design or


property or right; or

(b) the supply of scientific, technical, industrial or commercial


(c) the supply of any assistance that is ancillary and subsidiary to,

and is furnished as a means of enabling the application or

enjoyment of, any such property or right as is mentioned in

subparagraph (a) or any such knowledge or information as is

mentioned in subparagraph (b); or

(d) the use of, or the right to use:


(ii) films or audio or video tapes or disks, or any other

means of image or sound reproduction or transmission

for use in connection with television, radio or other

broadcasting; or

(e) the use of, or the right to use, some or all of the part of the

radiofrequency spectrum specified in a spectrum licence; or

(f) total or partial forbearance in respect of the use or supply of any


4 The provisions of paragraphs 1 and 2 shall not apply if the beneficial



permanent establishment situated therein, and the right or property in respect of

which the royalties are paid or credited is effectively connected with such




5 Royalties shall be deemed to arise in a Contracting State when the payer


paying the royalties, whether the person is a resident of a Contracting State or



incurred, and the royalties are borne by the permanent establishment, then such

royalties shall be deemed to arise in the State in which the permanent

establishment is situated.





have been agreed upon by the payer and the beneficial owner in the absence of


last-mentioned amount. In such case, the excess part of the amount of the

payments or credits shall remain taxable according to the law of each

Contracting State, due regard being had to the other provisions of this

Convention.



assignment of rights in respect of which the royalties are paid or credited to take


ARTICLE 13


1 Income, profits or gains derived by a resident of a Contracting State

from the alienation of real property referred to in Article 6 and situated in the

other Contracting State may be taxed in that other State.

2 Income, profits or gains from the alienation of property, other than real

property, that forms part of the business property of a permanent establishment

which an enterprise of a Contracting State has in the other Contracting State,



including income, profits or gains from the alienation of that permanent

establishment (alone or with the whole enterprise), may be taxed in that other

State.

3 Income, profits or gains of an enterprise of a Contracting State from the

alienation of ships or aircraft operated by that enterprise in international traffic,

or of property (other than real property) pertaining to the operation of those

ships or aircraft, shall be taxable only in that State.


from the alienation of any shares or comparable interests deriving more than 50

per cent of their value directly or indirectly from real property situated in the

other Contracting State, may be taxed in that other State.

5 Gains of a capital nature from the alienation of any property, other than

that referred to in the preceding paragraphs shall be taxable only in the

Contracting State of which the alienator is a resident.

ARTICLE 14

Income from Employment

1 Subject to the provisions of Articles 15, 17 and 18, salaries, wages and




employment is so exercised, such remuneration as is derived therefrom may be


2 Notwithstanding the provisions of paragraph 1, remuneration derived






(a) the recipient is present in the other State for a period or periods

not exceeding in the aggregate 183 days in any twelve month

period commencing or ending in the year of income of that

other State; and

(b) the remuneration is paid by, or on behalf of, an employer who

is a resident of the first-mentioned State; and

(c) the remuneration is not borne by a permanent establishment

which the employer has in that other State.

3 Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated

in international traffic may be taxed in the Contracting State of which the

enterprise operating the ship or aircraft is a resident. However, where such

remuneration is derived in respect of an employment exercised aboard a ship

registered in the Norwegian International Ships' register (NIS), the

remuneration shall be taxable only in the Contracting State where the recipient

is a resident.

4 Where a resident of a Contracting State derives remuneration in respect

of an employment exercised aboard an aircraft operated in international traffic

by the Scandinavian Airlines System (SAS) consortium, such remuneration

shall be taxable only in that State.

ARTICLE 15

Directors' Fees

Directors' fees and other similar payments derived by a resident of a

Contracting State in that person's capacity as a member of the board of

directors, or similar body, of a company which is a resident of the other

Contracting State may be taxed in that other State.



ARTICLE 16

Entertainers and Sportspersons

1 Notwithstanding the provisions of Articles 7 and 14, income derived by

a resident of a Contracting State as an entertainer, such as a theatre, motion

picture, radio or television artiste, or a musician, or as a sportsperson, from that

person's personal activities as such exercised in the other Contracting State, may

be taxed in that other State.

2 Where income in respect of personal activities exercised by an

entertainer or a sportsperson in that person's capacity as such accrues not to that

person but to another person, that income may, notwithstanding the provisions

of Articles 7 and 14, be taxed in the Contracting State in which the activities of

the entertainer or sportsperson are exercised.

3 The provisions of paragraphs 1 and 2 shall not apply to income derived

from activities performed in a Contracting State by entertainers or sportspersons

if the visit to that State is wholly or mainly supported by public funds of the

other Contracting State or a political subdivision or local authority of that State.

In such a case, the income is taxable only in the Contracting State of which the

entertainer or sportsperson is a resident.

ARTICLE 17


1 Subject to the provisions of paragraph 2 of Article 18, pensions and

annuities paid to a resident of a Contracting State shall be taxable only in that

State.

2 The term "annuity" means a stated sum payable periodically at stated





money or money's worth.

3 Any alimony or other maintenance payment arising in a Contracting

State and paid to a resident of the other Contracting State shall be taxable only

in the first-mentioned State.

ARTICLE 18

Government Service

1 Salaries, wages and other similar remuneration, other than a pension or

annuity, paid by a Contracting State or a political subdivision or local authority

of that State to an individual in respect of services rendered to that State or

subdivision or authority shall be taxable only in that State. However, such

salaries, wages and other similar remuneration shall be taxable only in the other

Contracting State if the services are rendered in that other State and the

individual is a resident of that other State who:

(a) is a national of that State; or



2 Any pension paid by, or out of funds created by, a Contracting State or

a political subdivision or local authority of that State to an individual in the

respect of services rendered to that State or subdivision or authority (including,

in the case of Norway, any national insurance element of such pension) shall be

taxable only in that State. However, such pensions shall be taxable only in the

other Contracting State if the individual is a resident of, and a national of, that

State.

3 The provisions of Articles 14, 15, 16 and 17 shall apply to salaries,

wages and other similar remuneration and to pensions in respect of services

rendered in connection with a business carried on by a Contracting State or a

political subdivision or local authority of that State.



ARTICLE 19

Students

Payments which a student who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is

temporarily present in the first-mentioned State solely for the purpose of the

student's education receives for the purpose of the student's maintenance or

education shall not be taxed in that State, provided that such payments arise

from sources outside that State.

ARTICLE 20

Offshore Activities

1 The provisions of this Article shall apply notwithstanding any other

provision of this Convention.

2 A person who is a resident of a Contracting State and carries on

activities offshore in the other Contracting State in connection with the

exploration or exploitation of the seabed or subsoil or their natural resources

situated in that other State shall, subject to paragraph 3 of this Article, be

deemed in relation to those activities to be carrying on business in that other

State through a permanent establishment situated therein.

3 The provisions of paragraph 2 shall not apply where the activities are

carried on in a Contracting State for a period or periods not exceeding 30 days

in the aggregate in any twelve month period commencing or ending in the year

of income of that State. However, for the purposes of this paragraph:

(a) activities carried on by an enterprise associated with another enterprise

shall be regarded as carried on by the enterprise with which it is



associated if the activities in question are substantially the same as

those carried on by the last-mentioned enterprise;

(b) the period during which two or more associated enterprises are carrying

on concurrent activities will be counted only once for the purpose of

determining the duration of activities; and

(c) an enterprise shall be deemed to be associated with another enterprise

if:


(ii) both are controlled directly or indirectly by the same third person or

persons.

4 Salaries, wages and other similar remuneration derived by a resident of

a Contracting State in respect of an employment connected with the exploration

or exploitation of the seabed or subsoil or their natural resources situated in the

other Contracting State may, to the extent that the employment is exercised

offshore in that other State, be taxed in that other State. However, such

remuneration shall be taxable only in the first-mentioned State if the

employment is exercised offshore for an employer who is not a resident of the

other State and provided that the employment is carried on for a period or

periods not exceeding in the aggregate 30 days in any twelve month period

commencing or ending in the year of income of that other State.

ARTICLE 21

Other Income

1 Items of income of a resident of a Contracting State, wherever arising,

not dealt with in the foregoing Articles of this Convention shall be taxable only

in that State.

2 The provisions of paragraph 1 shall not apply to income, other than



State through a permanent establishment situated therein and the right or

property in respect of which the income is paid is effectively connected with




apply.

3 Notwithstanding the provisions of paragraphs 1 and 2, items of income

of a resident of a Contracting State not dealt with in the foregoing Articles of

this Convention from sources in the other Contracting State may also be taxed


ARTICLE 22

Source of Income


which, under any one or more of Articles 6 to 8, 10 to 16, 18 and 20, may be

taxed in the other Contracting State shall for the purposes of the law of that

other State relating to its tax be deemed to arise from sources in that other State.


which, under any one or more of Articles 6 to 8, 10 to 16, 18 and 20, may be

taxed in the other Contracting State shall for the purposes of Article 23 and of

the law of the first-mentioned State relating to its tax be deemed to arise from

sources in the other State.

ARTICLE 23


1 Subject to the provisions of the law of Australia from time to time in



this Article), Norwegian tax paid under the law of Norway and in accordance

with this Convention, whether directly or by deduction, in respect of income



derived by a person who is a resident of Australia from sources in Norway shall

be allowed as a credit against Australian tax payable in respect of that income.

2 Subject to the provisions of the laws of Norway regarding the

allowance as a credit against Norwegian tax of tax payable in a territory outside

Norway (which shall not affect the general principle hereof):

(a) where a resident of Norway derives income which, in

accordance with the provisions of this Convention, may be

taxed in Australia, Norway shall allow as a deduction from the

tax on the income of that resident, an amount equal to the

income tax paid in Australia on that income. Such deduction

shall not, however, exceed that part of the income tax, as

computed before the deduction is given, which is attributable to

the income which may be taxed in Australia.

(b) where in accordance with any provision of the Convention

income derived by a resident of Norway is exempt from tax in

Norway, Norway may nevertheless include such income in the

tax base, but shall allow as a deduction from the Norwegian tax

on income that part of the Norwegian income tax which is

attributable to the income derived from Australia.

ARTICLE 24

Non-discrimination

1 Nationals of a Contracting State shall not be subjected in the other



requirements to which nationals of that other State in the same circumstances, in

particular with respect to residence, are or may be subjected.

2 The taxation on a permanent establishment which an enterprise of a


levied in that other State than the taxation levied on enterprises of that other

State carrying on the same activities in similar circumstances.



3 Except where the provisions of paragraph 1 of Article 9, paragraph 8 of

Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other

disbursements paid by an enterprise of a Contracting State to a resident of the

other Contracting State shall for the purpose of determining the taxable profits

of such enterprise, be deductible under the same conditions as if they had been

paid to a resident of the first-mentioned State.

4 Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by one or more residents of

the other Contracting State, shall not be subjected in the first-mentioned State to

any taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which other

similar enterprises of the first-mentioned State in similar circumstances are or

may be subjected.

5 Nothing contained in this Article shall be construed as obliging a

Contracting State to grant to individuals who are residents of the other

Contracting State any of the personal allowances, reliefs and reductions for tax

purposes which are granted to its own resident individuals.

6 This Article shall not apply to any provision of the law of a Contracting

State which:

(a) is designed to prevent the avoidance or evasion of taxes; or

(b) does not permit the deferral of tax arising on the transfer of an

asset where the subsequent transfer of the asset by the

transferee would be beyond the taxing jurisdiction of the

Contracting State under its laws; or

(c) provides for consolidation of group entities for treatment as a

single entity for tax purposes provided that a company, being a

resident of that State, the capital of which is wholly or partly

owned or controlled, directly or indirectly, by one or more

residents of the other Contracting State, may access such

consolidation treatment on the same terms and conditions as

other companies that are residents of the first-mentioned State;

or



(d) does not allow tax rebates or credits in relation to dividends

paid by a company that is a resident of that State for purposes

of its tax; or

(e) provides deductions to eligible taxpayers for expenditure on

research and development; or

(f) is otherwise agreed to be unaffected by this Article in an

Exchange of Notes between the Contracting States.

7 In this Article, provisions of the law of a Contracting State which are

designed to prevent avoidance or evasion of taxes include:

(a) measures designed to address thin capitalisation, dividend

stripping and transfer pricing;

(b) controlled foreign company, transferor trusts and foreign

investment fund rules; and

(c) measures designed to ensure that taxes can be effectively

collected and recovered, including conservancy measures.

ARTICLE 25


1 Where a person considers that the actions of one or both of the


accordance with this Convention, the person may, irrespective of the remedies

provided by the domestic law of those States concerning taxes to which this

Convention applies, present a case to the competent authority of the Contracting

State of which the person is a resident or, if the case comes under paragraph 1

of Article 24, to that of the Contracting State of which the person is a national.

The case must be presented within 3 years from the first notification of the

action resulting in taxation not in accordance with this Convention.

2 The competent authority shall endeavour, if the claim appears to it to be






accordance with this Convention. The solution so reached shall be

implemented notwithstanding any time limits in the domestic law of the

Contracting States.

3 The competent authorities of the Contracting States shall endeavour to


interpretation or application of this Convention. They may also consult together

for the elimination of double taxation in cases not provided for in this

Convention.

4 The competent authorities of the Contracting States may communicate



5 For the purposes of paragraph 3 of Article XXII (Consultation) of the









ARTICLE 26


1 The competent authorities of the Contracting States shall exchange such

information as is forseeably relevant for carrying out the provisions of this

Convention or to the administration or enforcement of the domestic laws

concerning taxes referred to in Article 2, insofar as the taxation thereunder is

not contrary to the Convention. The exchange of information is not restricted by

Article 1.



2 Any information received under paragraph 1 by a Contracting State


domestic laws of that State and shall be disclosed only to persons or authorities

(including courts and administrative bodies) concerned with the assessment or


appeals in relation to the taxes referred to in paragraph 1, or the oversight of the



judicial decisions.

3 In no case shall the provisions of paragraphs 1 and 2 be construed so as


(a) to carry out administrative measures at variance with the laws


State; or

(b) to supply information which is not obtainable by the competent

authority under the laws or in the normal course of the

administration of that or of the other Contracting State; or


industrial, commercial or professional secret or trade process,

or information, the disclosure of which would be contrary to

public policy (ordre public).

4 If information is requested by a Contracting State in accordance with




the preceding sentence is subject to the limitations of paragraph 3 but in no case

shall such limitations be construed to permit a Contracting State to decline to

supply information solely because it has no domestic interest in such

information.

5 In no case shall the provisions of paragraph 3 be construed to permit a






interests in a person.

ARTICLE 27

Assistance in the Collection of Taxes

1 The Contracting States shall lend assistance to each other in the




2 The term "revenue claim" as used in this Article means an amount owed

in respect of taxes referred to in Article 2, insofar as the taxation thereunder is

not contrary to this Convention or any other instrument to which the

Contracting States are parties, as well as interest, administrative penalties and

costs of collection or conservancy related to such amount.

3 When a revenue claim of a Contracting State is enforceable under the

laws of that State and is owed by a person who, at that time, cannot, under the

laws of that State, prevent its collection, that revenue claim shall, at the request



shall be collected by that other State in accordance with the provisions of its

laws applicable to the enforcement and collection of its own taxes as if the

revenue claim were a revenue claim of that other State.

4 When a revenue claim of a Contracting State is a claim in respect of








in accordance with the provisions of its laws as if the revenue claim were a




5 Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim



revenue claim under the laws of that State by reason of its nature as such. In


paragraph 3 or 4 shall not, in that State, have any priority applicable to that

revenue claim under the laws of the other Contracting State.

6 Proceedings with respect to the existence, validity or the amount of a



7 Where, at any time after a request has been made by a Contracting State



revenue claim ceases to be:

(a) in the case of a request under paragraph 3, a revenue claim of

the first-mentioned State that is enforceable under the laws of

that State and is owed by a person who, at that time, cannot,

under the laws of that State, prevent its collection; or

(b) in the case of a request under paragraph 4, a revenue claim of

the first-mentioned State in respect of which that State may,

under its laws, take measures of conservancy with a view to

ensure its collection,




8 In no case shall the provisions of this Article be construed so as to




(a) to carry out administrative measures at variance with the laws


State; or

(b) to carry out measures which would be contrary to public policy

(ordre public); or

(c) to provide assistance if the other Contracting State has not

pursued all reasonable measures of collection or conservancy,

as the case may be, available under its laws or administrative

practice; or

(d) to provide assistance in those cases where the administrative

burden for that State is clearly disproportionate to the benefit to

be derived by the other Contracting State; or

(e) to provide assistance if that State considers that the taxes with


generally accepted taxation principles.

ARTICLE 28

Members of Diplomatic Missions and Consular Posts

1 Nothing in this Convention shall affect the fiscal privileges of members

of diplomatic missions or consular posts under the general rules of international

law or under the provisions of special international agreements.

2 Insofar as, due to fiscal privileges granted to members of diplomatic

missions and consular posts under the general rules of international law or

under the provisions of special international agreements, income is not subject

to tax in the receiving State, the right to tax shall be reserved to the sending

State.



ARTICLE 29

Entry into Force

1 The Contracting States shall notify each other in writing through the

diplomatic channel of the completion of their domestic requirements for the

entry into force of this Convention.

2 This Convention shall enter into force on the date of the last

notification, and thereupon the Convention shall have effect:




after 1 January in the calendar year next following the

date on which the Convention enters into force;



after 1 July in the calendar year next following the date

on which the Convention enters into force;

(b) in the case of Norway, in respect of taxes on income relating to

the calendar year (including accounting periods beginning in

any such year) next following that in which the Convention

enters into force and subsequent years;

(c) for purposes of Article 26, from the date of entry into force of

this Convention; and

(d) for purposes of Article 27, from a date to be agreed in an

exchange of notes through the diplomatic channel.

3 The Convention between Australia and the Kingdom of Norway for the


to taxes on income and on capital signed at Canberra on 6 May 1982, shall be

terminated and shall cease to have effect from the dates on which this

Convention becomes effective in accordance with paragraph 2 of this Article.



ARTICLE 30

Termination

This Convention shall continue in effect indefinitely, but either

Contracting State may terminate the Convention by giving written notice of

termination, through the diplomatic channel, to the other State at least six

months before the end of any calendar year beginning after the expiration of

five years from the date of its entry into force and, in that event, the Convention

shall cease to be effective:




after 1 January in the calendar year next following that

in which the notice of termination is given;



after 1 July in the calendar year next following that in


(b) in the case of Norway:

in respect of taxes on income relating to the calendar

year (including accounting periods beginning in such

year) next following that in which the notice is given

and subsequent years.

IN WITNESS WHEREOF the undersigned, being duly authorised, have signed

this Convention.

DONE at Canberra on this eighth day of August two thousand and six, in

duplicate in the English language.




AUSTRALIA:


NORWAY:

Hon. Peter Dutton

Minister for Revenue and Assistant

Treasurer

H.E. Lars Albert Wensell

Ambassador


Agreement between Australia and Malta for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to Taxes on Income Schedule 24



and Malta for the Avoidance of Double



Income Section 3

Australia and Malta,




CHAPTER I


ARTICLE 1

Personal Scope



ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Agreement shall apply are:

(a) in Australia:



(b) in Malta:

the income tax, including prepayments of tax whether made by

deduction at source or otherwise.



of this Agreement in addition to, or in place of, the existing taxes. As soon as

possible after the end of each calendar year, the competent authority of each

Contracting State shall notify the competent authority of the other Contracting

Schedule 24 Agreement between Australia and Malta for the Avoidance of Double



State of any substantial changes which have been made in the laws of his State


CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions















(b) the term ‘Malta’ means the Republic of Malta and, when used in a

geographical sense, means the Island of Malta, the Island of Gozo and

the other islands of the Maltese archipelago, including the territorial

waters thereof, and any area outside the territorial sea of Malta which,

in accordance with international law, has been or may hereafter be

designated, under the law of Malta concerning the continental shelf, as

an area within which the rights of Malta with respect to the sea--bed and

subsoil and their natural resources may be exercised;

(c) the terms ‘Contracting State, one of the Contracting States’ and ‘other

Contracting State’ mean Australia or Malta, as the context requires;

(d) the term ‘person’ includes an individual, a company and any other body

of persons;



(f) the terms ‘enterprise of one of the Contracting States’ and ‘enterprise of

the other Contracting State’ mean an enterprise carried on by a resident




of Australia or an enterprise carried on by a resident of Malta, as the

context requires;

(g) the term ‘international traffic’ means any transport by a ship or aircraft

except where the ship or aircraft is operated solely between places

within a Contracting State;

(h) the term ‘tax’ means Australian tax or Malta tax, as the context

requires;

(i) the term ‘Australian tax’ means tax imposed by Australia, being tax to


(j) the term ‘Malta tax’ means tax imposed by Malta, being tax to which

this Agreement applies by virtue of Article 2;

(k) the term ‘competent authority’ means, in the case of Australia, the


case of Malta, the Minister responsible for finance or his authorized

representative.

(2) In this Agreement, the terms ‘Australian tax’ and ‘Malta tax’ do not



2.





ARTICLE 4

Residence


Contracting States:

(a) in the case of Australia, subject to the provisions of paragraph (2), if the

person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Malta, if the person is liable to tax therein by reason of his

domicile, residence, place of management or any other criterion of a

similar nature. A person is not a resident of Malta if he is liable to tax in

Malta in respect only of income from sources therein.

(2) In relation to income from sources in Malta, a person who is subject to


as a resident of Australia unless the income from sources in Malta is subject to





solely because it is subject to Malta tax.










(4) In determining for the purposes of paragraph (3) the Contracting State with

which an individual’s personal and economic relations are the closer, the

matters to which regard may be had shall include the citizenship of the

individual.

(5) Where by reason of the provisions of paragraph (1), a person other than an




ARTICLE 5


(1) For the purposes of this Agreement, the term ‘permanent establishment’,

in—relation to an enterprise, means a fixed place of business through which the

business of the enterprise is wholly or partly carried on.

(2) The term ‘permanent establishment’ shall include especially:


(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;


natural resources;



exists for more than 183 days in any twelve--month period.














enterprise;






establishment if:

(a) it carries on supervisory activities in that State for more than 183 days

in any twelve--month period in connection with a building site, or a

construction, installation or assembly project which is being undertaken

in that State;

(b) there is being used in that State by, for or under contract with the

enterprise substantial equipment including, but not limited to, an

installation, drilling rig or ship used for, or in activities connected with,

the exploration for or exploitation of natural resources; or

(c) it carries on supervisory activities in that State in connection with the

use of equipment referred to in sub--paragraph (b).




of that enterprise in the first--mentioned State:

(a) in respect of his activities in that behalf, if he has, and habitually

exercises in that State, an authority to conclude contracts on behalf of

the enterprise, unless his activities are limited to those mentioned in

paragraph (3) and are such that, if exercised through a fixed place of

business, would not make that fixed place of business a permanent

establishment under the provisions of that paragraph; or




(b) if, in so acting, he manufactures or processes in that State for the

enterprise goods or merchandise belonging to the enterprise.











(8) The principles set forth in the preceding paragraphs of this Article shall be


permanent establishment outside both Contracting States, and whether an



CHAPTER III

TAXATION OF INCOME

ARTICLE 6




(2) In this Article, the term ‘real property’:

(a) in the case of Australia, has the meaning which it has under the laws of

Australia, and shall also include:


improved or not; and

(ii) a right to receive variable or fixed payments as consideration for

the working of, or the right to work or to explore for, mineral

deposits, oil or gas wells, quarries or other places of extraction or

exploitation of natural resources; and

(b) in the case of Malta, means immovable property according to the laws

of Malta, and shall also include:





(ii) rights to which the provisions of the general law respecting

landed property apply;

(iii) usufruct of immovable property; and

(iv) rights to variable or fixed payments in respect of the operation of

mines or quarries or of the exploitation of or exploration for any

natural resources.

Ships, boats and aircraft shall not be regarded as real property.

(3) A lease of land, any other interest in or over land and any right referred to

in any of the sub--paragraphs of paragraph (2) shall be regarded as situated

where the land, mineral deposits, oil or gas wells, quarries or natural resources,

as the case may be, are situated or the exploration may take place.


direct use, letting or use in any other form of real property.

(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the income



ARTICLE 7

Business Profits





taxed in the other State but only so much of them as is attributable to that






















enterprise.



including the determination of such liability by the exercise of a discretion or

the making of an estimate by the competent authority of that State in cases in

which, from the information available to the competent authority of that State, it

is not possible or not practicable to ascertain the profits to be attributed to a

permanent establishment, provided that that law shall be applied, so far as the

information available to the competent authority permits, consistently with the

principles of this Article.

(6) For the purposes of the preceding paragraphs of this Article, the profits to

be attributed to the permanent establishment shall be determined by the same

method year by year unless there is good and sufficient reason to the contrary.






non--residents provided that if the relevant law in force in either Contracting

State at the date of signature of this Agreement is varied (otherwise than in




ARTICLE 8


















State.

(5) Notwithstanding the provisions of this Article, profits from the operation of

ships in international traffic derived by a company which is a resident of Malta

may be taxed in Australia unless the company proves that such profits are not

relieved from Malta tax under the provisions of the Merchant Shipping Act,

1973, or under any identical or similar provision. The foregoing sentence,

however, shall not apply if the company proves that not more than 25 per cent

of its capital is owned, directly or indirectly, by persons who are not residents of

Malta.

ARTICLE 9


(1) Where:
















including the determination of such liability by the exercise of a discretion or

the making of an estimate by the competent authority of that State in cases in




which, from the information available to the competent authority of that State, it

is not possible or not practicable to determine the income to be attributed to an

enterprise, provided that that law shall be applied, so far as the information


this Article.



(2), in the profits of an enterprise of the other Contracting State and taxed








had to the other provisions of this Agreement in relation to the nature of the

income and for this purpose the competent authorities of the Contracting States

shall if necessary consult each other.

ARTICLE 10

Dividends






according to the law of that State, but:

(a) in the case of tax charged by Australia:

that tax shall not exceed 15 per cent of the gross amount of the

dividends;

(b) in the case of tax charged by Malta:

(i) such tax on the gross amount of the dividends shall not exceed that

chargeable on the profits out of which the dividends are paid;




(ii) where such dividends are paid out of profits of a company which

are subject to tax at a reduced rate of tax under special provisions

designed to promote investments necessary for the economic

development of Malta, the rate of Malta tax on the dividends shall

not exceed such reduced rate.

The provisions of this paragraph shall not affect the taxation of the company on

the profits out of which the dividends are paid.






entitled to the dividends, being a resident of one of the Contracting States,


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 any

such case the provisions of Article 7 or Article 14, as the case may be, shall

apply.






that other State. Provided that this paragraph shall not apply in relation to


of Australian tax and which is also a resident of Malta for the purposes of Malta

tax.

ARTICLE 11

Interest



that other State.












income arises.


entitled to the interest, being a resident of one of the Contracting States, carries

on business in the other Contracting State, in which the interest arises, through a

permanent establishment situated therein, or performs in that other State

independent personal services from a fixed base situated therein, and the

indebtedness in respect of which the interest is paid is effectively connected






however, the person paying the interest, whether he is a resident of one of the

Contracting States or not, has in one of the Contracting States or outside both


which the indebtedness on which the interest is paid was incurred, and such

interest is borne by such permanent establishment or fixed base, then such

interest shall be deemed to arise in the State in which the permanent











ARTICLE 12

Royalties



that other State.







(3) The term ‘royalties’ in this Article means payments or credits, whether




plan, secret formula or process, trademark or other like property or

right;


equipment;


or information;



such property or right as is mentioned in sub--paragraph (a), any such

equipment as is mentioned in sub--paragraph (b) or any such knowledge

or information as is mentioned in sub--paragraph (c);





(f) total or partial forbearance in respect of the use or supply of any



entitled to the royalties, being a resident of one of the Contracting States, carries

on business in the other Contracting State, in which the royalties arise, through

a permanent establishment situated therein, or performs in that other State

independent personal services from a fixed base situated therein, and the

property or right in respect of which the royalties are paid or credited is






however, the person paying the royalties, whether he is a resident of one of the

Contracting States or not, has in one of the Contracting States or outside both





which the liability to pay the royalties was incurred, and the royalties are borne

by the permanent establishment or fixed base, then the royalties shall be deemed

to arise in the State in which the permanent establishment or fixed base is

situated.


beneficially entitled to the royalties, or between both of them and some other








ARTICLE 13


(1) Income or gains from the alienation of real property may be taxed in the

Contracting State in which the real property is situated.

(2) Income or gains from the alienation of shares or comparable interests in a

company, the assets of which consist wholly or principally of real property, may

be taxed in the Contracting State in which the assets or the principal assets of

the company are situated.


(a) the term ‘real property’ has the same meaning that it has in Article 6;

and

(b) any lease, interest or right referred to in any sub--paragraph of

paragraph (2) of that Article shall be regarded as situated where the

land, mineral deposits, oil or gas wells, quarries or natural resources, as

the case may be, are situated or the exploration may take place.

ARTICLE 14




activities of a similar character shall be taxable only in that State. However, if

such an individual:

(a) has a fixed base regularly available to him in the other Contracting State

for the purpose of performing his activities; or




(b) in a year of income or in the year immediately preceding a year of

assessment, as the case may be, stays in the other Contracting State for

a period or periods aggregating more than 183 days for the purpose of

performing his activities; or

(c) derives, in a year of income or in the year immediately preceding a year

of assessment, as the case may be, from residents of the other

Contracting State gross remuneration exceeding twelve thousand five

hundred Australian dollars or its equivalent in Malta pounds from

performing his activities in that State,

so much of the income derived by him as is attributable to activities so

performed may be taxed in the other State.

(2) The Treasurer of Australia and the Minister responsible for finance in

Malta may agree in letters exchanged for the purpose to variations in the

amount specified in subparagraph (c) of paragraph (1) and any variations so


(3) The term ‘professional services’ includes services performed in the


activities, as well as in the exercise of independent activities of physicians,


ARTICLE 15











first--mentioned State if:


exceeding in the aggregate 183 days in the year of income or in the year

immediately preceding the year of assessment, as the case may be, of

that other State; and








other State; and

(d) the remuneration is, or upon the application of this Article will be,

subject to tax in the first--mentioned State.




in that State.

ARTICLE 16

Directors’ Fees


Contracting States in his capacity as a member of the board of directors, or

other comparable body however described, of a company which is a resident of

the other Contracting State may be taxed in that other State.

ARTICLE 17

Entertainers









ARTICLE 18











(3) Notwithstanding anything in this Agreement, any pension or allowance that

is paid by one of the Contracting States in respect of wounds, disabilities or

death caused by war, or in respect of war service, and is exempt from tax under

the law of that State, to a resident of the other Contracting State shall be exempt


ARTICLE 19

Government Service

(1) Remuneration, other than a pension or annuity, paid by one of the











of the Contracting States or a political sub--division or local authority of that

State. In such a case, the provisions of Article 15 or Article 16, as the case may

be, shall apply.

(3) Where remuneration is paid under a development assistance programme of

a Contracting State, out of funds exclusively supplied by that State, to a

specialist or volunteer seconded to the other Contracting State with the consent

of that other State, such remuneration shall be deemed to have been paid by the

first--mentioned State and shall be taxable only in that State.

ARTICLE 20

Students




his education at a university, college, school or other similar educational

institution, receives payments from sources outside that other State for the






ARTICLE 21





(2) However, any such income derived by a resident of one of the Contracting

States, from sources in the other Contracting State, may also be taxed in that

other State.






ARTICLE 22

Sources of Income


any one or more of Articles 6 to 8, Articles 10 to 19 and Article 21, may be

taxed in the other Contracting State shall, for the purposes of Article 23 and of

the income tax law of that other State, be deemed to be income from sources in

that other State.

CHAPTER IV


ARTICLE 23




Malta tax paid under the law of Malta and in accordance with this Agreement,

whether directly or by deduction, in respect of income derived by a person who

is a resident of Australia from sources in Malta (not including, in the case of a

dividend, tax paid in respect of the profits out of which the dividend is paid)

shall be allowed as a credit against Australian tax payable in respect of that

income.








income and are received from a company which is a resident of Malta.


the dividends ceases to be allowable under that law, Australia shall immediately

advise Malta of the change and enter into negotiations with Malta in order to

establish new provisions concerning the credit to be allowed by Australia

against its tax on the dividends.

(3) For the purposes of paragraph (1) and of the income tax law of Australia:

(a) a resident of Australia deriving income from sources in Malta

consisting of dividends to which sub--paragraph (2) (b) (ii) of Article 10

applies, interest to which Article 11 applies or royalties to which Article

12 applies, being income in respect of which Malta tax has been wholly

relieved or reduced for a limited period of time under the provisions of

the Aids to Industries Ordinance 1959, so far as they were in force on,

and have not been modified since, the date of signature of this

Agreement, or have been modified only in minor respects so as not to

affect their general character, or under any other provisions which may

subsequently be agreed by the Contracting States in letters exchanged

for the purpose through the diplomatic channel to be of a substantially

similar character, shall be deemed to have paid Malta tax in an amount,

or the Malta tax paid shall be deemed to have been increased by an

amount, equal to the amount by which the Malta tax that otherwise

would have been payable (which tax, in the case of dividends, shall not

exceed 15 per cent and, in the case of royalties or interest, 10 per cent of

the gross amount thereof) is reduced by the exemption or reduction

granted; and

(b) the amount of the said dividends, interest or royalties shall be deemed to

be the amount that would have been the amount of the dividends,

interest or royalties if no Malta tax had been paid, increased by the

amount by which the tax that otherwise would have been payable is

reduced by the said exemption or reduction.

(4) Paragraph (3) shall not apply in relation to income derived in any year of

income after the year of income that ends on 30 June 1989 or on any later date

that may be agreed by the Contracting States in letters exchanged for this

purpose.

(5) (a) Subject to the provisions of the law of Malta from time to time in force

which relate to the allowance of a credit against Malta tax of tax paid in

a country outside Malta (which shall not affect the general principle

hereof), Australian tax paid under the law of Australia and in




accordance with this Agreement, whether directly or by deduction, in

respect of income derived by a person who is a resident of Malta from

sources in Australia (not including, in the case of a dividend, tax paid in

respect of the profits out of which the dividend is paid) shall be allowed

as a credit against Malta tax payable in respect of that income.

(b) Where a company which is a resident of Australia pays a dividend to a

company which is a resident of Malta and which controls directly or

indirectly at least 10 per cent of the voting power in the first--mentioned

company, the credit shall take into account (in addition to any

Australian tax for which credit may be allowed under

sub--paragraph (a)) the Australian tax payable by that first--mentioned

company in respect of the profits out of which such dividend is paid.

(6) Where under this Agreement income is to be relieved from tax in one of

the Contracting States and, under the law in force in the other Contracting State,

a person, in respect of the said income, is subject to tax by reference to the

amount thereof which is remitted to or received in that other State and not by

reference to the full amount thereof, then the relief to be allowed under this

Agreement in the first--mentioned State shall apply only to so much of the

income as is remitted to or received in the other State.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 24









Agreement.




view to the avoidance of taxation not in accordance with this Agreement. Any







to resolve any difficulties or doubts arising as to the interpretation or application

of this Agreement.



Agreement.

ARTICLE 25













such purposes.







State;




policy.

ARTICLE 26


(1) Nothing in this Agreement shall affect the fiscal privileges of diplomatic or






(2) Notwithstanding Article 4, an individual who is a member of a diplomatic

mission, consular post or permanent mission of one of the Contracting States

which is situated in the other Contracting State or in a third State shall be

deemed for the purposes of this Agreement to be a resident of the sending State

if he is liable in the sending State to the same obligations in relation to tax on

his total income as are residents of that sending State.

(3) This Agreement shall not apply to International Organizations, to organs or

officials thereof or to persons who are members of a diplomatic mission,

consular post or permanent mission of a third State, being present in a

Contracting State and who are not liable in either Contracting State to the same

obligations in relation to tax on their total income as are residents thereof.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 27

Entry into Force

This Agreement shall enter into force on the date on which the Contracting

States exchange notes through the diplomatic channel notifying each other that

the last of such things has been done as is necessary to give this Agreement the

force of law in Australia and in Malta, as the case may be, and thereupon this

Agreement shall have effect:

(a) in Australia:



in the calendar year next following that in which the Agreement

enters into force;



next following that in which the Agreement enters into force;

(b) in Malta:

in relation to taxes which are levied for the year of assessment

beginning on 1 January in the second calendar year following that

in which the Agreement enters into force and for any subsequent

year of assessment.




ARTICLE 28

Termination

This Agreement shall continue in effect indefinitely, but either of the

Contracting States may, on or before 30 June in any calendar year beginning

after the expiration of 5 years from the date of its entry into force, give to the

other Contracting State through the diplomatic channel written notice of

termination and, in that event, this Agreement shall cease to be effective:

(a) in Australia:







next following that in which the notice of termination is given;

(b) in Malta:

in relation to taxes which are levied for the year of assessment

beginning on 1 January in the second calendar year following that

in which the notice of termination is given and for subsequent

years of assessment.



DONE in duplicate at Malta this ninth day of May One thousand nine

hundred and eighty--four in the English language.

N. ROSS--SMITH ALEX SCEBERRAS TRIGONA

FOR AUSTRALIA FOR MALTA

International Tax Agreements Act 1953

Documents

Transcript of International Tax Agreements Act 1953