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This is a Bill, not an Act. For current law, see the Acts databases.
1998-99
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
International
Tax Agreements Amendment Bill 1999
No.
, 1999
(Treasury)
A
Bill for an Act to amend the International Tax Agreements Act 1953, and
for related purposes
ISBN: 0642 409307
Contents
International Tax Agreements Act
1953 3
International Tax Agreements Act
1953 31
International Tax Agreements Act
1953 43
International Tax Agreements Act
1953 67
A Bill for an Act to amend the International Tax
Agreements Act 1953, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the International Tax Agreements Amendment
Act 1999.
(1) Subject to this section, this Act commences on the day on which it
receives the Royal Assent.
(2) Items 2 and 3 of Schedule 3 commence immediately after the
commencement of Schedule 1.
(3) Items 2 and 3 of Schedule 4 commence immediately after the
commencement of item 2 of Schedule 3.
Subject to section 2, each Act that is specified in a Schedule to this
Act is amended or repealed as set out in the applicable items in the Schedule
concerned, and any other item in a Schedule to this Act has effect according to
its terms.
International
Tax Agreements Act 1953
1 Subsection 3(1)
Insert:
the South African agreement means 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 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 42.
2 After section 11ZF
Insert:
Subject to this Act, on and after the date of entry into force of the
South African agreement, the provisions of the agreement, so far as those
provisions affect Australian tax, have the force of law according to their
tenor.
3 At the end of the Act
Add:
Note: See 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,
HAVE
AGREED as follows:
This Agreement shall apply to persons who are residents of one or both
of the Contracting States.
1 The existing taxes to which this Agreement 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 South Africa:
(i) the normal tax;
and
(ii) the secondary tax on companies.
2 The Agreement shall
apply also to any identical or substantially similar taxes which are imposed
under the federal law of Australia or by the Government of the Republic of South
Africa under its domestic law after the date of signature of the Agreement 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 the Agreement applies within a reasonable period of time after those
changes.
1 For the purposes of this Agreement, unless the context otherwise
requires:
(a) 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;
(b) the term “South
Africa” means the Republic of South Africa and, when used in a
geographical sense, includes its territorial sea as well as any area outside the
territorial sea, including the continental shelf, which has been or may
hereafter be designated, under the laws of South Africa and in accordance with
international law, as an area within which South Africa may exercise sovereign
rights or jurisdiction;
(c) the term “Australian tax” means
tax imposed by Australia, being tax to which the Agreement applies by virtue of
Article 2;
(d) the term “South African tax” means tax
imposed by South Africa, being tax to which the Agreement applies by virtue of
Article 2;
(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 “competent authority” means, in the
case of Australia, the Commissioner of Taxation or an authorised representative
of the Commissioner and, in the case of South Africa, the Commissioner for the
South African Revenue Service or an authorised representative of the
Commissioner;
(g) the terms “a Contracting State” and
“other Contracting State” mean Australia or South Africa, as the
context requires;
(h) the terms “enterprise of a Contracting
State” 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 South Africa, as the context requires;
(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 from a place or between places in the other
Contracting State;
(j) the term “person” includes an
individual, a company and any other body of persons;
(k) the term
“tax” means Australian tax or South African 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 As regards the
application of the Agreement at any time by a Contracting State, any term not
defined in the Agreement shall, unless the context otherwise requires, have the
meaning which it has at that time under the law of that State concerning the
taxes to which the Agreement applies, any meaning under the applicable law of
that State prevailing over a meaning given to the term under other law of that
State.
1 For the purposes of this Agreement, a person is 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 but does not include
any person who is liable to tax in Australia in respect only of income from
sources in Australia; and
(b) in the case of South Africa, any
individual who is ordinarily resident in South Africa and any other person which
has its place of effective management in South Africa.
The term
“resident” also includes a Contracting State and any political
subdivision or local authority of that State.
2 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 shall be deemed to be a
resident only of the Contracting State in which a permanent home is available to
the person, or if a permanent home is available to the person in both
Contracting States, or in neither of them, the person shall be deemed to be a
resident only of the Contracting State with which the person’s personal
and economic relations are closer.
3 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 only of the State in which its
place of effective management is situated.
1 For the purposes of this Agreement, the term “permanent
establishment” 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:
(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;
(g) an agricultural, pastoral or forestry property;
and
(h) a building site or construction, installation or assembly
project which exists for more than 12 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 irregular
delivery 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, display or irregular delivery;
or
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another 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 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 a Contracting State and to carry on business through that
permanent establishment if:
(a) it carries on supervisory activities in
that State for more than 12 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 by,
for or under contract with the enterprise; or
(c) a person acting in a
Contracting State on behalf of an enterprise of the other Contracting State
manufactures or processes in the firstmentioned State for the enterprise goods
or merchandise belonging to the enterprise.
5 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 6
applies—shall be deemed to be a permanent establishment of that enterprise
in the firstmentioned State if 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.
6 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.
7 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.
8 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.
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”:
(a) in the case of Australia, has the
meaning which it has under the law of Australia and includes:
(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; and
(b) in the case of South Africa, means such
property which according to the law of South Africa is immovable property, and
includes:
(i) property accessory to immovable
property;
(ii) rights to which the provisions of general law respecting
landed property apply;
(iii) usufruct of immovable property;
and
(iv) 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,
immovable property, 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 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 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.
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, 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 reasonably 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.
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) 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 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 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 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.
6 Where profits include
items of income or gains 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.
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 nonresidents provided that if the relevant law in
force in either Contracting State at the date of signature of the 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.
8 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,
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.
For the purposes of
this paragraph, in the case of South Africa “trust estate” means a
trust.
1 Profits of an enterprise of a Contracting State derived from the
operation of ships or aircraft shall be taxable only in that
State.
2 Notwithstanding the provisions of paragraph 1, those profits may
be taxed in the other Contracting State to the extent that they are profits
derived directly or indirectly from ship or aircraft operations confined solely
to places in that other State.
3 The profits to which the provisions of
paragraphs 1 and 2 apply shall include profits from:
(a) the lease of
ships or aircraft on a bareboat basis, and of containers and related equipment,
which is merely incidental to the international operation of ships or aircraft
by the lessor, provided that the leased ships or aircraft, or the containers and
related equipment, are used in international operations by the lessee;
and
(b) the operation of ships or aircraft derived through 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 which are 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.
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 reasonably
be expected to operate between independent enterprises dealing wholly
independently with one another, then any profits which, but for those
conditions, might reasonably 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.
2 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, including determinations in cases where the information
available to the 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 reasonably 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 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 the tax charged on those profits in the firstmentioned State if
that State agrees with the primary adjustment. In determining the adjustment by
the firstmentioned State, 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.
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 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) no tax shall be
charged on dividends where those dividends are paid out of profits that have
borne the normal rate of company tax where those dividends are paid to a company
which holds directly at least 10 per cent of the capital of the company paying
the dividends; and
(b) tax charged shall not exceed 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
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.
3 For the purposes of paragraph 2, profits have borne the normal rate of
company tax:
(a) in Australia, to the extent to which the dividends have
been fully “franked” in accordance with its law relating to tax;
and
(b) in South Africa, where they have been subject to South African
tax.
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 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 Article
14, as the case may be, shall apply.
6 Where a company is a resident of a
Contracting State, 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; or
(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) (i) that other State does not subject profits attributable to a
permanent establishment to tax in excess of the rate of income tax (in the case
of Australia) or normal tax (in the case of South Africa) payable on the profits
of a company which is a resident of that State; and
(ii) the dividends
are paid out of profits attributable to one or more permanent establishments
which the company has in that other State.
Where subparagraph (c) applies
and subparagraphs (a) and (b) do not apply, the tax shall not exceed 5 per cent
of the gross amount of the dividends. 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 South Africa for the
purposes of South African tax.
7 Notwithstanding any other provisions of
the Agreement, where a company which is a resident of a Contracting State has a
permanent establishment in the other Contracting State, that other State may tax
the profits attributable to the permanent establishment at a rate not exceeding
by more than 5 percentage points:
(a) in the case of Australia, the rate
of income tax payable on the profits of a company which is a resident of
Australia; and
(b) in the case of South Africa, the rate of normal tax
payable on the profits of a company which is a resident of South
Africa.
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 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 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, 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.
4 The provisions of
paragraphs 1 and 2 shall not apply if the person 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 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 Article 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 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 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.
6 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 lastmentioned 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 Agreement.
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 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 10 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; 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:
(i) motion picture films; or
(ii) films or video tapes for
use in connection with television; or
(iii) tapes 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 property or right referred to in this
paragraph.
4 The provisions of paragraphs 1 and 2 shall not apply if the
person 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 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 or credited is effectively connected with that permanent
establishment or fixed base. In that 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
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
royalties, 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 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.
6 Where, owing to a special relationship between the payer and
the person 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 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 lastmentioned amount. In that case, the excess part of
the amount 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.
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 firstmentioned 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 those
ships, aircraft or other property 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 or 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 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 The situation of real property
shall be determined for the purposes of this Article in accordance with
paragraph 3 of Article 6.
1 Income derived by an individual who is a resident of a Contracting
State in respect of professional services or other activities of an independent
character shall be taxable only in that State unless a fixed base is regularly
available to the individual in the other Contracting State for the purpose of
performing the individual’s activities. If such a fixed base is available
to the individual, the income may be taxed in the other State but only so much
of it as is attributable to that fixed base. For the purposes of this Agreement,
where an individual who is resident of a Contracting State is present in the
other Contracting 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 or year
of assessment of that other State, the individual shall be deemed to have a
fixed base regularly available in that other State and the income that is
derived from the individual’s activities performed in that other State
shall be attributable to 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.
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 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 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:
(a) the
recipient is present in the other State for a period or periods not exceeding in
the aggregate 183 days in any 12 month period commencing or ending in the year
of income or year of assessment 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.
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 an
enterprise of a Contracting State may be taxed in that State.
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 of a company which is a resident of the other Contracting State may
be taxed in that other State.
1 Notwithstanding the provisions of Articles 7, 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 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, 14 and 15, be taxed in the Contracting State in which the activities
of the entertainer or sportsperson are exercised.
1 Subject to the provisions of paragraph 2 of Article 19, pensions and
annuities from sources in one Contracting State and paid to a resident of the
other Contracting State shall be exempt from tax in the firstmentioned
Contracting State to the extent that such pensions and annuities are included in
taxable income in the other State.
2 Notwithstanding the provisions of
paragraph 1, an annuity paid to an individual who is a former resident of a
Contracting State which has been purchased by that individual by way of a lump
sum cash consideration from an insurer in the course of that insurer’s
insurance business carried on in that State, may be taxed in that
State.
3 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.
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
citizen or national of that State; or
(b) did not become a resident of
that State solely for the purpose of rendering the services.
2 (a) Any
pension paid by, or out of the funds created by, a Contracting State, or a
political subdivision or a 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.
(b) However, that pension shall be taxable
only in the other Contracting State if the individual:
(i) is a resident
of, and a citizen or a national of that State; and
(ii) the services in
respect of which that pension is paid were rendered in that State.
3 The
provisions of paragraphs 1 and 2 shall not apply to salaries, wages and other
similar remuneration or to pensions in respect of services rendered in
connection with any business carried on by a Contracting State or a political
subdivision or local authority of that State. In that case, the provisions of
Articles 15 to 18, as the case may be, shall apply.
A student who is temporarily present in a Contracting State solely for
the purpose of the student’s education and who is, or immediately before
being so present was, a resident of the other Contracting State, shall be exempt
from tax in the firstmentioned State on payments received from sources outside
that firstmentioned State for the purposes of the student’s maintenance or
education.
1 Items of income of a resident of a Contracting State, 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 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 Article
14, as the case may be, shall 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 the Agreement from sources in the other
Contracting State may also be taxed in the other Contracting State.
1 Income, profits or gains derived by a resident of a 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.
2 Income, profits or gains derived by a
resident of a 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 firstmentioned Contracting State relating to
its tax be deemed to be income from sources in the other Contracting
State.
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 of this Article), South African tax paid under the law of South Africa
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 South Africa shall be allowed as a credit against Australian tax
payable in respect of that income.
2 Where a company which is a resident
of South Africa 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 firstmentioned company, the credit referred to in paragraph 1 shall
include the South African tax paid by that firstmentioned company in respect of
that portion of its profits out of which the dividend is paid.
3 In the
case of South Africa, Australian tax paid by a resident of South Africa in
respect of income taxable in Australia in accordance with the Agreement, shall
be deducted from the taxes due according to South African fiscal law. The
deduction shall not, however, exceed an amount which bears to the total South
African tax payable the same ratio as the income concerned bears to the total
income.
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 this Agreement, the person may, irrespective of the remedies
provided by the domestic law of those States concerning taxes to which the
Agreement 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 the 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 a satisfactory solution, to resolve the case with the competent
authority of the other Contracting State, with a view to the avoidance of
taxation which is not in accordance with the 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 Agreement. They may also consult together
for the elimination of double taxation in cases not provided for in the
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 the Agreement.
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 that 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 24 or, if the Contracting States fail to resolve that doubt, pursuant to
any other procedure acceptable to both Contracting States.
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 taxes to
which the Agreement applies insofar as the taxation under that law is not
contrary to the Agreement. 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 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 the Agreement applies. Those persons or
authorities shall use the information only for those purposes. They may disclose
the information in public court proceedings or in judicial
decisions.
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 law or the administrative practice
of that or of the other Contracting State; or
(b) to supply information
which is not obtainable under the law or in the normal course of the
administration of that or of the other Contracting State; or
(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.
Nothing in this Agreement shall affect the fiscal privileges of members
of diplomatic missions and consular posts under the general rules of
international law or under the provisions of special international
agreements.
The Government of Australia and the Government of the Republic of South
Africa shall notify each other in writing through the diplomatic channel of the
completion of their respective statutory and constitutional procedures required
for the entry into force of this Agreement. The Agreement shall enter into force
on the date of receipt of the last notification, and thereupon the Agreement
shall have effect:
(a) in the case of Australia:
(i) with regard
to withholding tax on income that is derived by a nonresident, in respect of
income derived on or after 1 January next following the date on which the
Agreement enters into force;
(ii) with regard to other Australian tax,
in respect of income, 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 Agreement
enters into force;
(b) in the case of South Africa:
(i) with
regard to taxes withheld at source, in respect of amounts paid or credited on or
after 1 January next following the date on which the Agreement enters into
force;
(ii) with regard to other South African tax, in respect of years
of assessment beginning on or after 1 January next following the date on which
the Agreement enters into force.
This Agreement shall continue in effect indefinitely, but either of the
Government of Australia or the Government of the Republic of South Africa 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,
the Agreement shall cease to be effective:
(a) in the case of
Australia:
(i) with regard to withholding tax on income that is derived
by a nonresident, in respect of income derived on or after 1 January next
following the date on which the notice of termination is
given;
(ii) with regard to other Australian tax, in respect of income,
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 notice of termination is
given;
(b) in the case of South Africa:
(i) with regard to taxes
withheld at source, in respect of amounts paid or credited after the end of the
calendar year in which the notice of termination is given;
(ii) with
regard to other South African tax, in respect of years of assessment beginning
after the end of the calendar year in which the notice of termination is
given.
IN WITNESS WHEREOF the undersigned, duly authorised by their
respective Governments, have signed this Agreement.
DONE in duplicate at
Canberra, this first day of July, 1999.
FOR THE GOVERNMENT OF FOR THE
GOVERNMENT OF
AUSTRALIA: THE REPUBLIC OF SOUTH AFRICA:
ROD KEMP BHADRA
RANCHOD
[Signatures omitted]
THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF SOUTH
AFRICA
HAVE AGREED AT THE SIGNING of the Agreement between the
Governments of the two Contracting 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
Agreement:
1 If, in an agreement for the avoidance of double taxation
that may subsequently be concluded between Australia and a third State, there is
included a Non-discrimination Article, Australia shall immediately inform the
Government of the Republic of South Africa in writing through the diplomatic
channel and shall enter into negotiations with the Government of the Republic of
South Africa with a view to providing comparable treatment for South Africa as
may be provided for the third State.
2 If, in an agreement for the
avoidance of double taxation that may subsequently be concluded between South
Africa and a third State, the rate at which South Africa may impose the
secondary tax on companies is limited, South Africa shall immediately inform the
Government of Australia in writing through the diplomatic channel and shall
enter into negotiations with the Government of Australia with a view to
providing comparable treatment for Australia as may be provided for the third
State.
IN WITNESS WHEREOF the undersigned, duly authorised by their
respective Governments, have signed this Protocol.
DONE in duplicate at
Canberra, this first day of July, 1999.
FOR THE GOVERNMENT OF FOR THE
GOVERNMENT OF
AUSTRALIA: THE REPUBLIC OF SOUTH AFRICA:
ROD
KEMP BHADRA RANCHOD
[Signatures omitted]
International
Tax Agreements Act 1953
1 Subsection 3(1)
Insert:
the Malaysian protocol means the Protocol
amending 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, being the protocol a copy of which in
the English language is set out in Schedule 16A.
2 After section 11F
Insert:
(1) Subject to this Act, on and after the date of entry into force of the
Malaysian protocol, the provisions of the protocol, so far as those provisions
affect Australian tax, have, and are taken to have had, the force of law
according to their tenor.
(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 Malaysian protocol.
(3) Nothing in 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 commencement of this section for the
purpose of giving effect to the Malaysian protocol.
3 After Schedule 16
Insert:
Note: See section 3
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 signed at
Canberra on 20 August 1980 (in this Protocol referred to as “the
Agreement”),
HAVE AGREED as follows:
Article 3 of the Agreement is amended by:
(a) deleting
subparagraphs (a) and (b) of paragraph 1 and substituting the
following:
“(a) 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 exploitation of any of the natural resources of the seabed and subsoil of
the continental shelf;
(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 5 of the Agreement is amended by:
(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 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 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 company for tax purposes;
and
(b) in relation to that enterprise, that trustee has, in accordance
with the principles of Article 5, a permanent establishment in that other
State,
the enterprise carried on by the trustee shall be deemed to be a
business 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 11 of the Agreement is amended by:
(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 13 of the Agreement is deleted and substituted with the
following:
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 taxed
in that other State.
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
the other Contracting 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 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 20 of the Agreement is amended by:
(a) deleting
“Students” in the heading and substituting “Students and
Trainees”; and
(b) inserting “or a trainee” after
“student”.
Article 22 of the Agreement is amended by:
(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 23 of the Agreement is deleted and substituted with the
following:
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 per cent of the gross amount of
the royalties.
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 paragraph 5 shall be deemed to be
Malaysian tax paid.
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,
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 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.”.
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
beginning on or after 1 July 1987;
(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 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 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
[Signatures omitted]
International
Tax Agreements Act 1953
1 Subsection 3(1)
Insert:
the Slovak agreement means the Agreement between Australia
and the Slovak Republic 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 43.
2 After section 11ZG
Insert:
Subject to this Act, on and after the date of entry into force of the
Slovak agreement, the provisions of the agreement so far as those provisions
affect Australian tax, have the force of law according to their tenor.
3 At the end of the Act
Add:
Note: See section 3
AUSTRALIA AND THE SLOVAK REPUBLIC,
DESIRING to conclude an
Agreement for the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income,
HAVE AGREED as
follows:
This Agreement shall apply to persons who are residents of one or both
of the Contracting States.
1. The existing taxes to which this Agreement shall apply
are:
(a) in the Slovak Republic:
(i) the tax on income of
individuals; and
(ii) the tax on income of legal persons;
and
(b) in 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.
2. This
Agreement shall also apply to any identical or substantially similar taxes which
are imposed under the federal law of Australia or the law of the Slovak Republic
after the date of signature of this Agreement 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 laws of
their respective States relating to the taxes to which this Agreement applies
within a reasonable period of time after those changes.
1. In this Agreement, unless the context otherwise
requires:
(a) the term “Slovak Republic”, when used in a
geographical sense, means the territory over which the Slovak Republic exercises
its sovereignty, sovereign rights or jurisdiction in accordance with the rules
of international law;
(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 Agreement applies by virtue of Article 2;
(d) the term
“company” means any body corporate or any entity which is treated as
a company or a body corporate for tax purposes;
(e) the term
“competent authority” means:
(i) in the case of the Slovak
Republic, the Minister of Finance of the Slovak Republic or an authorized
representative of the Minister; and
(ii) in the case of Australia, the
Commissioner of Taxation or an authorized representative of the
Commissioner;
(f) the terms “a Contracting State” and
“other Contracting State” mean the Slovak Republic or Australia, as
the context requires;
(g) the terms “enterprise of a Contracting
State” and “enterprise of the other Contracting State” mean an
enterprise carried on by a resident of the Slovak Republic or an enterprise
carried on by a resident of Australia, as the context requires;
(h) the
term “person” includes an individual, a company and any other body
of persons;
(i) the term “Slovak tax” means tax imposed by
the Slovak Republic, being tax to which this Agreement applies by virtue of
Article 2;
(j) the term “tax” means Australian tax or Slovak
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. 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 laws of that State from time to time in
force relating to the taxes to which this Agreement applies.
1. For the purposes of this Agreement, a person is a resident of a
Contracting State if that person is a resident of that State for the purposes of
its 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 Contracting State in which a permanent
home is available to the person;
(b) if a permanent home is available to
the person in both Contracting States, or in neither of them, the person shall
be deemed to be a resident solely of the Contracting State in which the person
has an habitual abode;
(c) if the person has an habitual abode in both
Contracting States, or does not have an habitual abode in either of them, the
person shall be deemed to be a resident solely of the Contracting State with
which the person’s economic and personal relations are the
closer.
4. For the purposes of paragraph 3, an individual’s
citizenship or nationality of a Contracting State shall be a factor in
determining the degree of the person’s economic and personal relations
with that State.
5. 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 management is situated.
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
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 natural resources;
(g) an agricultural, pastoral or
forestry property;
(h) a building site or construction, installation or
assembly project which exists for more than 12 months; and
(i) the
furnishing of services, including consultancy services, by an enterprise of a
Contracting State through an employee or other personnel in the other
Contracting State, provided that such activities continue in that other State
for the same project or a connected project for a period or periods aggregating
more than six months within any 12 month period.
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;
or
(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of storage, display or delivery;
or
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another 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 activities which have a preparatory or auxiliary
character for the enterprise, for example advertising or scientific
research.
4. 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 carries on supervisory activities in
that State for more than 12 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 including, for example, but not
limited to, a structure, installation, drilling rig, or machinery is being used
in that State by, for or under contract with, the enterprise.
5. 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 6 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 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.
6. 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.
7. 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.
8. The principles set forth in the preceding paragraphs of
this Article shall be applied in determining for the purposes of this Agreement
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.
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 a Contracting State, has the meaning
which it has under the laws of that State and includes:
(a) a lease of
land and any other entitlement 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 entitlement 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 income from real property of an enterprise and to income from real
property used for the performance of independent personal services.
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, 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 with which it deals.
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 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 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, 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. Where profits include items of income or gains 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.
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
nonresidents 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.
8. 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,
the enterprise carried on by the trustee shall be
deemed to be a business carried on in that 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.
1. Profits from the operation of ships or aircraft 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 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 a Contracting 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 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 profits from operations of ships or aircraft
confined solely to places in that State.
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, 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 profits of that
enterprise and taxed accordingly.
2. 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, 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 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 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.
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 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
per cent 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 law, relating to tax, of the
Contracting State of which the company making the distribution is a resident for
the purposes of its tax.
4. The provisions of paragraphs 1 and 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 either 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 in so far 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. 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 Slovak
Republic for the purposes of Slovak tax.
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 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. 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, interest from any other form of indebtedness and all other income
assimilated to income from money lent by the law, relating to tax, of the
Contracting State in which the income arises.
4. The provisions of
paragraphs 1 and 2 shall not apply if the person 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 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 either case, the
provisions of Article 7 or Article 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 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 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 the
interest shall be deemed to arise in the 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 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 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, but subject to the other
provisions of this Agreement.
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, 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 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
any:
(i) motion picture film; or
(ii) film or video tape 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) a total or partial forbearance in respect of
the use or supply of any property or right referred to in subparagraphs (a),
(b), (e), (f) and (g) of this paragraph.
4. The provisions of paragraphs
1 and 2 shall not apply if the person 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 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 or credited
is effectively connected with that permanent establishment or fixed base. In
either 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 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
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 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.
6. Where, owing to a special
relationship between the payer and the person 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 lastmentioned amount. In that
case, the excess part of the amount of the royalties paid or credited shall
remain taxable according to the law, relating to tax, of each Contracting State,
but subject to the other provisions of this Agreement.
1. Income, profits or gains derived by a resident of a Contracting
State from the alienation of real property (immovable 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
firstmentioned 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 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 is principally attributable to real
property situated in the other Contracting State, may be taxed in that other
State. The value of the assets of such entity can be held directly or
indirectly, through one or more interposed entities, such as, for example,
through a chain of companies.
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. The situation of real property shall be determined for the
purposes of this Article in accordance with the provisions of paragraph 3 of
Article 6.
1. 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 a fixed base is
regularly available to the individual in the other Contracting State for the
purpose of performing the individual’s activities. If such a fixed base is
available to the individual, 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.
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 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 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:
(a) the
recipient is present in that other State for a period or periods not exceeding
in the aggregate 183 days in any 12 month period commencing or ending in the
year of income concerned; 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; and
(d) the remuneration is, or upon the 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.
Directors’ fees and similar payments derived by a resident of a
Contracting State as a member of the board of directors or another similar organ
of a company which is a resident of the other Contracting State may be taxed in
that other State.
1. Notwithstanding the provisions of Articles 14 and 15, income derived
by entertainers (such as theatrical, motion picture, radio or television
artistes, and musicians) or sportspersons from their personal activities as such
may be taxed in the Contracting State in which those activities are
exercised.
2. Where income in respect of the personal activities of an
entertainer or sportsperson as such accrues not to that person but to another
person, that income may, notwithstanding the provisions of Articles 7, 14 and
15, be taxed in the Contracting State in which those activities are
exercised.
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.
1. Remuneration, other than a pension or annuity, paid by a Contracting
State or a political subdivision or 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, that 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 citizen (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 shall not apply to
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 15 or Article
16, as the case may be, shall apply.
Where a student or trainee, 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 or trainee’s education or training,
receives payments from sources outside that other State for the purpose of the
student’s or trainee’s maintenance, education or training, those
payments shall be exempt from tax in that other State.
1. Items of income of a resident of a Contracting State which are not
expressly mentioned in the foregoing Articles of this Agreement shall be taxable
only in that State.
2. However, any such income derived by a resident of
a Contracting State from sources in the other Contracting State may also be
taxed in that other State.
3. The provisions of paragraph 1 shall not
apply to income, other than income from “real property” as defined
in paragraph 2 of Article 6, if the recipient of such income, being a resident
of a Contracting State, carries on business in the other Contracting State
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 income is paid is effectively
connected with that permanent establishment or fixed base. In either case, the
provisions of Article 7 or Article 14, as the case may be, shall
apply.
1. Income, profits or gains derived by a resident of the Slovak
Republic which, under the provisions of any one or more of Articles 6 to 8 and
10 to 19, may be taxed in Australia shall for the purposes of the law of
Australia relating to Australian tax be deemed to be income from sources in
Australia.
2. Income, profits or gains derived by a resident of Australia
which, under the provisions of any one or more of Articles 6 to 8 and 10 to 19,
may be taxed in the Slovak Republic shall for the purposes of paragraph 1 of
Article 23 and of the law of Australia relating to Australian tax be deemed to
be income from sources in the Slovak Republic.
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
principles of this Article), Slovak tax paid under the law of the Slovak
Republic 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 the Slovak Republic shall be allowed as a credit
against Australian tax payable in respect of that income.
2. Where a
company which is a resident of the Slovak Republic 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 firstmentioned company, the credit
referred to in paragraph 1 shall include the Slovak tax paid by that
firstmentioned company in respect of that portion of its profits out of which
the dividend is paid.
3. In the Slovak Republic, double taxation will be
avoided in the following manner: the Slovak Republic, when imposing taxes on its
residents, may include in the tax base upon which such taxes are imposed the
items of income which according to the provisions of this Agreement may also be
taxed in Australia, but shall allow as a deduction from the amount of tax
computed on such a base an amount equal to the tax paid in Australia. Such
deduction shall not, however, exceed that part of the Slovak tax, as computed
before the deduction is given, which is appropriate to the income which, in
accordance with the provisions of this Agreement, may also be taxed in
Australia.
1. Where a person who is a resident of a Contracting State considers
that the actions of the competent authority of a Contracting State result or
will result for the person in taxation not in accordance with the provisions of
this Agreement, the person may, notwithstanding the remedies provided by the
national laws 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 four years from the first notification of the action
giving rise to 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 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.
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.
1. The competent authorities of the Contracting States shall exchange
such information as is necessary for the carrying out of this Agreement or of
the national laws of the Contracting States concerning the taxes to which this
Agreement applies in so far as the taxation under those laws 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 Contracting State shall be
treated as secret in the same manner as information obtained under the national
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, the 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.
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 laws or the administrative practice
of that or of the other Contracting State; or
(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; or
(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.
Nothing in this Agreement shall affect the fiscal privileges of
diplomatic and consular officials under the general rules of international law
or under the provisions of special international agreements.
1. Both Contracting States shall notify each other in writing of the
completion of their respective statutory and constitutional procedures required
for the entry into force of this Agreement.
2. This Agreement shall enter
into force on the date of the last notification referred to in paragraph 1, and
the provisions of this Agreement shall apply:
(a) in the Slovak
Republic:
(i) in respect of tax withheld at source, in relation to
amounts derived on or after 1 January in the calendar year next following that
in which the Agreement enters into force;
(ii) in respect of other
Slovak tax, in relation to tax chargeable for any taxable year beginning on or
after 1 January in the calendar year next following that in which the Agreement
enters into force;
(b) in Australia:
(i) in respect of
withholding tax on income that is derived by a nonresident, in relation to
income derived on or after 1 January in the calendar year next following that in
which the Agreement enters into force;
(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 Agreement enters into force.
This Agreement shall remain in force until terminated by a Contracting
State. Either Contracting State 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 Contracting State through the diplomatic channel
written notice of termination and, in that event, this Agreement shall cease to
be effective:
(a) in the Slovak Republic:
(i) in respect of tax
withheld at source, in relation to amounts derived on or after 1 January in the
calendar year next following that in which the notice of termination is
given;
(ii) in respect of other Slovak tax, in relation to tax
chargeable for any taxable year beginning on or after 1 January in the calendar
year next following that in which the notice of termination is
given;
(b) in Australia:
(i) in respect of withholding tax on
income that is derived by a nonresident, 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;
(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 notice of
termination is given.
IN WITNESS WHEREOF the undersigned, being duly
authorized thereunto by their respective Governments, have signed this
Agreement.
DONE in duplicate at Canberra, this twenty-fourth day of
August, One thousand nine hundred and ninety-nine in the Slovak and English
languages, both texts being equally authentic.
FOR AUSTRALIA: FOR THE
SLOVAK REPUBLIC:
ROD KEMP DR EDUARD KUKAN
[Signatures
omitted]
International
Tax Agreements Act 1953
1 Subsection 3(1)
Insert:
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 of which in the English language is set
out in Schedule 44.
2 After section 11ZH
Insert:
(1) Subject to this Act, on and after the date of entry into force of the
Argentine agreement, the provisions of the agreement, so far as those provisions
affect Australian tax, have, and are taken to have had, the force of law
according to their tenor.
(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 Argentine agreement.
3 At the end of the Act
Add:
Note: See section 3.
THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE ARGENTINE
REPUBLIC,
DESIRING to conclude an Agreement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on
income,
HAVE AGREED as follows:
This Agreement shall apply to persons who are residents of one or both
of the Contracting States.
1 The existing taxes to which this Agreement shall apply
are:
(a) in 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
Argentina:
the income tax (impuesto a las
ganancias).
2 This Agreement shall also apply to any identical or
substantially similar taxes which are imposed under the law of the Argentine
Republic or the federal law of Australia after the date of signature of this
Agreement 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 laws of their respective States relating to
the taxes to which this Agreement applies within a reasonable period of time
after those changes.
1 In this Agreement, unless the context otherwise requires and in
accordance with international law:
(a) the term “Argentina”,
when used in a geographical sense, includes:
(i) the maritime areas
adjacent to the outer limit of the territorial sea, to the extent to which the
Argentine Republic possesses sovereignty rights and jurisdiction,
and
(ii) the continental shelf and exclusive economic zone of the
Argentine Republic only in relation to exploration and exploitation of natural
resources, and to tourism or recreation on off-shore
installations;
(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:
(i) the 12 nautical mile territorial sea, and
(ii) the
contiguous zone for purposes consistent with international law,
and
(iii) the continental shelf and exclusive economic zone of Australia
but only in relation to exploration for and exploitation of the living and
non-living natural resources, and in relation to tourism or recreation on
offshore installations;
(c) the term “Argentine tax” means
tax imposed by Argentina, being tax to which this Agreement applies by virtue of
Article 2;
(d) the term “Australian tax” means tax imposed
by Australia, being tax to which this Agreement applies by virtue of Article
2;
(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 “competent authority” means, in the
case of Argentina, the Ministry of Economy and Works and Public Services,
Secretariat of Finance (el Ministerio de Economia y Obras y Servicios
Publicos, Secretaria de Hacienda) and, in the case of Australia, the
Commissioner of Taxation or an authorised representative of the
Commissioner;
(g) the terms “a Contracting State” and
“other Contracting State” mean Argentina or Australia, as the
context requires;
(h) the terms “enterprise of a Contracting
State” 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 Argentina, as the context requires;
(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 from a place or between places in the other
Contracting State;
(j) the term “person” includes an
individual, a company and any other body of persons;
(k) the term
“tax” means Australian tax or Argentine 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 As regards the
application of this Agreement by a Contracting State at any time, any term not
defined in this Agreement shall, unless the context otherwise requires, have the
meaning which it has at that time under the law of that State concerning the
taxes to which this Agreement applies.
1 For the purposes of this Agreement, a person is a resident of one of
the Contracting States if the person is a resident of that State under the law
of that State relating to its 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
person shall be deemed to be a resident solely of the Contracting State in which
a permanent home is available to the person, or if a permanent home is available
to the person in both Contracting States, or in neither of them, the person
shall be deemed to be a resident solely of the Contracting State with which the
person’s personal and economic relations are 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 it shall be deemed to be a resident
solely of the Contracting State in which its place of effective management is
situated.
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:
(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 the exploitation of natural
resources;
(g) an agricultural, pastoral or forestry property;
and
(h) a building site or construction, installation or assembly
project which exists for more than 6 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 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 the enterprise solely for the purpose of processing by
another enterprise; or
(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.
4 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 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) it performs services, including
consultancy or managerial services, in that Contracting State through employees
or other personnel engaged by the enterprise for such purpose, but only where
such activities continue in that State for the same project or a connected
project for a period or periods aggregating more than 183 days within any 12
month period; or
(c) substantial equipment is being used in that State
by, for or under contract with the enterprise.
5 A person acting in a
Contracting State for 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
firstmentioned 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.
6 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.
7 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.
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 a Contracting State, has the meaning
which it has under the law of that State and includes:
(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 paragraph 1 and paragraph 3 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.
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:
(a) that permanent establishment; or
(b) sales
within that other Contracting State of goods or merchandise of a similar kind as
sold, or other business activities carried on in that other State of the same or
similar kind as those carried on, through that permanent establishment, if it
may reasonably be concluded that those sales or business activities would not
have been made or carried on but for the existence of that permanent
establishment or the continued provision by it of goods or
services.
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 reasonably 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.
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) 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 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 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 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.
6 Where profits include items of income or gains 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.
7 Nothing in this Article shall affect the operation of any law
of a Contracting State relating to tax imposed on profits derived by an
enterprise of the other Contracting State from insurance or reinsurance 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.
8 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,
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.
1 Profits of an enterprise of a Contracting State derived from the
operation of ships or aircraft are taxable only in that
State.
2 Notwithstanding the provisions of paragraph 1, such profits may
be taxed in the other Contracting State to the extent that they are profits
derived directly or indirectly from ship or aircraft operations confined solely
to places in that other State.
3 The profits to which the provisions of
paragraph 1 and paragraph 2 apply include profits from the operation of ships or
aircraft derived through participation in a pool service or other profit sharing
arrangement.
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 firstmentioned State, and any other income incidental to such operation,
shall be treated as profits from the operation of ships or
aircraft.
5 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 State shall be treated as profits from ship or aircraft operations
confined solely to places in that State.
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 reasonably
be expected to operate between independent enterprises dealing wholly
independently with one another, then any profits which, but for those
conditions, might reasonably 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.
2 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, including determinations in cases where the information
available to the competent authority of that State is inadequate to determine
the profits which might reasonably be expected to accrue 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 reasonably
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
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.
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 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) in Australia:
(i) 10 per cent of the gross
amount of the dividends to the extent to which the dividends have been
“franked” in accordance with Australia’s law relating to tax,
if the dividends are paid to a person which holds directly at least 10 per cent
of the voting power of the company paying the dividends; and
(ii) 15 per
cent of the gross amount of the dividends in all other cases; and
(b) in
Argentina:
(i) 10 per cent of the gross amount of the dividends if the
dividends are paid to a person which holds directly at least 25 per cent of the
capital of the company paying the dividends; and
(ii) 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
Agreement is varied, otherwise than in minor respects so as to not affect its
general character, the Contracting States shall consult each other with a view
to facilitating any amendment of this paragraph as may be
appropriate.
3 The term “dividends” 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 laws of the 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 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 Article
14, as the case may be, shall apply.
5 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 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,
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 a company which is a resident of Australia for the purposes of
Australian tax and which is also a resident of Argentina for the purposes of
Argentine tax.
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 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 12 per cent of the gross amount of the
interest.
3 Notwithstanding the provisions of paragraph 2, interest
derived from the investment in a Contracting State of official reserve assets by
the government of the other Contracting State, a government monetary institution
or a bank performing central banking functions in that other State shall be
exempt from tax in the firstmentioned State.
4 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, interest from any
other form of indebtedness and all other income assimilated to income from money
lent by the law, relating to tax, of the Contracting State in which the income
arises. However, the term “interest” does not include income dealt
with in Article 8 or in Article 10.
5 The provisions of paragraph 2 shall
not apply if the person 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 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 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
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 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 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.
7 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 lastmentioned 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 Agreement.
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 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:
(a) 10 per cent of the gross
amount of the royalties in the case of payments or credits referred to
in:
(i) subparagraph 3(a), provided that this subparagraph 2(a) applies
only in relation to copyright of literary, dramatic, musical or other artistic
work;
(ii) subparagraphs 3(b)-(d); and
(iii) subparagraph 3(j)
that relate to any payment or credit referred to in subparagraphs 2(a)(i) or
(ii);
(b) 10 per cent of the net amount of the royalties in the case of
payments or credits referred to in subparagraph 3(e). For the purposes of this
subparagraph 2(b), the net amount of a royalty refers to the amount of payments
or credits remaining after the deduction of the expenses directly related to the
rendering of the technical assistance and the costs and expenses of any
equipment or material supplied by the provider of the assistance and for the
specific purpose of rendering such assistance; and
(c) 15 per cent of
the gross amount of the royalties in all other cases, including all copyright
other than that referred to in subparagraph 2(a)(i).
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 or other
intangible property, trademark or other like property or right;
or
(b) the use of, or the right to use, any industrial or scientific
equipment; or
(c) the supply of scientific, technical, or industrial,
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 rendering of any technical assistance not included in
subparagraph 3(d); 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, or other
means of reproduction for use in connection with television broadcasting or
radio broadcasting, transmitted by:
(i) satellite;
or
(ii) cable, optic fibre or similar technology; or
(h) the use
of, or the right to use:
(i) motion picture films; or
(ii) films
or video tapes for use in connection with television; or
(iii) tapes for
use in connection with radio broadcasting; or
(i) the use of, or the
right to use, any commercial equipment, and the supply of commercial knowledge
or information; or
(j) 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 paragraph 2 shall not apply if the person
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 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 or credited is effectively connected with that permanent
establishment or fixed base. In that 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
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 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 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.
6 Where, by reason of a special relationship between the payer
and the person 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
reasonably 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 lastmentioned amount. In that case the excess
part of the amount 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.
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 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 or trust
or other entity, where the value of the assets of that company, partnership,
trust, or other 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.
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 or pertains
to a fixed base available in that other State to a resident of the
firstmentioned 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.
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 by an enterprise of a Contracting State, shall be taxable only in
that 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 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 The situation of real property shall be determined for the purposes
of this Article in accordance with paragraph 3 of Article 6.
1 Income derived by an individual who is a resident of a Contracting
State in respect of professional services or other activities of an independent
character shall be taxable only in that State but such income may also be taxed
in the other Contracting State if the individual:
(a) has a fixed base
regularly available in the other Contracting State for the purpose of performing
the individual’s activities. If such a fixed base is available to the
individual, the income may be taxed in the other State but only so much of the
income as is attributable to that fixed base; or
(b) 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 fiscal period or year of income
concerned. If the individual is so present only so much of the income as is
attributable to the activities performed in the other State may be taxed in that
State.
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.
1 Subject to the provisions of Articles 16, 18, 19, 20 and 21,
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 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 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:
(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any 12 month period
commencing or ending in the fiscal period or year of income concerned, as the
case may be; 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.
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 an enterprise of a Contracting
State may be taxed in that State.
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.
1 Notwithstanding the provisions of Articles 14 and 15, income derived
by an entertainer who is a resident of a Contracting State (such as theatrical,
motion picture, radio or television artistes and musicians and sportspersons)
from the entertainer’s 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 Contracting State in which
the activities of the entertainer are exercised.
3 The provisions of
paragraphs 1 and 2 shall not apply to income derived from activities performed
in a Contracting State by an entertainer who is a resident of the other
Contracting State if the visit to the firstmentioned State is wholly or mainly
supported by public funds of the other Contracting State, its political
subdivisions or local authorities. In such a case, the income is taxable only in
the Contracting State in which the entertainer is resident.
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.
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 any 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
citizen 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 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 15 or Article 16, as the case may
be, shall apply.
1 Where a professor or teacher who is a resident of a Contracting State
visits the other Contracting State for a period not exceeding 2 years for the
purpose of teaching or carrying out advanced study or research at a university,
college, school or other educational institution wholly or mainly supported by
public funds in that other State, any remuneration the person receives for such
teaching, advanced study or research shall be exempt from tax in that other
State to the extent to which that remuneration is, or upon the application of
this Article will be, subject to tax in the firstmentioned 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 specific persons.
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.
1 Items of income of a resident of a Contracting State, wherever
arising, not dealt with in the foregoing Articles of this Agreement shall be
taxable only in that State.
2 However, any such income derived by a
resident of a Contracting State from sources in the other Contracting State may
also be taxed in that other State.
3 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 Article 14, as the case may be, shall apply.
1 Income, profits or gains derived by a resident of a 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.
2 Income, profits or gains derived by a
resident of a 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 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.
1 In Australia:
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), Argentine tax paid under the
law of Argentina 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 Argentina shall be allowed as a credit against
Australian tax payable in respect of that income.
2 In
Argentina:
Where a resident of Argentina derives income which, in
accordance with the provisions of this Agreement, may be taxed in Australia,
Argentina shall allow as a deduction from the tax on the income of that resident
an amount equal to the income tax paid in Australia.
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.
3 Where under this Agreement income is 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, is subject to tax by reference to that part
of the income which is remitted to or received in that other State and not by
reference to its full amount, the relief allowed under this Agreement in the
firstmentioned State shall apply only to so much of the income as is remitted to
or received in, and is subject to tax in, the other State.
4 For the
purposes of paragraph 1, tax payable in Argentina by a company which is a
resident of Australia in respect of profits attributable to manufacturing
activities or to the exploration for or exploitation of natural resources
carried on by it in Argentina shall be deemed to include any amount which would
have been payable as Argentine tax for any tax year but for an exemption from,
or reduction of, tax granted for that year or any part thereof under specific
provisions of Argentine legislation that the Treasurer of Australia and the
Minister of Economy and Works and Public Services of Argentina in letters
exchanged for this purpose agree should be covered by this paragraph 4. Subject
to its terms, such an agreement on applicable provisions shall be valid for as
long as those provisions are not modified after the date of that agreement or
have been modified only in minor respects so as not to affect their general
character. The period for which that agreement is to apply is to be agreed in
those letters.
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 this Agreement, the person may, irrespective of the remedies
provided by the domestic law of those States concerning taxes to which this
Agreement 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 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 a satisfactory solution, to resolve the case with the
competent authority of the other Contracting State, with a view to the avoidance
of taxation which is not in accordance with 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 this Agreement. They may also consult
together for the elimination of double taxation in cases not provided for in
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.
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 laws of the Contracting States concerning taxes to
which this Agreement applies insofar as the taxation under those laws is not
contrary to this Agreement. 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) 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. They may
disclose the information in public court proceedings or in judicial
decisions.
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 law or the administrative practice
of that or of the other Contracting State; or
(b) to supply information
which is not obtainable under the law or in the normal course of the
administration of that or of the other Contracting State; or
(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.
Nothing in this Agreement shall affect the fiscal privileges of members
of diplomatic missions and consular posts under the general rules of
international law or under the provisions of special international
agreements.
Both Contracting States shall notify each other in writing of the
completion of their respective statutory and constitutional procedures required
for the entry into force of this Agreement. This Agreement shall enter into
force on the date of the last notification, and thereupon this Agreement shall
have effect:
(a) in Australia:
(i) in respect of withholding tax
on income that is derived by a nonresident, in relation to income derived on or
after 1 January in the calendar year next following that in which the Agreement
enters into force;
(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 Agreement enters into
force;
(iii) in respect of income, profits or gains from the operation
of aircraft to which Article 8 or paragraph 4 of Article 13 of this Agreement
applies, in relation to tax on such income, profits or gains of any year of
income beginning on or after 27 September 1988;
(b) in
Argentina:
(i) in respect of taxes withheld at source, on income derived
on or after 1 January in the calendar year next following that in which the
Agreement enters into force;
(ii) in respect of other Argentine tax, in
relation to tax chargeable for any tax year beginning on or after 1 January in
the calendar year next following that in which the Agreement enters into
force;
(iii) in respect of income, profits or gains from the operation
of aircraft to which Article 8 or paragraph 4 of Article 13 of this Agreement
applies, in relation to tax on such income, profits or gains of any year of
income beginning on or after 27 September 1988.
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:
(i) in respect of withholding tax
on income that is derived by a nonresident, 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;
(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 notice of
termination is given;
(b) in Argentina:
(i) in respect of taxes
withheld at source, in relation to amounts derived on or after 1 January in the
calendar year next following that in which the notice of termination is
given;
(ii) in respect of other Argentine tax, in relation to tax
chargeable for any taxable year beginning on or after 1 January 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 Agreement.
DONE at Buenos Aires, this
twenty-seventh day of August, 1999, in duplicate in the English and Spanish
languages, both texts being equally authentic.
FOR THE GOVERNMENT OF FOR
THE GOVERNMENT OF
AUSTRALIA: THE ARGENTINE REPUBLIC:
MARK
VAILE ANDRES CISNEROS
[Signatures omitted]
THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE ARGENTINE
REPUBLIC
Have agreed at the signing of the Agreement 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 Agreement (in this Protocol referred to
as “the Agreement”).
1 With respect to Article
7:
(a) nothing in the Agreement shall be construed as preventing a
Contracting State from imposing on the profits attributable to a permanent
establishment in that Contracting State, being a permanent establishment of a
company which is a resident of the other Contracting State, a tax in addition to
the tax which would be payable on the profits of a company which is a resident
of the firstmentioned State, provided that any such additional tax shall not
exceed 10 per cent of the amount by which the profits attributable to that
permanent establishment for a year of income exceeds the tax payable on those
profits to the firstmentioned State.
(b) in relation to paragraph
3:
(i) it is understood that a Contracting State shall not be required
to allow the total deduction of certain expenses where they are limited in some
way in the determination of profits under its domestic tax law or to allow the
deduction of any expenditure which, by reason of its nature, is not generally
allowed as a deduction under its domestic tax law; and
(ii) no deduction
shall be allowed in respect of amounts, if any, paid otherwise than towards
reimbursement of actual expenses by the permanent establishment to the head
office of the enterprise or any of its other offices, by way of royalties, fees
or other similar payments in return for the use of patents or other rights, or
by way of commission, for specific services performed or for management, or,
except in the case of a banking enterprise, by way of interest on money lent to
the permanent establishment. No deduction shall be allowed, in the determination
of the profits of a permanent establishment, in respect of amounts received by
the permanent establishment otherwise than towards reimbursement of actual
expenses from the head office of the enterprise or any other of its branch
offices, by way of royalties, fees or other similar payments in return for the
use of patents or other rights, or by way of commission, for specific services
performed or for management, or, except in the case of a banking enterprise, by
way of interest on money lent to the head office of the enterprise or any of its
other branch offices.
(c) in relation to paragraph 4, the export of
goods or merchandise purchased by an enterprise shall, notwithstanding the
provisions of subparagraph (d) of paragraph 3 of Article 5 of the Agreement,
remain subject to the domestic legislation concerning export.
2 With
respect to Article 8, and for the avoidance of doubt, it is understood that the
operation of ships or aircraft referred to in that Article includes
non-transport activities, such as dredging, fishing, and surveying and that such
activities conducted in a place or places in a Contracting State are to be
treated as ship or aircraft operations confined solely to places in that
State.
3 With respect to Article 12:
(a) the limitations on the
taxation at source provided for under paragraph 2 are, in the case of Argentina,
subject to the registration requirements provided for in its domestic
law;
(b) in the case of Argentina, royalties also includes any payment
derived from the transfer of news by an international news agency but if a
resident of Australia is beneficially entitled to that payment the tax charged
shall not exceed 3 per cent of the gross amount of the payment.
4 With
respect to Article 24:
(a) in relation to paragraph 4, it is understood
that if the Treasurer of Australia does not agree that tax forgone by Argentina
under an exemption from or reduction of tax granted under specific provisions of
Argentine legislation should be deemed to have been Argentine tax paid for the
purposes of paragraph 1, Argentina shall apply the rules provided in Article 21
of the Income Tax Law (Law No. 20628 text approved in 1986 and its subsequent
modifications) in force at the date of signature of this
Agreement;
(b) it is also understood that the period for which tax
sparing agreed in an exchange of letters referred to in paragraph 4 is
applicable will be 5 years pursuant to the letters and any later years that may
be agreed in a further exchange of letters.
5 If, after the date of
signature of the Agreement, the Argentine Republic concludes a double tax
Agreement with a State that is a member country of the Organisation for Economic
Cooperation and Development, and the secondmentioned
Agreement:
(a) limits the rate of taxation on dividends to which, under
the firstmentioned Agreement, a 10 per cent limit applies to a rate that is
lower, or specifies a level of participation in the capital of the company lower
than 25 per cent, then the Contracting States shall consult each other with a
view to agreeing to a rate or level of participation that is lower than that
provided for in the firstmentioned Agreement;
(b) limits the rate of
taxation on interest to which, under the firstmentioned Agreement, a 12 per cent
limit applies to a rate that is lower than that provided for in the
firstmentioned Agreement, then the rate provided for in the secondmentioned
Agreement or 10 per cent (whichever is the greater) shall apply for the purposes
of paragraph 2 of Article 11 as from the date of entry into force of the
secondmentioned Agreement;
(c) limits the rate of taxation on royalties
to which, under the firstmentioned Agreement, a 15 per cent limit applies to a
rate that is lower than that provided for in the firstmentioned Agreement, then
the rate provided for in the secondmentioned Agreement or 10 per cent (whichever
is the greater) shall apply for the purposes of paragraph 2(b) of Article 12 as
from the date of entry into force of the secondmentioned Agreement.
IN
WITNESS WHEREOF the undersigned, duly authorised thereto by their respective
Governments, have signed this Protocol.
DONE at Buenos Aires, this
twenty-seventh day of August, 1999, in duplicate in the English and Spanish
languages, both texts being equally authentic.
FOR THE GOVERNMENT OF FOR
THE GOVERNMENT OF
AUSTRALIA: THE ARGENTINE REPUBLIC:
MARK
VAILE ANDRES CISNEROS
[Signatures omitted]