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Income Tax (International Agreements) Amendment Act 1983 No. 57 of 1983 - SCHEDULE 2
SCHEDULE 2
Section 14
SCHEDULES TO BE ADDED TO THE PRINCIPAL ACT
''SCHEDULE 19
Section 3
AGREEMENT
BETWEEN
THE GOVERNMENT OF AUSTRALIA
AND
THE GOVERNMENT OF THE REPUBLIC OF INDIA
FOR
THE AVOIDANCE OF DOUBLE TAXATION OF INCOME
DERIVED FROM INTERNATIONAL AIR TRANSPORT
The Government of Australia and the Government of the Republic of India,
Desiring to conclude an Agreement for the avoidance of double taxation of
income derived from international air transport,
Have agreed as follows:
Article 1
------ 1. The existing taxes to which this Agreement shall apply are-
(a) in the case of Australia:
the Australian income tax, including the additional tax upon the undistributed
amount of the distributable income of a private company, (hereinafter referred
to as 'Australian tax');
(b) in the case of India:
(i) the income-tax including any surcharge thereon imposed under
the
Income-tax Act, 1961 (43 of 1961);
(ii) the surtax imposed under the Companies (Profits) Surtax Act,
1964 (7
of 1964),
(hereinafter referred to as 'Indian tax').
2. This Agreement shall also apply to any identical or substantially similar
taxes which are imposed after the date of signature of this Agreement in
addition to, or in place of, the taxes referred to in paragraph 1 of this
Article.
Article 2
------ 1. For the purposes of this Agreement, unless the context otherwise
requires-
(a) the term 'Australia' means the Commonwealth of Australia and, when
used
in a geographical sense, includes all Territories of Australia;
(b) the term 'India' means the territory of India as defined in the
Constitution and the laws of India;
(c) the terms 'Contracting State' and 'other Contracting State' mean
Australia or India, as the context requires;
(d) the term 'tax' means 'Australian tax' or 'Indian tax', as the context
requires;
(e) the term 'enterprise of a Contracting State' means an Australian
enterprise or an Indian enterprise, as the context requires;
(f) the term 'Australian enterprise' means an enterprise that has its
place
of effective management in Australia;
(g) the term 'Indian enterprise' means an enterprise that has its place of
effective management in India; and
(h) the term 'operation of aircraft in international traffic' means the
operation of aircraft in the carriage of persons, livestock, goods or mail
between-
(i) Australia and India;
(ii) Australia and any other country;
(iii) India and any other country;
(iv) countries other than Australia or India;
(v) places within a country other than Australia or India,
and, in relation to an enterprise engaged in the operation of aircraft for
such carriage, includes the sale of tickets for and the provision of services
connected with such carriage, either for the enterprise itself or for any
other
enterprise engaged in the operation of aircraft for such carriage.
2. In the application of the provisions of this Agreement by a Contracting
State, any term used but not defined herein shall, unless the context
otherwise requires, have the meaning which it has under the laws in force in
that State relating to the taxes to which this Agreement applies.
Article 3
------ 1. Profits derived by an enterprise of a Contracting State from the
operation of aircraft in international traffic or arising from the carriage by
air of persons, livestock, goods or mail between places in that State, shall
be exempt from tax in the other Contracting State.
2. The provisions of paragraph 1 shall also apply to the share of profits from
the operation of aircraft in international traffic derived by an enterprise of
a Contracting State through participation in a pooled service, in a joint air
transport operation or in an international operating agency.
3. For the purpose of paragraph 1, interest on funds connected with the
operation of aircraft in international traffic derived by an enterprise of a
Contracting State engaged in such operation shall be regarded as income from
the operation of aircraft in international traffic.
Article 4
------ 1. This Agreement shall come into operation on the thirtieth day after
the date on which the Government of Australia and the Government of the
Republic of India exchange notes through the diplomatic channel notifying each
other that the last of such things has been done as is necessary to give this
Agreement the force of law in Australia and India respectively. The exchange
of notes shall take place at New Delhi.
2. The provisions of this Agreement shall have effect in respect of income
derived on or after 1 April 1975.
Article 5
------
This Agreement shall continue in effect indefinitely but either Contracting
State may, on or before 30 June in any calendar year after the year 1986, give
written notice of termination to the other Contracting State through the
diplomatic channel and in such event this Agreement shall cease to be
effective in respect of income derived on or after 1 April in the calendar
year next following the year in which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, duly authorised thereto by their
respective Governments, have signed the present Agreement.
DONE in duplicate at Canberra this thirty-first day of May one thousand nine
hundred and eighty-three in the English and Hindi languages, the English text
to prevail in the case of inconsistency.
J. S. DAWKINS D. KAMTEKAR
FOR THE GOVERNMENT FOR THE GOVERNMENT
OF
OF AUSTRALIA THE REPUBLIC OF INDIA
----------
''SCHEDULE 20
Section 3
AGREEMENT
BETWEEN
THE GOVERNMENT OF AUSTRALIA
AND
THE GOVERNMENT OF IRELAND
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
AND CAPITAL GAINS
The Government of Australia and the Government of Ireland, Desiring to
conclude an Agreement for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income and capital gains,
Have agreed as follows:
ARTICLE 1
Personal Scope
------------
This Agreement shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
------------ (1) The existing taxes to which this Agreement shall apply are-
(a) in Australia:
the Australian income tax, including the additional tax upon the
undistributed amount of the distributable income of a private company;
(b) in Ireland:
(i) the income tax;
(ii) the corporation tax; and
(iii) the capital gains tax.
(2) This Agreement shall also apply to any identical or substantially similar
taxes which are imposed by either Contracting State after the date of
signature of this Agreement in addition to, or in place of, the existing
taxes. As soon as possible after the end of each calendar year, the competent
authority of each Contracting State shall notify the competent authority of
the other Contracting State of any substantial changes which have been made in
the laws of the State relating to the taxes to which this Agreement applies.
ARTICLE 3
General Definitions
---------------- (1) In this Agreement, unless the context otherwise requires-
(a) the term 'Australia' means the Commonwealth of Australia and, when
used
in a geographical sense, includes-
(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 Coral Sea Islands Territory; and
(vi) any area adjacent to the territorial limits of Australia or of
the
said Territories in respect of which there is for the time being in force,
consistently with international law, a law of Australia or of a State or part
of Australia or of a Territory aforesaid dealing with the exploitation of any
of
the natural resources of the sea-bed and subsoil of the continental shelf;
(b) the term 'Ireland' includes any area outside the territorial waters of
Ireland which in accordance with international law has been or may hereafter
be
designated, under the laws of Ireland concerning the Continental Shelf, as an
area within which the rights of Ireland with respect to the sea-bed and
subsoil
and their natural resources may be exercised;
(c) the terms 'Contracting State', 'one of the Contracting States' and
'the
other Contracting State' mean Australia or Ireland, as the context requires;
(d) the term 'person' includes an individual, a company and any other body
of persons;
(e) the term 'company' means any body corporate or any entity which is
assimilated to a body corporate for tax purposes;
(f) the terms 'enterprise of one of the Contracting States' and
'enterprise
of the other Contracting State' mean an enterprise carried on by a resident of
Australia or an enterprise carried on by a resident of Ireland, as the context
requires;
(g) the term 'tax' means Australian tax or Irish tax, as the context
requires;
(h) the term 'Australian tax' means tax imposed by Australia, being tax to
which this Agreement applies by virtue of Article 2;
(i) the term 'Irish tax' means tax imposed by Ireland, being tax to
which
this Agreement applies by virtue of Article 2;
(j) the term 'competent authority' means:
(i) in the case of Australia, the Commissioner of Taxation or his
authorised representative;
(ii) in the case of Ireland, the Revenue Commissioners or their
authorised representative.
(2) In this Agreement, the terms 'Australian tax' and 'Irish tax' do not
include any penalty or interest imposed under the law of either Contracting
State relating to the taxes to which this Agreement applies by virtue of
Article 2.
(3) In the application of this Agreement by a Contracting State, any term not
defined in this Agreement shall, unless the context otherwise requires, have
the meaning which it has under the laws of that State relating to the taxes to
which this Agreement applies.
ARTICLE 4
Residence
-------- (1) For the purposes of this Agreement, a person is a resident of one
of the Contracting States-
(a) in the case of Australia, subject to the provisions of paragraph (2)
of
this Article, if the person is a resident of Australia for the purposes of
Australian tax; and
(b) in the case of Ireland, if the person is liable to tax therein by
reason
of his domicile, residence, place of management or any other criterion of a
similar nature but not if he is liable to tax in Ireland in respect only of
income for sources therein.
(2) In relation to income from sources in Ireland a person who is subject to
Australian tax on income which is from sources in Australia shall not be
treated as a resident of Australia unless the income from sources in Ireland
is subject to Australian tax or, if that income is exempt from Australian tax,
it is so exempt solely because it is subject to Irish tax.
(3) Where by reason of the preceding provisions of this Article an individual
is a resident of both Contracting States, then his status shall be determined
in accordance with the following rules:
(a) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him;
(b) if he has a permanent home available to him in both Contracting
States,
or if he does not have a permanent home available to him in either of them, he
shall be deemed to be a resident solely of the Contracting State in which he
has an habitual abode;
(c) if he has an habitual abode in both Contracting States, or if he does
not have an habitual abode in either of them, he shall be deemed to be
a resident
solely of the Contracting State with which his personal and economic relations
are the closer.
(4) Where by reason of the provisions of paragraph (1) of this Article, a
person other than an individual is a resident of both Contracting States, then
it shall be deemed to be a resident solely of the Contracting State in which
its place of effective management is situated.
ARTICLE 5
Permanent Establishment
-------------------- (1) For the purposes of this Agreement, the term
'permanent establishment' means a fixed place of business through which the
business of an enterprise is wholly or partly carried on.
(2) The term 'permanent establishment' shall include especially-
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, 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 twelve months;
(i) an installation or structure used for the exploration of
natural
resources.
(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;
(b) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or for collecting information, for the
enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of
activities which have a preparatory or auxiliary character for the enterprise,
such as advertising or scientific research.
(4) An enterprise shall be deemed to have a permanent establishment in one of
the Contracting States and to carry on business through that permanent
establishment if-
(a) it carries on supervisory activities in that State for more than
twelve
months in connection with a building site, or a construction, installation or
assembly project which is being undertaken in that State;
(b) substantial equipment is being used in that State by, for or under
contract with the enterprise; or
(c) it carries on activities in that State in connection with the
exploration or exploitation of the sea-bed, subsoil or their natural
resources in that
State.
(5) A person acting in one of the Contracting States on behalf of an
enterprise of the other Contracting State-other than an agent of an
independent status to whom paragraph (6) of this Article applies-shall be
deemed to be a permanent establishment of that enterprise in the
first-mentioned State if-
(a) he has, and habitually exercises in that State, an authority to
conclude
contracts on behalf of the enterprise, unless his activities are limited to
the
purchase of goods or merchandise for the enterprise; or
(b) in so acting, he manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise, provided that
this
provision shall apply only in relation to the goods or merchandise so
manufactured or processed.
(6) An enterprise of one of the Contracting States shall not be deemed to have
a permanent establishment in the other Contracting State merely because it
carries on business in that other State through a broker, general commission
agent or any other agent of an independent status, where that person is acting
in the ordinary course of his business as such a broker or agent.
(7) The fact that a company which is a resident of one of the Contracting
States controls or is controlled by a company which is a resident of the other
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 paragraphs (1) to (7) of this Article shall be
applied in determining for the purposes of paragraph (5) of Article 12 and
paragraph (5) of Article 13 whether there is a permanent establishment outside
both Contracting States, and whether an enterprise, not being an enterprise of
one of the Contracting States, has a permanent establishment in one of the
Contracting States.
ARTICLE 6
Limitation of Relief
----------------
Where under any provision of this Agreement income is relieved from tax in one
of the Contracting States and, under the law in force in the other Contracting
State-
(a) the income or a part thereof is exempt from tax; or
(b) a person, in respect of the said income, is subject to tax by
reference
to the amount thereof which is remitted to or received in that other State,
and
not by reference to the full amount thereof, then the relief to be allowed
under this Agreement in the first-mentioned State shall apply-
(c) where (a) above applies, only to so much of the income as is not
exempt
from tax in the other State; or
(d) where (b) above applies, only to so much of the income as is remitted
to
or received in the other State.
ARTICLE 7
Income from Real Property
--------------------- (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 laws
of
Australia, and shall also include-
(i) a lease of land and any other interest in or over land, whether
improved or not;
(ii) a right to receive variable or fixed payments as consideration
for
the working of, or the right to work, mineral deposits, oil or gas wells,
quarries or other places of extraction or exploitation of natural resources;
and
(b) in the case of Ireland, means immovable property according to the laws
of Ireland, and shall also include-
(i) property accessory to immovable property;
(ii) rights to which the provisions of the general law respecting
landed
property apply;
(iii) usufruct of immovable property; and
(iv) a right to receive variable or fixed payments as consideration
for
the working of, or the right to work, mineral deposits, oil or gas wells,
quarries or other places of extraction or exploitation of natural resources.
Ships, boats and aircraft shall not be regarded as real property.
(3) The provisions of paragraph (1) of this Article shall apply to income
derived from the direct use, letting or use in any other form of real
property.
(4) A lease of land, any other interest in or over land and any right referred
to in any of the subparagraphs of paragraph (2) of this Article shall be
regarded as situated where the land, mineral deposits, oil or gas wells,
quarries or natural resources as the case may be, are situated.
(5) The provisions of paragraphs (1), (3) and (4) of this Article shall also
apply to income from real property of an enterprise and to income from real
property used for the performance of professional services.
ARTICLE 8
Business Profits
------------ (1) The profits of an enterprise of one of the Contracting States
shall be taxable only in that State unless the enterprise carries on business
in the other Contracting State through a permanent establishment situated
therein. If the enterprise carries on business as aforesaid, the profits of
the enterprise may be taxed in the other State, but only so much of them as is
attributable to that permanent establishment.
(2) Subject to the provisions of paragraph (3) of this Article, where an
enterprise of one of the Contracting States carries on business in the other
Contracting State through a permanent establishment situated therein, there
shall in each Contracting State be attributed to that permanent establishment
the profits which it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities under the same
or similar conditions and dealing wholly independently with the enterprise of
which it is a permanent establishment or with other enterprises with which it
deals.
(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) If the information available to the competent authority of a Contracting
State is inadequate to determine the profits to be attributed to the permanent
establishment of an enterprise, nothing in this Article shall affect the
application of any law of that State relating to the determination of the tax
liability of a person provided that that law shall be applied, so far as the
information available to the competent authority permits, in accordance with
the principles of this Article.
(6) Where profits include items of income which are dealt with separately in
other Articles of this Agreement, then the provisions of those Articles shall
not be affected by the provisions of this Article.
(7) Nothing in this Article shall apply to either Contracting State to prevent
the operation in the Contracting State of any provision of its law relating
specifically to the taxation of any person who carries on a business of any
form of insurance.
ARTICLE 9
Shipping and Air Transport
--------------------- (1) Profits from the operation of ships or aircraft
derived by a resident of one of the Contracting States shall be taxable only
in that State.
(2) Notwithstanding the provisions of paragraph (1) of this Article, 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) of this Article shall apply in
relation to the share of the profits from the operation of ships or aircraft
derived by a resident of one of the Contracting States through participation
in a pool service, in a joint transport operating organization or in an
international operating agency.
(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.
ARTICLE 10
Associated Enterprises
----------------- (1) Where-
(a) an enterprise of one of the Contracting States participates directly
or
indirectly in the management, control or capital of an enterprise of the other
Contracting State; or
(b) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of one of the Contracting States and an
enterprise of the other Contracting State,
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) If the information available to the competent authority of a Contracting
State is inadequate to determine the profits to be attributed to an
enterprise, nothing in this Article shall affect the application of any law of
that State relating to the determination of the tax liability of a person,
provided that that law shall be applied, so far as the information available
to the competent authority permits, in accordance with the principles of this
Article.
(3) Notwithstanding the provisions of this Article, an enterprise of one of
the Contracting States may be taxed by that Contracting State as if this
Article had not entered into force and had not had effect but, so far as it is
practicable to do so, in accordance with the principles of this Article.
(4) Where profits on which an enterprise of one of the Contracting States has
been charged to tax in that State are also included, by virtue of paragraphs
(1), (2) or (3) of this Article, in the profits of an enterprise of the other
Contracting State and taxed accordingly, and the profits so included are
profits which might have been expected to have accrued to that enterprise of
the other State if the conditions operative between the enterprises had been
those which might have been expected to have operated between independent
enterprises dealing wholly independently with one another, then the
first-mentioned State shall make an appropriate adjustment to the amount of
tax charged on those profits in the first-mentioned State. In determining such
an adjustment, due regard shall be had to the other provisions of this
Agreement and for this purpose the competent authorities of the Contracting
States shall if necessary consult each other.
(5) The provisions of paragraph (4) of this Article relating to an appropriate
adjustment are not applicable after the expiration of six years from the end
of the year of assessment or financial year, as the case may be, in respect of
which a Contracting State has charged to tax the profits to which the
adjustment would relate.
ARTICLE 11
Dividends
-------- (1) Dividends paid by a company which is a resident of Australia for
the purposes of Australian tax, being dividends to which a resident of Ireland
is beneficially entitled, may be taxed in Ireland. Such dividends may also be
taxed in Australia, according to the law of Australia, but the tax so charged
shall not exceed 15 per cent of the gross amount of the dividends.
(2) (a) Dividends paid by a company which is a resident of Ireland for the
purposes of Irish tax, being dividends to which a resident of Australia is
beneficially entitled, may be taxed in Australia.
(b) Where a resident of Australia is entitled to a tax credit in respect
of a dividend under paragraph (3) of this Article, tax may also be
charged in Ireland and according to the laws of Ireland on the
aggregate of the amount or value of that dividend and the amount of
that tax credit at a rate not exceeding 15 per cent.
(c) Except as aforesaid, dividends paid by a company which is a resident
of Ireland for the purposes of Irish tax, being dividends to which a
resident of Australia is beneficially entitled, shall be exempt from
any tax in Ireland which is chargeable on dividends.
(3) A resident of Australia who receives dividends from a company which is a
resident of Ireland shall, subject to the provisions of paragraph (4) of this
Article and provided he is the beneficial owner of the dividends, be entitled
to the tax credit in respect thereof to which an individual resident in
Ireland would have been entitled had he received those dividends, and to the
payment of any excess of that tax credit over his liability to Irish tax. Any
such credit shall be treated for the purposes of Australian tax as assessable
income from sources in Ireland.
(4) The provisions of paragraph (3) of this Article shall not apply where the
beneficial owner of the dividends (being a company) is, or is associated with,
a company which either alone or together with one or more associated companies
controls directly or indirectly 10 per cent or more of the voting power in the
company paying the dividends. For the purposes of this paragraph two companies
shall be deemed to be associated if one controls directly or indirectly more
than 50 per cent of the voting power in the other company, or a third company
controls more than 50 per cent of the voting power in both of them.
(5) The term 'dividends' in this Article means income from shares and includes
any income or distribution assimilated to income from shares under the
taxation law of the Contracting State of which the company paying the
dividends or income or making the distribution is a resident.
(6) Where the company paying a dividend is a resident of one of the
Contracting States and the beneficial owner of the dividend, being a resident
of the other Contracting State, owns 10 per cent or more of the class of
shares in respect of which the dividend is paid, paragraphs (2) and (3) of
this Article shall not apply to the dividend to the extent that it can have
been paid only out of profits which the company paying the dividend earned or
other income which it received in a period ending 12 months or more before the
relevant date. For the purposes of this paragraph the term 'relevant date'
means the date on which the beneficial owner of the dividend became the owner
of 10 per cent or more of the class of shares in question: provided that this
paragraph shall not apply if the shares were acquired for bona fide commercial
reasons and not primarily for the purpose of securing the benefit of this
Article.
(7) The provisions of paragraphs (1), (2) and (3) of this Article shall not
apply if the person beneficially entitled to the dividends, being a resident
of one of the Contracting States, carries on business in the other Contracting
State of which the company paying the dividends is a resident, through a
permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is effectively connected
with such permanent establishment or fixed base. In such a case, the
provisions of Article 8 or Article 15, as the case may be, shall apply.
(8) Dividends paid by a company which is a resident of one of the Contracting
States, being dividends to which a person who is not a resident of the other
Contracting State is beneficially entitled, shall be exempt from tax in that
other State except insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or fixed base
situated in that other State: provided that this paragraph shall not apply in
relation to dividends paid by any company which is a resident of Australia for
the purposes of Australian tax and which is also a resident of Ireland for the
purposes of Irish tax.
ARTICLE 12
Interest
------ (1) Interest arising in one of the Contracting States, being interest
to which a resident of the other Contracting State is beneficially entitled,
may be taxed in that other State.
(2) Such interest may be taxed in the Contracting State in which it arises,
and according to the law of that State, but the tax so charged shall not
exceed 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, and interest from
any other form of indebtedness as well as all other income assimilated to
income from money lent by the taxation law of the Contracting State in which
the income arises but does not include any income which is treated as a
dividend under Article 11.
(4) The provisions of paragraphs (1) and (2) of this Article shall not apply
if the person beneficially entitled to the interest, being a resident of one
of the Contracting States, carries on business in the other Contracting State,
in which the interest arises, through a permanent establishment situated
therein, or performs in that other State independent personal services from a
fixed base situated therein, and the indebtedness in respect of which the
interest is paid is effectively connected with such permanent establishment or
fixed base. In such a case, the provisions of Article 8 or Article 15, 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 he is a resident of a
Contracting State or not, has in a Contracting State or outside both
Contracting States a permanent establishment or fixed base in connection with
which the indebtedness on which the interest is paid was incurred, and such
interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
(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
such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
interest paid shall remain taxable according to the law of each Contracting
State, but subject to the other provisions of this Agreement.
(7) The provisions of this Article shall not apply if the indebtedness in
respect of which the interest is paid was created or assigned mainly for the
purpose of taking advantage of this Article and not for bona fide commercial
reasons.
ARTICLE 13
Royalties
------- (1) Royalties arising in one of the Contracting States, being
royalties to which a resident of the other Contracting State is beneficially
entitled, may be taxed in that other State.
(2) Such royalties may be taxed in the Contracting State in which they arise,
and according to the law of that State, but the tax so charged shall not
exceed 10 per cent of the gross amount of the royalties.
(3) The term 'royalties' in this Article means payments or credits, whether
periodical or not, and however described or computed, to the extent to which
they are made as consideration for-
(a) the use of, or the right to use, any copyright, patent, design or
model,
plan, secret formula or process, trademark, or other like property or right;
(b) the use of, or the right to use, any industrial, commercial or
scientific equipment;
(c) the supply of scientific, technical, industrial or commercial
knowledge
or information;
(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);
(e) the use of, or the right to use-
(i) motion picture films;
(ii) films or video tapes for use in connection with television; or
(iii) tapes for use in connection with radio broadcasting; or
(f) total or partial forbearance in respect of the use of a property or
right referred to in this paragraph.
(4) The provisions of paragraphs (1) and (2) of this Article shall not apply
if the person beneficially entitled to the royalties, being a resident of one
of the Contracting States, carries on business in the other Contracting State,
in which the royalties arise, through a permanent establishment situated
therein, or performs in that other State independent personal services from a
fixed base situated therein, and the right or property in respect of which the
royalties are paid or credited is effectively connected with such permanent
establishment or fixed base. In such a case, the provisions of Article 8 or
Article 15, as the case 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 he is a resident of a
Contracting State or not, has in a Contracting State or outside both
Contracting States a permanent establishment or fixed base in connection with
which the 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 last-mentioned 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, but subject to the other provisions of this Agreement.
(7) The provisions of this Article shall not apply if the right or property in
respect of which the royalties were paid or credited was created or assigned
mainly for the purpose of taking advantage of this Article and not for bona
fide commercial reasons.
ARTICLE 14
Alienation of Property
----------------- (1) Income or gains from the alienation of real property may
be taxed in the Contracting State in which that property is situated.
(2) For the purposes of this Article-
(a) the term 'gains' means, in the case of Ireland, chargeable gains as
defined in the taxation law of Ireland;
(b) the term 'real property' shall include-
(i) a lease of land or any other interest in or over land;
(ii) rights to exploit, or to explore for, natural resources;
(iii) shares or comparable interests in a company the assets of which
consist wholly or principally of interests in or over land in one of the
Contracting States or of rights to exploit, or to explore for, natural
resources in one of the Contracting States;
(iv) any partnership interest, or any interest in settled property
deriving its value or the greater part of its value directly or indirectly
from
interests in or over land in one of the Contracting States or rights to
exploit, or to explore for, natural resources in one of the Contracting
States; and
(v) any option, consent or embargo affecting the disposition of
interests
in or over land in one of the Contracting States or rights to exploit, or to
explore for, natural resources in one of the Contracting States; and
(c) real property shall be deemed to be situated-
(i) where it consists of interests in or over land-in the
Contracting
State in which the land is situated;
(ii) where it consists of rights to exploit, or to explore for,
natural
resources-in the Contracting State in which the natural resources are situated
or the exploration may take place; and
(iii) where it consists of shares or comparable interests in a
company
referred to in clause (iii) of subparagraph (b) of this paragraph, a
partnership interest or an interest in settled property referred to in clause
(iv) of the
said subparagraph, or an option, consent or embargo referred to in clause (v)
of the said subparagraph-in the Contracting State in which the land or natural
resources are wholly or principally situated or the exploration may take
place.
(3) Subject to the provisions of paragraph (1) of this Article, income or
gains from the alienation of capital assets of an enterprise of one of the
Contracting States or of capital assets available to a resident of one of the
Contracting States for the purpose of performing professional services or
other independent activities shall be taxable only in that State, but, where
those assets form the whole or part of the business property of a permanent
establishment or fixed base situated in the other Contracting State, such
income or gains may be taxed in that other State.
(4) Income or gains derived by an enterprise of one of the Contracting States
from the alienation of ships or aircraft operated in international traffic
while owned by that enterprise shall be taxable only in that State.
ARTICLE 15
Independent Personal Services
------------------------ (1) Income derived by an individual who is a resident
of one of the Contracting States in respect of professional services or other
independent activities of a similar character shall be taxable only in that
State unless he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities. If he has such
a fixed base, the income may be taxed in the other State but only so much of
it as is attributable to activities exercised from that fixed base.
(2) The term 'professional services' includes services performed in the
exercise of independent scientific, literary, artistic, educational or
teaching activities as well as in the exercise of the independent activities
of physicians, lawyers, engineers, architects, dentists and accountants.
ARTICLE 16
Dependent Personal Services
---------------------- (1) Subject to the provisions of Articles 17, 19, 20
and 21, salaries, wages and other similar remuneration derived by an
individual who is a resident of one of the Contracting States in respect of an
employment shall be taxable only in that State unless the employment is
exercised in the other Contracting State. If the employment is so exercised,
such remuneration as is derived from that exercise may be taxed in that other
State.
(2) Notwithstanding the provisions of paragraph (1) of this Article,
remuneration derived by an individual who is a resident of one of the
Contracting States in respect of an employment exercised in the other
Contracting State shall be taxable only in the first-mentioned State if-
(a) the recipient is present in that other State for a period or periods
not
exceeding in the aggregate 183 days in the year of income or year of
assessment, as the case may be, of that other State; and
(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 in
respect of an employment exercised aboard a ship or aircraft operated in
international traffic by a resident of one of the Contracting States may be
taxed in that Contracting State.
ARTICLE 17
Directors' Fees
------------
Directors' fees and similar payments derived by a resident of one of the
Contracting States in his capacity as a member of the board of directors of a
company which is a resident of the other Contracting State may be taxed in
that other State.
ARTICLE 18
Entertainers
---------- (1) Notwithstanding the provisions of Articles 15 and 16, income
derived by entertainers (such as theatrical, motion picture, radio or
television artistes, musicians and athletes) from their personal activities as
such may be taxed in the Contracting State in which these activities are
exercised.
(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 8, 15 and 16, be taxed in the
Contracting State in which the activities of the entertainer are exercised.
ARTICLE 19
Pensions and Annuities
------------------ (1) Pensions (including government pensions) and annuities
paid to a resident of one of the Contracting States shall be taxable only in
that State.
(2) The term 'annuity' means a stated sum payable periodically at stated times
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 one of the Contracting
States and paid to a resident of the other Contracting State shall be taxable
only in the first-mentioned State.
ARTICLE 20
Government Service
---------------- (1) Remuneration (other than a pension or annuity) paid by
one of the Contracting States 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
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) of this Article shall not apply to
remuneration in respect of services rendered in connection with any trade or
business carried on by one of the Contracting States or a political
subdivision or local authority of that State. In such a case, the provisions
of Article 16 or Article 17, as the case may be, shall apply.
ARTICLE 21
Professors and Teachers
------------------ (1) Remuneration which a professor or teacher who is a
resident of one of the Contracting States and who visits the other Contracting
State for a period not exceeding two years for the purpose of teaching or
carrying out advanced study or research at a university, college, school or
other educational institution, receives for those activities shall be taxable
only in the first-mentioned State.
(2) This Article shall not apply to remuneration which a professor or teacher
receives for conducting research if the research is undertaken primarily for
the private benefit of a specific person or persons.
ARTICLE 22
Students
-------
Where a student, who is a resident of one of the Contracting States or who was
a resident of that State immediately before visiting the other Contracting
State and who is temporarily present in that other State solely for the
purpose of his education, receives payments from sources outside that other
State for the purpose of his maintenance or education, those payments shall be
exempt from tax in that other State.
ARTICLE 23
Income Not Expressly Mentioned
-------------------------- (1) Items of income of a resident of one of the
Contracting States which are not expressly mentioned in the foregoing Articles
of this Agreement shall be taxable only in that Contracting State.
(2) However, if such income is derived by a resident of one of the Contracting
States from sources in the other Contracting State, such income may also be
taxed in the Contracting State in which it arises.
(3) The provisions of paragraph (1) of this Article shall not apply to income
derived by a resident of one of the Contracting States where that income is
effectively connected with a permanent establishment or fixed base situated in
the other Contracting State. In such a case, the provisions of Article 8 or
Article 15, as the case may be, shall apply.
ARTICLE 24
Source of Income
------------- (1) Income or gains derived by a resident of one of the
Contracting States which, under any one or more of Articles 7 to 9, 11 to 19
and Article 23 may be taxed in the other Contracting State, shall for the
purposes of the taxation law of the other Contracting State be deemed to be
income or gains from sources in the other Contracting State.
(2) Income or gains derived by a resident of one of the Contracting States
which, under any one or more of Articles 7 to 9, 11 to 19 and Article 23 may
be taxed in the other Contracting State, shall for the purposes of Article 25
and of the taxation law of the first-mentioned Contracting State be deemed to
be income or gains from sources in the other Contracting State.
ARTICLE 25
Methods of Elimination of Double Taxation
---------------------------------- (1) (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), Irish tax paid under the law of Ireland and in accordance
with this Agreement, whether directly or by deduction, in respect of income
derived by a person who is a resident of Australia from sources in Ireland
(not
including, in the case of a dividend, tax paid in respect of the profits out
of
which the dividend is paid) shall be allowed as a credit against Australian
tax
payable in respect of that income;
(b) in the event that Australia should cease to allow a company which is a
resident of Australia a rebate in its assessment at the average rate of tax
payable by the company in respect of dividends derived from sources in Ireland
and included in the taxable income of the company, the Governments of the
Contracting States will enter into negotiations in order to establish new
provisions concerning the credit to be allowed by Australia against its tax on
the dividends.
(2) Subject to the provisions of the law of Ireland regarding the allowance as
a credit against Irish tax of tax payable in a territory outside Ireland
(which shall not affect the general principle hereof):
(a) Australian tax payable under the law of Australia and in accordance
with
this Agreement, whether directly or by deduction, on profits, income or
chargeable gains from sources within Australia (excluding in the case of a
dividend, tax payable in respect of the profits out of which the dividend is
paid) shall be allowed as a credit against any Irish tax computed by reference
to the same profits, income or chargeable gains by reference to which
Australian tax is computed;
(b) in the case of a dividend paid by a company which is a resident of
Australia to a company which is a resident of Ireland and which controls
directly or indirectly 10 per cent or more of the voting power in the company
paying the dividend, the credit shall take into account (in addition to any
Australian tax creditable under the provisions of subparagraph (a) of this
paragraph) the Australian tax payable by the company in respect of the profits
out of which such dividend is paid.
ARTICLE 26
Mutual Agreement Procedure
----------------------- (1) Where a resident of one of the Contracting States
considers that the actions of the competent authority of one or both of the
Contracting States result or will result for him in taxation not in accordance
with this Agreement, he may, notwithstanding the remedies provided by the
national laws of those States, present his case to the competent authority of
the Contracting State of which he is a resident. The case must be presented
within three years from the first notification of the action giving rise to
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 an appropriate solution,
to resolve the case with the competent authority of the other Contracting
State, with a view to the avoidance of taxation not in accordance with this
Agreement. Notwithstanding any time limits in the national laws of the
Contracting States, the solution so reached may be implemented within a period
of seven years from the date of presentation of the case by the resident to
the relevant competent authority in accordance with paragraph (1) of this
Article.
(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.
ARTICLE 27
Exchange of Information
------------------- (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 domestic laws of the Contracting States concerning the
taxes to which this Agreement applies insofar as the taxation thereunder is
not contrary to this Agreement. The exchange of information is not restricted
by Article 1. Any information received by the competent authority of a
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, 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) of this Article be
construed so as to impose on a Contracting State the obligation-
(a) to carry out administrative measures at variance with the laws or the
administative practice of that or of the other Contracting State;
(b) to supply particulars which are not obtainable under the laws or in
the
normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or to supply
information the disclosure of which would be contrary to public policy.
ARTICLE 28
Diplomatic and Consular Officials
--------------------------
Nothing in this Agreement shall affect the fiscal privileges of diplomatic or
consular officials under the general rules of international law or under the
provisions of special international agreements.
ARTICLE 29
Entry into Force
------------
This Agreement shall enter into force on the date on which the Government of
Australia and the Government of Ireland exchange notes through the diplomatic
channel notifying each other that the last of such things has been done as is
necessary to give this Agreement the force of law in Australia and in Ireland,
as the case may be, and thereupon this Agreement shall have effect-
(a) in Australia-
(i) with respect to withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 July in the calendar
year immediately following that in which the Agreement enters into force;
(ii) with respect to other Australian tax, in relation to income of
any
year of income beginning on or after 1 July in the calendar year immediately
following that in which the Agreement enters into force;
(b) in Ireland-
(i) with respect to income tax and capital gains tax, for any year
of
assessment beginning on or after 6 April in the calendar year immediately
following that in which the Agreement enters into force;
(ii) with respect to corporation tax, for any financial year
beginning on
or after 1 January in the calendar year immediately following that in which
the
Agreement enters into force.
ARTICLE 30
Termination
---------
This Agreement shall continue in effect indefinitely, but the Government of
Australia or the Government of Ireland may, on or before 30 June in any
calendar year beginning after the expiration of five years from the date of
its entry into force, give to the other Government through the diplomatic
channel written notice of termination and, in that event, this Agreement shall
cease to be effective-
(a) in Australia-
(i) with respect to withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 July in the calendar
year immediately following that in which the notice of termination is given;
(ii) with respect to other Australian tax, in relation to income of
any
year of income beginning on or after 1 July in the calendar year immediately
following that in which the notice of termination is given;
(b) in Ireland-
(i) with respect to income tax and capital gains tax, for any year
of
assessment beginning on or after 6 April in the calendar year immediately
following that in which the notice of termination is given;
(ii) with respect to corporation tax, for any financial year
beginning on
or after 1 January in the calendar year immediately following that in which
the
notice of termination is given.
IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this
Agreement and affixed thereto their seals.
DONE in duplicate at Canberra this thirty-first day of May One thousand nine
hundred and eighty-three in the English language.
J. S. DAWKINS JOSEPH SMALL
FOR THE GOVERNMENT FOR THE GOVERNMENT
OF AUSTRALIA OF IRELAND
----------------
''SCHEDULE 21
Section 3
CONVENTION
BETWEEN
AUSTRALIA
AND
THE REPUBLIC OF ITALY
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of Australia and the Government of the Republic of Italy,
Desiring to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income,
Have agreed as follows:
CHAPTER 1
SCOPE OF THE CONVENTION
ARTICLE 1
Personal Scope
------------
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
------------ (1) This Convention shall apply only to taxes on income imposed
on behalf of each Contracting State irrespective of the manner in which they
are levied.
(2) The existing taxes to which this Convention shall apply are-
(a) in the case of Australia:
the Australian income tax, including the additional tax upon the
undistributed amount of the distributable income of a private company;
(b) in the case of Italy:
(i) the individual income tax (l'imposta sul reddito delle persone
fisiche);
(ii) the corporate income tax (l'imposta sul reddito delle persone
giuridiche);
even if they are collected by withholding taxes at the source.
(3) The Convention shall apply to any identical or substantially similar taxes
which are imposed after the date of signature of this Convention in addition
to, or in place of, the existing taxes. The competent authorities of the
Contracting States shall notify to each other any significant changes which
have been made in their laws relating to the taxes to which this Convention
applies.
CHAPTER II
DEFINITIONS
ARTICLE 3
General Definitions
---------------- (1) In this Convention, unless the context otherwise
requires-
(a) the term 'Australia' means the Commonwealth of Australia and, when
used
in a geographical sense, includes-
(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 Coral Sea Islands Territory; and
(vi) any area adjacent to the territorial limits of Australia or of
the
said Territories in respect of which there is for the time being in force a
law
of Australia or of a State or part of Australia or of a Territory aforesaid
dealing with the exploitation of any of the natural resources of the sea-bed
and subsoil of the continental shelf;
(b) the term 'Italy' means the Republic of Italy and includes any area
beyond the territorial waters of Italy which, in accordance with the
laws of Italy
concerning the exploration for and exploitation of natural resources, may be
designated as an area within which the rights of Italy with respect to the
sea-bed and subsoil and natural resources may be exercised;
(c) the terms 'Contracting State', 'one of the Contracting States' and
'other Contracting State' mean Australia or Italy, as the context
requires;
(d) the term 'person' comprises an individual, a company and any other
body
of persons;
(e) the term 'company' means any body corporate or any entity which is
treated as a company or body corporate for tax purposes;
(f) the terms 'enterprise of one of the Contracting States' and
'enterprise
of the other Contracting State' mean an enterprise carried on by a resident of
Australia or an enterprise carried on by a resident of Italy, as the context
requires;
(g) the term 'tax' means Australian tax or Italian tax, as the context
requires;
(h) the term 'Australian tax' means tax imposed by Australia, being tax to
which this Convention applies by virtue of Article 2;
(i) the term 'Italian tax' means tax imposed by Italy, being tax to
which
this Convention applies by virtue of Article 2;
(j) the term 'competent authority' means, in the case of Australia, the
Commissioner of Taxation or his authorized representative, and in the case of
Italy, the Ministry of Finance.
(2) In this Convention, the terms 'Australian tax' and 'Italian tax' do not
include any penalty or interest imposed under the law of either Contracting
State relating to the taxes to which this Convention applies by virtue of
Article 2.
(3) In the application of this Convention by a Contracting State, any term not
otherwise defined shall, unless the context otherwise requires, have the
meaning which it has under the laws of that Contracting State relating to the
taxes to which this Convention applies.
ARTICLE 4
Residence
-------- (1) For the purposes of this Convention, a person is a resident of
one of the Contracting States-
(a) in the case of Australia, subject to paragraph (2), if the person is a
resident of Australia for the purposes of Australian tax; and
(b) in the case of Italy, if the person is a resident of Italy for the
purposes of Italian tax.
(2) In relation to income from sources in Italy, a person who is subject to
Australian tax on income which is from sources in Australia shall not be
treated as a resident of Australia unless the income from sources in Italy is
subject to Australian tax or, if that income is exempt from Australian tax, it
is so exempt solely because it is subject to Italian tax.
(3) Where by reason of the provisions of paragraph (1) an individual is a
resident of both Contracting States, then his status shall be determined in
accordance with the following rules:
(a) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him;
(b) if he has a permanent home available to him in both Contracting
States,
or if he does not have a permanent home available to him in either of them, he
shall be deemed to be a resident solely of the Contracting State in which he
has an habitual abode;
(c) if he has an habitual abode in both Contracting States, or if he does
not have an habitual abode in either of them, he shall be deemed to be
a resident
solely of the Contracting State with which his personal and economic relations
are the closer.
(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.
ARTICLE 5
Permanent Establishment
-------------------- (1) For the purposes of this Convention, the term
'permanent establishment' means a fixed place of business in which the
business of the enterprise is wholly or partly carried on.
(2) The term 'permanent establishment' shall include especially-
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or other place of extraction of natural resources;
(g) an agricultural, pastoral or forestry property;
(h) a building site or construction, installation or assembly project
which
exists for more than twelve months.
(3) The term 'permanent establishment' shall not be deemed to include-
(a) the use of facilities solely for the purpose of storage, display or
delivery of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or for collecting information, for the
enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of
activities which have a preparatory or auxiliary character for the enterprise,
such as advertising or scientific research.
(4) An enterprise shall be deemed to have a permanent establishment in one of
the Contracting States and to carry on business through that permanent
establishment if-
(a) it carries on supervisory activities in that State for more than
twelve
months in connection with a building site, or a construction, installation or
assembly project which is being undertaken in that State; or
(b) substantial equipment is being used in that State for more than twelve
months by, for or under contract with the enterprise in exploration for, or
the
exploitation of, natural resources, or in activities connected with such
exploration or exploitation.
(5) A person acting in one of the Contracting States on behalf of an
enterprise of the other Contracting State-other than an agent of an
independent status to whom paragraph (6) applies-shall be deemed to be a
permanent establishment of that enterprise in the first-mentioned State if-
(a) he has, and habitually exercises in that State, an authority to
conclude
contracts on behalf of the enterprise, unless his activities are limited to
the
purchase of goods or merchandise for the enterprise; or
(b) in so acting, he manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise provided that this
provision shall apply only in relation to the goods or merchandise so
manufactured or processed.
(6) An enterprise of one of the Contracting States shall not be deemed to have
a permanent establishment in the other Contracting State merely because it
carries on business in that other State through a broker, general commission
agent or any other agent of an independent status, where that person is acting
in the ordinary course of his business as such a broker or agent.
(7) The fact that a company which is a resident of one of the Contracting
States controls or is controlled by a company which is a resident of the other
Contracting State, or which carries on business in that other State (whether
through a permanent establishment or otherwise), shall not of itself
constitute either company a permanent establishment of the other.
(8) The principles set forth in paragraphs (1) to (7) inclusive shall be
applied in determining for the purposes of this Convention whether there is a
permanent establishment outside both Contracting States, and whether an
enterprise, not being an enterprise of one of the Contracting States, has a
permanent establishment in one of the Contracting States.
CHAPTER III
TAXATION OF INCOME
ARTICLE 6
Income from Real Property
--------------------- (1) Income from real property may be taxed in the
Contracting State in which such property is situated.
(2) The term 'real property' (beni immobili) shall have the meaning which it
has under the laws in force in the Contracting State in which the property in
question is situated. The term shall in any case include rights to royalties
and other payments in respect of the operation of mines or quarries or of the
exploitation of any natural resource and those rights shall be regarded as
situated where the land is situated. Ships, boats or aircraft shall not be
regarded as real property.
(3) The provisions of paragraph (1) shall apply to income derived from the
direct use, letting, or use in any other form of real property.
(4) Income from a lease of land and income from any other direct interest in
or over land, whether or not improved, shall be regarded as income from real
property situated where the land is situated.
(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the
income from real property of an enterprise and to income from real property
used for the performance of independent personal services.
ARTICLE 7
Business Profits
------------ (1) The profits of an enterprise of one of the Contracting States
shall be taxable only in that State unless the enterprise carries on business
in the other Contracting State through a permanent establishment situated
therein. If the enterprise carries on business as aforesaid, the profits of
the enterprise may be taxed in the other State, but only so much of them as is
attributable to that permanent establishment.
(2) Subject to the provisions of paragraph (3), where an enterprise of one of
the Contracting States carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each
Contracting State be attributed to that permanent establishment the 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 operation of any law of a
Contracting State relating to taxation of profits from insurance with
non-residents provided that if the relevant law in force in either State at
the date of signature of this Convention is varied (otherwise than in minor
respects so as not to affect its general character) the Contracting States
shall consult with each other with a view to agreeing to any amendment of this
paragraph that may be appropriate.
(6) For the purposes of this Article, the profits of an enterprise do not
include items of income which are dealt with separately in other Articles of
this Convention and the provisions of those Articles shall not be affected by
the provisions of this Article.
ARTICLE 8
Shipping and Aircraft
----------------- (1) Where profits are derived by a resident of one of the
Contracting States from the operation of ships and the place of the effective
management of the shipping enterprise is situated in that State, those profits
shall be taxable only in that State.
(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
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 derived by a resident of one
of the Contracting States through participation in a pool service, in a joint
transport operating organization or in an international operating agency.
(4) For the purpose of this Article, profits derived from the carriage by
ships of passengers, livestock, mail, goods or merchandise shipped in one of
the Contracting States for discharge at another place in that State shall be
treated as profits from operations of ships confined solely to places in that
State.
(5) If the place of effective management of a shipping enterprise is aboard a
ship, then it shall be deemed to be situated in the Contracting State in which
the home harbour of the ship is situated, or, if there is no such home
harbour, in the Contracting State of which the operator of the ship is a
resident.
(6) Nothing in this Convention shall affect the operation of the Agreement
between the Governments of the Contracting States for the avoidance of double
taxation of income derived from international air transport signed at Canberra
on 13 April 1972.
ARTICLE 9
Associated Enterprises
------------------ Where-
(a) an enterprise of one of the Contracting States participates directly
or
indirectly in the management, control or capital of an enterprise of the other
Contracting State; or
(b) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of one of the Contracting States and an
enterprise of the other Contracting State,
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.
ARTICLE 10
Dividends
-------- (1) Dividends paid by a company which is a resident of one of the
Contracting States for the purposes of its tax, being dividends to which a
resident of the other Contracting State is beneficially entitled, may be taxed
in that other State.
(2) Such dividends may be taxed in the Contracting State of which the company
paying the dividends is a resident for the purposes of its tax, and according
to the law of that State, but the tax so charged shall not exceed 15 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 taxation law of the
Contracting State of which the company making the distribution is a resident.
(4) The provisions of paragraphs (1) and (2) shall not apply if the person
beneficially entitled to the dividends, being a resident of one of the
Contracting States, carries on business in the other Contracting State of
which the company paying the dividends is a resident, through a permanent
establishment situated therein or performs in that other State independent
personal services from a fixed base situated therein, and the holding in
respect of which the dividends are paid is effectively connected with such
permanent establishment or fixed base. In such a case the dividends are
taxable in that other Contracting State according to its own law.
(5) Dividends paid by a company which is a resident of one of the Contracting
States, being dividends to which a person who is not a resident of the other
Contracting State is beneficially entitled, shall be exempt from tax in that
other State except insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or fixed base
situated in that other State. Provided that this paragraph shall not apply in
relation to dividends paid by any company which is a resident of Australia for
the purposes of Australian tax and which is also a resident of Italy for the
purposes of Italian tax.
ARTICLE 11
Interest
------ (1) Interest arising in one of the Contracting States, being interest
to which a resident of the other Contracting State is beneficially entitled,
may be taxed in that other State.
(2) Such interest may be taxed in the Contracting State in which it arises,
and according to the law of that State, but the tax so charged shall not
exceed 10 per cent of the gross amount of the interest.
(3) Notwithstanding the provisions of paragraph (2), interest derived by the
Government of one of the Contracting States or by a political or
administrative sub-division or a local authority thereof or by any other body
exercising public functions in, or in a part of, a Contracting State, or by a
bank performing central banking functions in a Contracting State, shall be
exempt from tax in the other Contracting State.
(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, and interest from
any other form of indebtedness as well as all other income assimilated to
income from money lent by the taxation law of the Contracting State in which
the income arises.
(5) The provisions of paragraphs (1) and (2) shall not apply if the person
beneficially entitled to the interest, being a resident of one of the
Contracting States, carries on business in the other Contracting State, in
which the interest arises, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed
base situated therein, and the indebtedness in respect of which the interest
is paid is effectively connected with such permanent establishment or fixed
base. In such a case, the interest is taxable in that other Contracting State
according to its own law.
(6) Interest shall be deemed to arise in one of the Contracting States when
the payer is that State itself or a political or administrative sub-division
of that State or a local authority of that State or a person who is a resident
of that State for the purposes of its tax. Where, however, the person paying
the interest, whether he is a resident of one of the Contracting States or
not, has in one of the Contracting States or outside both Contracting States a
permanent establishment or fixed base in connection with which the
indebtedness on which the interest is paid was incurred, and such interest is
borne by such permanent establishment or fixed base then such interest shall
be deemed to arise in the State in which the permanent establishment or fixed
base is situated.
(7) Where, owing to a special relationship between the payer and the person
beneficially entitled to the interest, or between both of them and some other
person, the amount of the interest paid, having regard to the indebtedness for
which it is paid, exceeds the amount which might have been expected to have
been agreed upon by the payer and the person so entitled in the absence of
such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
interest paid shall remain taxable according to the law of each Contracting
State, due regard being had to the other provisions of this Convention.
ARTICLE 12
Royalties
-------- (1) Royalties arising in one of the Contracting States, being
royalties to which a resident of the other Contracting State is beneficially
entitled, may be taxed in that other State.
(2) Such royalties may be taxed in the Contracting State in which they arise,
and according to the law of that State, but the tax so charged shall not
exceed 10 per cent of the gross amount of the royalties.
(3) The term 'royalties' in this Article means payments, whether periodical or
not, and however described or computed, to the extent to which they are paid
as consideration for the use of, or the right to use, any copyright, patent,
design or model, plan, secret formula or process, trade-mark, or other like
property or right, or industrial, commercial or scientific equipment, or for
the supply of scientific, technical, industrial or commercial knowledge or
information, or for the supply of any assistance of an ancillary and
subsidiary nature furnished as a means of enabling the application or
enjoyment of such knowledge or information or any other property or right to
which this Article applies, and includes any payments to the extent to which
they are paid as consideration for the use of, or the right to use, motion
picture films, films or video tapes for use in connection with television or
tapes for use in connection with radio broadcasting.
(4) The provisions of paragraphs (1) and (2) shall not apply if the person
beneficially entitled to the royalties, being a resident of one of the
Contracting States, carries on business in the other Contracting State, in
which the royalties arise, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed
base situated therein, and the right or property in respect of which the
royalties are paid is effectively connected with such permanent establishment
or fixed base. In such a case, the royalties are taxable in that other
Contracting State according to its own law.
(5) Royalties shall be deemed to arise in one of the Contracting States when
the payer is that Contracting State itself or a political or administrative
sub-division of that State or a local authority of that State or a person who
is a resident of that State for purposes of its tax. Where, however, the
person paying the royalties, whether he is a resident of one of the
Contracting States or not, has in one of the Contracting States or outside
both Contracting States a permanent establishment or fixed base in connection
with which the liability to pay the royalties was incurred, and the royalties
are borne by the permanent establishment or fixed base, then the royalties
shall be deemed to arise in the State in which the permanent establishment or
fixed base is situated.
(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, having regard to what they are paid
for, exceeds the amount which might have been expected to have been agreed
upon by the payer and the person so entitled in the absence of such
relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
royalties paid shall remain taxable according to the law of each Contracting
State, due regard being had to the other provisions of this Convention.
ARTICLE 13
Alienation of Property
------------------ (1) Income from the alienation of real property may be
taxed in the Contracting State in which that property is situated.
(2) For the purposes of this Article-
(a) the term 'real property' shall include-
(i) a lease of land or any other direct interest in or over land;
(ii) rights to exploit, or to explore for, natural resources; and
(iii) shares or comparable interest in a company, the assets of which
consist wholly or principally of direct interests in or over
land in one of the Contracting States or of rights to exploit,
or to explore for, natural resources in one of the Contracting
States.
(b) real property shall be deemed to be situated-
(i) where it consists of direct interests in or over land-in the
Contracting State in which the land is situated;
(ii) where it consists of rights to exploit, or to explore for,
natural resources-in the Contracting State in which the natural
resources are situated or the exploration may take place; and
(iii) where it consists of shares or comparable interests in a
company, the assets of which consist wholly or principally of
direct interests in or over land in one of the Contracting
States or of rights to exploit, or to explore for, natural
resources in one of the Contracting States-in the Contracting
State in which the assets or the principal assets of the
company are situated.
(3) Gains from the alienation of shares or corporate rights in a company which
is a resident of Italy for the purposes of Italian tax, derived by an
individual who is a resident of Australia, may be taxed in Italy.
ARTICLE 14
Independent Personal Services
------------------------ (1) Income derived by an individual who is a resident
of one of the Contracting States in respect of professional services or other
independent activities of a similar character shall be taxable only in that
State unless he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities. If he has such
a fixed base, the income may be taxed in the other State but only so much of
it as is attributable to activities exercised from that fixed base.
(2) The term 'professional services' includes especially services performed in
the exercise of independent scientific, literary, artistic, educational or
teaching activities as well as in the exercise of the independent activities
of physicians, lawyers, engineers, architects, dentists and accountants.
ARTICLE 15
Dependent Personal Services
----------------------- (1) Subject to the provisions of Articles 16, 18, 19
and 20 salaries, wages and other similar remuneration derived by an individual
who is a resident of one of the Contracting States in respect of an employment
shall be taxable only in that 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 one of the Contracting States in respect of
an employment exercised in the other Contracting State shall be taxable only
in the first-mentioned State if-
(a) the recipient is present in that other State for a period or periods
not
exceeding in the aggregate 183 days in the year of income or the fiscal year
as
the case may be, of that other State; and
(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 by a resident of one of the Contracting States in respect of an
employment exercised aboard a ship or aircraft in international traffic shall
be taxable only in that Contracting State.
ARTICLE 16
Directors' Fees
------------ Directors' fees and similar payments derived by a resident of one
of the Contracting States in his capacity as a member of the board of
directors of a company which is a resident of the other Contracting State may
be taxed in that other State.
ARTICLE 17
Entertainers
---------- (1) Notwithstanding the provisions of Articles 14 and 15, income
derived by entertainers (such as theatrical, motion picture, radio or
television artistes and musicians and athletes) from their personal activities
as such may be taxed in the Contracting State in which these activities are
exercised.
(2) Where income in respect of the personal activities of an entertainer as
such accrues not to 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.
ARTICLE 18
Pensions and Annuities
------------------ (1) Pensions (including government pensions) and annuities
paid to a resident of one of the Contracting States shall be taxable only in
that State.
(2) The term 'annuity' means a stated sum payable periodically at stated times
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 first-mentioned State.
ARTICLE 19
Government Service
---------------- (1) Remuneration (other than a pension or annuity) paid by
one of the Contracting States or by a political or administrative sub-division
of that State or by a local authority of that State to any individual in
respect of services rendered to that State or sub-division or authority shall
be taxable only in that State. However, such remuneration shall be taxable
only in the other Contracting State if the services are rendered in that State
and the recipient is a resident of that State who:
(a) is a citizen or national of that State; or
(b) did not become a resident of that State solely for the purpose of
performing the services.
(2) The provisions of paragraph (1) shall not apply to remuneration in respect
of services rendered in connection with any trade or business carried on by
one of the Contracting States or by a political or administrative sub-division
of one of the States or by a local authority of one of the States. In such a
case the provisions of Articles 15 and 16 shall apply.
ARTICLE 20
Professors and Teachers
------------------
A professor or teacher who visits one of the Contracting States for a period
not exceeding two years for the purpose of teaching or carrying out advanced
study or research at a university, college, school or other educational
institution in that State and who immediately before that visit was a resident
of the other Contracting State shall be exempt from tax in the first-mentioned
State on any remuneration for such teaching, advanced study or research in
respect of which he is, or upon the application of this Article will be,
subject to tax in the other State.
ARTICLE 21
Students
-------
Where a student, who is a resident of one of the Contracting States or who was
a resident of that State immediately before visiting the other Contracting
State and who is temporarily present in the other State solely for the purpose
of his education, receives payments from sources outside the other State for
the purpose of his maintenance or education, those payments shall be exempt
from tax in the other State.
ARTICLE 22
Income of Dual Resident
-------------------
Where a person, who by reason of the provisions of paragraph (1) of Article 4
is a resident of both Contracting States but by reason of the provisions of
paragraph (3) or (4) of that Article is deemed for the purposes of this
Convention to be a resident solely of one of the Contracting States, derives
income from sources in that Contracting State or from sources outside both
Contracting States, that income shall be taxable only in that Contracting
State.
ARTICLE 23
Source of Income
--------------
Income derived by a resident of one of the Contracting States which, under any
one or more of Articles 6 to 8 and 10 to 17 may be taxed in the other
Contracting State, shall for the purposes of Article 24, and of the income tax
law of that other State, be deemed to be income from sources in that other
State.
CHAPTER IV
METHODS OF ELIMINATION OF DOUBLE TAXATION
ARTICLE 24
(1) Subject to the provisions of the law of Australia from time to time in
force which relate to the allowance of a credit against Australian tax of tax
paid in a country outside Australia (which shall not affect the general
principle hereof), Italian tax paid, whether directly or by deduction, in
respect of income derived by a person who is a resident of Australia from
sources in Italy shall be allowed as a credit against Australian tax payable
in respect of that income.
(2) If a resident of Italy owns items of income which are taxable in
Australia, Italy in determining its income taxes specified in Article 2 of
this Convention, may include in the basis upon which such taxes are imposed
the said items of income, unless specific provisions of this Convention
otherwise provide.In such a case, Italy shall deduct from the taxes so
calculated the Australian tax on income, but in an amount not exceeding that
proportion of the aforesaid Italian tax which such items of income bear to the
entire income. On the contrary no deduction will be granted if the item of
income is subjected in Italy to a final withholding tax by request of the
recipient of the said income in accordance with the Italian law.
CHAPTER V
SPECIAL PROVISIONS
ARTICLE 25
Mutual Agreement Procedure
------------------------ (1) Where a resident of one of the Contracting States
considers that the actions of one or both of the Contracting States result or
will result for him in taxation not in accordance with this Convention, he
may, notwithstanding the remedies provided by the national laws of those
States, present his case to the competent authority of the Contracting State
of which he is a resident. This case must be presented within two years from
the first notification of the action.
(2) The competent authority shall endeavour, if the taxpayer's claim appears
to it to be justified and if it is not itself able to arrive at an appropriate
solution, to resolve the case with the competent authority of the other
Contracting State, with a view to the avoidance of taxation not in accordance
with this Convention.
(3) The competent authorities of the Contracting States shall endeavour to
resolve any difficulties or doubts arising as to the application of this
Convention.
(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
Convention.
ARTICLE 26
Exchange of Information
-------------------- (1) The competent authorities of the Contracting States
shall exchange such information as is necessary for the carrying out of this
Convention or of the domestic laws of the Contracting States concerning taxes
to which this Convention applies insofar as the taxation thereunder is not
contrary to this Convention, or for the prevention of fiscal evasion in
relation to such taxes. The exchange of information is not restricted by
Article 1. Any information received by a Contracting State shall be treated as
secret in the same manner as information obtained under the domestic laws of
that State and shall be disclosed only to persons or authorities (including
courts and administrative bodies) involved in the assessment or collection of,
the enforcement or prosecution in respect of, or the determination of appeals
in relation to, the taxes to which this Convention applies. Such persons or
authorities shall use the information only for such purposes.
(2) In no case shall the provisions of paragraph (1) be construed so as to
impose on one of the Contracting States the obligation-
(a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;
(b) to supply particulars which are not obtainable under the laws or in
the
normal course of the administration of that or of the other Contracting State;
(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 (ordre
public).
ARTICLE 27
Diplomatic and Consular Officials
--------------------------
Nothing in this Convention shall affect the fiscal privileges of diplomatic or
consular officials under the general rules of international law or under the
provisions of special agreements.
ARTICLE 28
Refunds
------- (1) Taxes withheld at the source in one of the Contracting States will
be refunded by request of the taxpayer or of the State of which he is a
resident if the right to collect the said taxes is affected by the provisions
of this Convention.
(2) Claims for refund, that shall be produced within the time limit fixed by
the law of the Contracting State which is obliged to carry out the refund,
shall be accompanied by an official certificate of the Contracting State of
which the taxpayer is a resident certifying the existence of the conditions
required for being entitled to the application of the allowances provided for
by this Convention.
(3) The competent authorities of the Contracting States shall settle the mode
of application of this Article, in accordance with the provisions of Article
25 of this Convention.
CHAPTER VI
FINAL PROVISIONS
ARTICLE 29
Entry Into Force
------------- (1) This Convention shall be ratified and the instruments of
ratification shall be exchanged at Rome as soon as possible.
(2) The Convention shall enter into force on the date of the exchange of
instruments of ratification and its provisions shall have effect-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in respect of income derived on or after 1 July 1976;
(ii) in respect of other Australian tax, for any year of income
beginning
on or after 1 July 1976;
(b) In Italy-
in respect of income assessable for taxable periods beginning on or after
1 July 1976.
(3) Claims for refund or credits arising in accordance with this Convention in
respect of any tax payable by residents of either of the Contracting States in
respect of income which is subject to tax and to which this Convention applies
in accordance with paragraph (2) of this Article and which was derived before
the entry into force of this Convention, shall be lodged within three years
from the date of entry into force of this Convention or from the date the tax
was charged whichever is later.
ARTICLE 30
Termination
---------- This Convention shall remain in force until terminated by one of
the Contracting States. Either Contracting State may terminate the Convention,
through the diplomatic channel, not earlier than five years after its entry
into force by giving notice of termination at least six months before the end
of the calendar year. In such event, the Convention shall cease to be
effective-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in respect of income derived on or after 1 July in the calendar
year next following that in which the notice of termination is given;
(ii) in respect of other Australian tax, for 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 Italy-
in respect of income assessable for taxable periods beginning on or after
1 July in the calendar year next following that in which the notice of
termination is given.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed the
present Convention.
Done in duplicate at Canberra the fourteenth day of December 1982 in the
English and Italian languages, both texts being equally authoritative.
JOHN HOWARD SERGIO ANGELETTI
or the Government For the
Government
of the
of Australia Republic of Italy
PROTOCOL
The Government of Australia and The Government of the Republic of Italy, at
the signing of the Convention between the two Governments for the avoidance of
double taxation and the prevention of fiscal evasion with respect to taxes on
income, have agreed upon the following provisions which shall form an integral
part of the Convention:
It is understood that:
(1) With reference to Articles 7 and 9-
If the information available to the competent authority of one of the
Contracting States is inadequate to determine the profits of an enterprise on
which tax may be imposed in that State in accordance with Article 7 or Article
9 of the Convention, nothing in those Articles shall prevent the application
of any law of that State relating to the determination of the tax liability of
a person provided that that law shall be applied, so far as the information
available to the competent authority permits, in accordance with the
principles applicable under Articles 7 and 9.
(2) With reference to paragraph (6) of Article 8-
The Italian taxes to which the Agreement therein referred to shall apply, with
effect from the date of their entry into force, are the following-
(i) the individual income tax (l'imposta sul reddito delle persone
fisiche);
(ii) the corporate income tax (l'imposta sul reddito delle persone
giuridiche);
(iii) the local income tax (l'imposta locale sui redditi).
If, in Australia, a tax (not being Australian tax referred to in Article 1 of
the said Agreement) is imposed on profits derived by an enterprise of Italy
from the operation of aircraft in international traffic, the taxes to which
the Agreement shall apply in Italy shall thereupon cease to include the local
income tax (l'imposta locale sui redditi).
(3) With reference to Article 9-
Notwithstanding the provisions of Article 9, an enterprise of one of the
Contracting States may be taxed by that Contracting State as if that Article
had not come into effect but, so far as it is practicable to do so, in
accordance with the principles applicable under that Article.
(4) With reference to Article 12-
The term 'payments' includes credits or any amount credited and a reference to
royalties paid includes royalties credited. The term 'royalties' includes
payments or credits for total or partial forbearance in respect of the use of
a property or right referred to in paragraph (3).
(5) With reference to Article 24-
The tax paid in respect of income by way of dividend in one of the Contracting
States that is to be allowed as a credit against tax payable in respect of
that income in the other Contracting State shall not include tax paid in
respect of the profits out of which the dividend is paid.
(6) With reference to paragraph (1) of Article 25-
The expression 'notwithstanding the remedies provided by the national laws'
means that the mutual agreement procedure is not alternative to the national
contentious proceedings which shall be, in any case, preventively initiated,
when the claim is related to an assessment of Italian tax not in accordance
with this Convention.
(7) With reference to Article 28-
The provisions of paragraph (3) shall not prevent the Contracting States from
carrying out other practices for the allowance of the taxation reductions
provided for in this Convention.
(8) If, in a Convention for the avoidance of double taxation that is
subsequently made between Australia and a third State being a State that at
the date of signature of this Protocol is a member of the Organisation for
Economic Co-operation and Development, Australia shall agree to limit the rate
of its taxation
(i) on dividends paid by a company which is a resident of Australia
for the purposes of Australian tax to which a company that is a
resident of the third State is entitled, to a rate less than
that provided in paragraph (2) of Article 10; or
(ii) on interest arising in Australia to which a resident of the
third State is entitled, to a rate less than that provided in
paragraph (2) of Article 11; or
(iii) on royalties arising in Australia to which a resident of the
third State is entitled, to a rate less than that provided in
paragraph (2) of Article 12,
the Government of Australia shall immediately inform the Government of the
Republic of Italy in writing through the diplomatic channel and shall enter
into negotiations with the Government of the Republic of Italy to review the
provisions in sub-paragraphs (i), (ii) and (iii) above in order to provide the
same treatment for Italy as that provided for the third State.
Done in duplicate at Canberra the fourteenth day of December 1982 in the
English and Italian languages, both texts being equally authoritative.
JOHN HOWARD SERGIO
ANGELETTI
or the Government For the
Government
of the
of Australia Republic of
Italy
----------
''SCHEDULE 22
Section 3
CONVENTION BETWEEN THE GOVERNMENT OF AUSTRALIA
AND THE GOVERNMENT OF
THE REPUBLIC OF KOREA
FOR THE AVOIDANCE OF DOUBLE
TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT
TO TAXES ON INCOME
The Government of Australia and the Government of the Republic of Korea
Desiring to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income,
Have agreed as follows:
CHAPTER 1
SCOPE OF THE CONVENTION
ARTICLE 1
Personal Scope
-----------
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
----------- (1) The existing taxes to which this Convention shall apply are-
(a) in Korea:
(i) the income tax;
(ii) the corporation tax; and
(iii) the inhabitant tax;
(b) in Australia:
the Australian income tax, including the additional tax upon the
undistributed amount of the distributable income of a private company.
(2) This Convention shall also apply to any identical or substantially similar
taxes which are imposed by either Contracting State after the date of
signature of this Convention in addition to, or in place of, the existing
taxes. At the end of each calendar year, the competent authority of each
Contracting State shall notify the competent authority of the other
Contracting State of any substantial changes which have been made in the laws
of either State relating to the taxes to which this Convention applies.
CHAPTER II
DEFINITIONS
ARTICLE 3
General Definitions
--------------- (1) For the purposes of this Convention, unless the context
otherwise requires-
(a) the term 'Australia' means the Commonwealth of Australia and, when
used
in a geographical sense, includes-
(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 Coral Sea Islands Territory; and
(vi) any area adjacent to the territorial limits of Australia or of
the
said Territories in respect of which there is for the time being in force,
consistently with international law, a law of Australia or of a State or part
of Australia or of a Territory aforesaid dealing with the exploitation of any
of
the natural resources of the sea-bed and subsoil of the continental shelf;
(b) the term 'Korea' means the Republic of Korea and, when used in a
geographical sense, it includes any area adjacent to the territorial sea of
the
Republic of Korea which, in accordance with international law, has been or may
hereafter be designated under the laws of the Republic of Korea as an area
within which the sovereign rights of the Republic of Korea with respect to the
sea-bed and subsoil and their natural resources may be exercised;
(c) the terms 'a Contracting State' and 'the other Contracting State' mean
Australia or Korea, as the context requires;
(d) the term 'person' means an individual, a company and any other body of
persons;
(e) the term 'company' means any body corporate or any entity which is
assimilated to a body corporate for tax purposes;
(f) the terms 'enterprise of a Contracting State' and 'enterprise of the
other Contracting State' mean respectively an enterprise carried on by a
resident of a Contracting State and an enterprise carried on by a resident of
the other Contracting State;
(g) the term 'tax' means Australian tax or Korean tax, as the context
requires;
(h) the term 'Australian tax' means tax imposed by Australia, being tax to
which this Convention applies by virtue of Article 2;
(i) the term 'Korean tax' means tax imposed by Korea, being tax to
which
this Convention applies by virtue of Article 2;
(j) the term 'competent authority' means, in the case of Australia, the
Commissioner of Taxation or his authorized representative, and in the case of
Korea, the Minister of Finance or his authorized representative; and
(k) the term 'international traffic', in relation to the operation of
ships
or aircraft by a resident of a Contracting State, means operations of ships or
aircraft other than operations of ships or aircraft which are confined solely
to places in the other Contracting State, and for this purpose the carriage of
passengers, livestock, mail, goods or merchandise shipped in a Contracting
State for discharge at another place in that State shall be treated as
operations
confined solely to places in that State.
(2) In this Convention, the terms 'Australian tax' and 'Korean tax' do not
include any penalty or interest imposed under the law of either Contracting
State relating to the taxes to which this Convention applies by virtue of
Article 2.
(3) In the application of this Convention by a Contracting State, any term not
defined in this Convention shall, unless the context otherwise requires, have
the meaning which it has under the laws of that Contracting State relating to
the taxes to which this Convention applies.
ARTICLE 4
Residence
-------- (1) For the purposes of this Convention, a person is, subject to
paragraph (2), a resident of a Contracting State-
(a) in the case of Australia, if the person is a resident of Australia for
the purposes of Australian tax; and
(b) in the case of Korea, if the person is a resident of Korea for the
purposes of Korean tax.
(2) A person is not a resident of a Contracting State for the purposes of this
Convention if he is liable to tax in that State in respect only of income from
sources in that State.
(3) Where by reason of the preceding provisions of this Article an individual
is a resident of both Contracting States, then his status shall be determined
in accordance with the following rules-
(a) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him;
(b) if he has a permanent home available to him in both Contracting
States,
or if he does not have a permanent home available to him in either of them, he
shall be deemed to be a resident solely of the Contracting State with which
his
personal and economic relations are the closer.
For purposes of this paragraph in determining the Contracting State with which
an individual's personal and economic relations are the closer, regard shall
be given to his citizenship or nationality (if he is a citizen or national of
a Contracting State).
(4) Where by reason of the provisions of paragraphs (1) and (2) a person other
than an individual is a resident of both Contracting States, then it shall be
deemed to be a resident solely of the Contracting State in which its place of
effective management is situated.
ARTICLE 5
Permanent Establishment
-------------------- (1) For the purposes of this Convention, the term
'permanent establishment' means a fixed place of business through which the
business of an enterprise is wholly or partly carried on.
(2) The term 'permanent establishment' includes especially-
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other place of extraction
of
natural resources;
(g) land used for agricultural, pastoral or forestry purposes.
(3) A building site or a construction, installation or assembly project
constitutes a permanent establishment only if it exists for more than six
months.
(4) An enterprise shall not be deemed to have a permanent establishment merely
by reason of one or more of the following-
(a) the use of facilities solely for the purpose of storage, display or
delivery of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or of collecting information, for the
enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of
activities which have a preparatory or auxiliary character for the enterprise,
such as advertising or scientific research.
(5) 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 six
months in connection with a building site, or a construction, installation or
assembly project which is being undertaken in that State; or
(b) substantial equipment is being used in that State for more than twelve
months by, for or under contract with the enterprise in exploration for, or
the
exploitation of, natural resources, or in activities connected with such
exploration or exploitation.
(6) A person acting in a Contracting State on behalf of an enterprise of the
other Contracting State-other than an agent of an independent status to whom
paragraph (7) applies-shall be deemed to be a permanent establishment of that
enterprise in the first-mentioned State if-
(a) he has, and habitually exercises in that State, an authority to
conclude
contracts binding the enterprise, unless his activities are limited to the
purchase of goods or merchandise for the enterprise; or
(b) in so acting, he manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise, provided that
this
provision shall apply only in relation to the goods or merchandise so
manufactured or processed.
(7) An enterprise shall not be deemed to have a permanent establishment in a
Contracting State merely because it carries on business in that Contracting
State through a broker, general commission agent or any other agent of an
independent status, where that person is acting in the ordinary course of his
business as such a broker or agent.
(8) The fact that a company which is a resident of a Contracting State
controls or is controlled by a company which is a resident of the other
Contracting State, or which carries on business in that other State (whether
through a permanent establishment or otherwise), shall not of itself
constitute either company a permanent establishment of the other.
(9) The principles set forth in paragraphs (1) to (8) inclusive shall also be
applied in determining for the purposes of paragraph (6) of Article 11 and
paragraph (5) of Article 12 of this Convention whether an enterprise of a
Contracting State has a permanent establishment outside both Contracting
States, and whether an enterprise, not being an enterprise of either
Contracting State, has a permanent establishment in a Contracting State.
CHAPTER III
TAXATION OF INCOME
ARTICLE 6
Income from Real Property
--------------------- (1) Income derived by a resident of a Contracting State
from land (including any building or other construction) situated in the other
Contracting State may be taxed in the other State.
(2) The term 'land' shall have the meaning which it has under the law of the
Contracting State in which the land in question is situated and it shall
include any lease of such land and any estate or direct interest in or over
such land whether improved or not. A right to receive variable or fixed
payments as consideration for the working of, or the right to work, mineral
deposits, oil or gas wells, quarries or other places of extraction or
exploitation of natural resources shall be deemed to be an estate or direct
interest in land situated in the Contracting State in which the mineral
deposits, oil or gas wells, quarries or natural resources are situated.
(3) The provisions of paragraph (1) shall also apply to the income from land
of an enterprise and to income from land used for the performance of
professional services.
ARTICLE 7
Business Profits
------------ (1) The profits of an enterprise of a Contracting State shall be
taxable only in that State unless the enterprise carries on business in the
other Contracting State through a permanent establishment situated therein. If
the enterprise carries on business as aforesaid, the profits of the enterprise
may be taxed in the other State but only so much of them as is attributable to
that permanent establishment.
(2) 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 therein, there shall in each Contracting
State be attributed to that permanent establishment the profits which it might
be expected to make if it were a distinct and separate enterprise engaged in
the same or similar activities under the same or similar conditions and
dealing wholly independently with the enterprise of which it is a permanent
establishment.
(3) In the determination of the profits of a permanent establishment, there
shall be allowed as deductions expenses of the enterprise, 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) Where the correct amount of profits attributable to a permanent
establishment is incapable of determination or the ascertaining thereof
presents exceptional difficulties, nothing in this Article shall affect the
application of any law of that State relating to the determination of the tax
liability of a person provided that that law shall be applied, so far as the
information available to the competent authority permits, in accordance with
the principles of this Article.
(6) Where profits include items of income which are dealt with separately in
other Articles of this Convention, then the provisions of those Articles shall
not be affected by the provisions of this Article.
ARTICLE 8
Ships and Aircraft
-------------- (1) Profits of a resident of a Contracting State from the
operation of ships or aircraft in international traffic shall be taxable only
in that State.
(2) The provisions of paragraph (1) shall also apply to profits derived from
participation in a pool, a joint business or an international operating
agency.
ARTICLE 9
Associated Enterprises
------------------ (1) Where a person subject to the taxing jurisdiction of a
Contracting State and any other person are related and where conditions are
operative between such related persons in their commercial or financial
relations which are different from those which might be expected to operate if
such persons were unrelated persons dealing wholly independently with one
another, then any profits which, but for those conditions, might have been
expected to accrue to one of those persons, but by reason of those conditions,
have not so accrued, may be included in the profits of that person and taxed
accordingly.
(2) A person is related to another person for purposes of this Convention if
either person participates directly or indirectly in the management, control,
or capital of the other, or if any third person or persons participates or
participate directly or indirectly in the management, control, or capital of
both.
(3) This Article shall apply only where both Contracting States have a tax
interest.
(4) Notwithstanding the provisions of this Article, an enterprise of a
Contracting State may be taxed by that State as if this Article had not come
into effect but, so far as it is practicable to do so, in accordance with the
principles of this Article.
(5) Where profits on which an enterprise of a Contracting State has been
charged to tax in that State are also included, by virtue of paragraph (1) or
(4), in the profits of an enterprise of the other Contracting State and taxed
accordingly, and the profits so included are profits which might have been
expected to have accrued to that enterprise of the other State if the
conditions operative between the enterprises had been those which might have
been expected to have operated between independent enterprises dealing wholly
independently with one another, then the first-mentioned State shall make an
appropriate adjustment to the amount of tax charged on those profits in the
first-mentioned State. In determining such an adjustment, due regard shall be
had to the other provisions of this Convention in relation to the nature of
the income, and for this purpose the competent authorities of the Contracting
States shall if necessary consult each other.
ARTICLE 10
Dividends
-------- (1) Dividends paid by a company which is a resident of a Contracting
State, being dividends to which a resident of the other Contracting State is
beneficially entitled, may be taxed in that other State.
(2) Such dividends may be taxed in the Contracting State of which the company
paying the dividends is a resident, and according to the law of that State,
but 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 which is subjected to the same taxation treatment as income from shares
by the laws of the Contracting State of which the company making the
distribution is a resident.
(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
therein, or performs in that other State independent personal services from a
fixed base situated therein, and the holding in respect of which the dividends
are paid is effectively connected with such permanent establishment or fixed
base. In any such case the provisions of Article 7 or Article 14, as the case
may be, shall apply.
(5) Dividends paid by a company which is a resident of a Contracting State,
being dividends to which a person who is not a resident of the other
Contracting State is beneficially entitled, shall be exempt from tax in that
other State except insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or fixed base
situated in that other State. Provided that this paragraph shall not apply in
relation to dividends paid by any company which by reason of paragraph (1) of
Article 4 is a resident of Australia and which by reason of that paragraph is
also a resident of Korea.
(6) Nothing in this Convention shall be construed as preventing a Contracting
State from imposing on the income of a company which is a resident of the
other Contracting State, tax in addition to the taxes referred to in Article 2
in relation to the first-mentioned Contracting State which are payable by a
company which is a resident of the first-mentioned State, provided that any
such additional tax shall not exceed 15 per cent of the amount by which the
taxable income of the first-mentioned company of a year of income exceeds the
tax payable on that taxable income to the first-mentioned State. Any tax
payable to a Contracting State on the undistributed profits of a company which
is a resident of the other Contracting State shall be calculated as if that
company were not liable to the additional tax referred to in this paragraph
and had paid dividends of such amount that tax equal to the amount of that
additional tax would have been payable on the dividends in accordance with
paragraph (2) of this Article.
ARTICLE 11
Interest
------ (1) Interest arising in a Contracting State, being interest to which a
resident of the other Contracting State is beneficially entitled, may be taxed
in that other State.
(2) Such interest may be taxed in the Contracting State in which it arises,
and according to the law of that State, but the tax so charged shall not
exceed 15 per cent of the gross amount of the interest.
(3) Interest derived by the Government of a Contracting State or by any other
body exercising governmental functions in or in a part of a Contracting State,
or by a bank performing central banking functions in a Contracting State,
shall be exempt from tax in the other Contracting State.
(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, and interest from
any other form of indebtedness as well as all other income assimilated to
income from money lent by the taxation law of the Contracting State in which
the income arises.
(5) The provisions of 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 therein, or
performs in that other State independent personal services from a fixed base
situated therein, and the indebtedness in respect of which the interest is
paid is effectively connected with such permanent establishment or fixed base.
In such a case, the provisions of Article 7 or Article 14, as the case may be,
shall apply.
(6) Interest shall be deemed to arise in a Contracting State when the payer is
that State itself or a political or administrative subdivision of that State
or a local authority of that State or a person who, by reason of paragraph (1)
of Article 4 is a resident of that State. Where, however, the person paying
the interest, whether he is a resident of a Contracting State or not, has in a
Contracting State or outside both Contracting States a permanent establishment
or fixed base in connection with which the indebtedness on which the interest
is paid was incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed to arise in
the State in which the permanent establishment or fixed base is situated.
(7) 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 taxpayer and the person so entitled in the absence of
such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
interest paid shall remain taxable according to the law of each Contracting
State, but subject to the other provisions of this Convention.
ARTICLE 12
Royalties
------- (1) Royalties arising in a Contracting State, being royalties to which
a resident of the other Contracting State is beneficially entitled, may be
taxed in that other State.
(2) Such royalties may be taxed in the Contracting State in which they arise,
and according to the law of that State, but the tax so charged shall not
exceed 15 per cent of the gross amount of the royalties.
(3) The term 'royalties' in this Article means payments or credits, whether
periodical or not, and however described or computed, to the extent to which
they are made as consideration for-
(a) the use of, or the right to use, any copyright, patent, design or
model,
plan, secret formula or process, trademark, or other like property or right;
(b) the use of, or the right to use, any industrial, commercial or
scientific equipment;
(c) the supply of scientific, technical, industrial or commercial
knowledge
or information;
(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 paragraph (a), any such equipment as is
mentioned in paragraph (b) or any such knowledge or information as is
mentioned
in paragraph (c);
(e) the use of, or the right to use-
(i) motion picture films;
(ii) films or video tapes for use in connection with television; or
(iii) tapes for use in connection with radio broadcasting; or
(f) total or partial forbearance in respect of the use of a 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 therein, or
performs in that other State independent personal services from a fixed base
situated therein, and the right or property in respect of which the royalties
are paid is effectively connected with such permanent establishment or fixed
base. In such a case, the 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 or administrative subdivision of that
State or a local authority of that State or a person who, by reason of
paragraph (1) of Article 4, is a resident of that State. Where, however, the
person paying the royalties, whether he is a resident of a Contracting State
or not, has in a 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 estabishment 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, having regard to what they are paid
for, exceeds the amount which might have been expected to have been agreed
upon by the payer and the person so entitled in the absence of such
relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
royalties paid shall remain taxable according to the law of each Contracting
State, but subject to the other provisions of this Convention.
ARTICLE 13
Alienation of Property
----------------- (1) Income from the alienation of real property may be taxed
in the Contracting State in which that property is situated.
(2) For the purposes of this Article-
(a) the term 'real property' shall include-
(i) a lease of land or any other direct interest in or over land;
(ii) rights to exploit, or to explore for, natural resources; and
(iii) shares or comparable interests in a company, the assets of
which
consist wholly or principally of direct interests in or over land in a
Contracting State or of rights to exploit, or to explore for, natural
resources
in a Contracting State;
(b) real property shall be deemed to be situated-
(i) where it consists of direct interests in or over land-in the
Contracting State in which the land is situated;
(ii) where it consists of rights to exploit, or to explore for,
natural
resources-in the Contracting State in which the natural resources are situated
or the exploration may take place; and
(iii) where it consists of shares or comparable interests in a
company,
the assets of which consist wholly or principally of direct interests in or
over land in a Contracting State or of rights to exploit, or to explore for,
natural
resources in a Contracting State-in the Contracting State in which the assets
or the principal assets of the company are situated.
(3) Income derived by an enterprise of a Contracting State from the alienation
of ships or aircraft operated in international traffic while owned by that
enterprise or of personal property pertaining to the operation of those ships
or aircraft shall be taxable only in that State.
ARTICLE 14
Independent Personal Services
------------------------ (1) Income derived by an individual who is a resident
of a Contracting State in respect of professional services or other
independent activities of a similar character shall be taxable only in that
State unless he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities. If he has such
a fixed base, the income may be taxed in the other State but only so much of
it as is attributable to activities exercised from that fixed base.
(2) The term 'professional services' includes services performed in the
exercise of independent scientific, literary, artistic, educational or
teaching activities as well as in the exercise of the independent activities
of physicians, lawyers, engineers, architects, dentists and accountants.
ARTICLE 15
Dependent Personal Services
---------------------- (1) Subject to the provisions of Articles 16, 18, 19
and 20, salaries, wages and other similar remuneration derived by an
individual who is a resident of a Contracting State in respect of an
employment shall be taxable only in that State unless the employment is
exercised in the other Contracting State. If the 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 first-mentioned State if-
(a) the recipient is present in that other State for a period or periods
not
exceeding in the aggregate 183 days in the year of income of that other State;
and
(b) the remuneration is paid by, or on behalf of, an employer who is not a
resident of 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 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 Contracting State.
ARTICLE 16
Directors' Fees
------------
Directors' fees and other similar payments derived by a resident of a
Contracting State in his capacity as a member of the board of directors of a
company which is a resident of the other Contracting State may be taxed in
that other Contracting State.
ARTICLE 17
Entertainers
---------- (1) Notwithstanding the provisions of Articles 14 and 15, income
derived by a resident of a Contracting State as an entertainer (such as a
theatre, motion picture, radio or television artiste, or a musician, or an
athlete) from his personal activities as such exercised in the other
Contracting State, may be taxed in that other State.
(2) Where income in respect of personal activities exercised by an entertainer
in his capacity as such accrues not to the entertainer himself but to another
person, that income may, notwithstanding the provisions of Articles 7, 14 and
15, be taxed in the Contracting State in which the activities of the
entertainer are exercised.
(3) Notwithstanding the provisions of paragraph (1), income derived by an
entertainer from his personal activities as such in a Contracting State shall
be taxable only in the other Contracting State if his visit to the
first-mentioned State is supported substantially from the public funds of that
other State or of one of its political subdivisions or local authorities.
(4) Notwithstanding the provisions of paragraph (2), where income in respect
of personal activities as such of an entertainer in a Contracting State
accrues not to that entertainer himself but to another person, that income
shall be taxable only in the other Contracting State if that person is
supported substantially from the public funds of that other State or of one of
its political subdivisions or local authorities, or if that person is a
non-profit organisation of that other State.
ARTICLE 18
Pensions and Annuities
------------------ (1) Subject to the provisions of paragraph (2) of Article
19, any pension or any annuity paid to a resident of a Contracting State shall
be taxable only in that State.
(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.
ARTICLE 19
Government Service
---------------- (1) (a) Remuneration, other than a pension or annuity, paid
by a Contracting
State or a political subdivision or local authority of that Contracting State
to an individual in respect of services rendered to that State or subdivision
or
authority shall be taxable only in that State.
(b) However, such remuneration shall be taxable only in the other
Contracting State if the services are rendered in that State and the
individual is a
resident of that State who:
(i) is a national or citizen of that State; or
(ii) did not become a resident of that State solely for the purpose
of
rendering the services.
(2) (a) Any pension paid by, or out of funds created by, a Contracting State
or a political subdivision or local authority of that Contracting State to an
individual in respect of services rendered to that State or subdivision or
authority shall be taxable only in that State.
(b) However, such pension shall be taxable only in the other Contracting
State if the individual is a resident of, and a national or citizen of, that
Contracting State.
(3) The provisions of Articles 15, 16 and 18 shall apply to remuneration and
pensions in respect of services rendered in connection with a business carried
on by a Contracting State or a political subdivision or local authority of
that Contracting State.
(4) The provisions of paragraphs (1) and (2) of this Article shall likewise
apply in respect of remuneration or pensions paid, in the case of Korea, by
the Bank of Korea, the Export-Import Bank of Korea, and the Korea Trade
Promotion Corporation and, in the case of Australia, by the Reserve Bank of
Australia.
ARTICLE 20
Professors and Teachers
------------------
An individual who is a resident of a Contracting State and who, at the
invitation of any university, college, school or other recognised educational
institution, visits the other Contracting State for a period not exceeding two
years solely for the purpose of teaching or research or both at such
educational institution shall be taxable only in the first-mentioned State on
his remuneration for such teaching or research.
ARTICLE 21
Students and Trainees
-----------------
Where a student or trainee, who is a resident of a Contracting State or who
was a resident of that Contracting State immediately before visiting the other
Contracting State and who is temporarily present in the other Contracting
State solely for the purpose of his education or training, receives payments
from sources outside the other Contracting State for the purpose of his
maintenance or education, those payments shall be exempt from tax in the other
Contracting State.
ARTICLE 22
Income Not Expressly Mentioned
-------------------------- (1) Items of income of a resident of a Contracting
State which are not expressly mentioned in the foregoing Articles of this
Convention shall be taxable only in that Contracting State.
(2) However, if such income is derived by a resident of a Contracting State
from sources in the other Contracting State, such income may also be taxed in
the Contracting State in which it arises.
(3) The provisions of paragraph (1) shall not apply to income 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 such a case, the provisions of Article 7 or Article 14, as the case
may be, shall apply.
ARTICLE 23
Source of Income
-------------
Income derived by a resident of a Contracting State which, under any one or
more of Articles 6 to 8 and 10 to 17 may be taxed in the other Contracting
State, shall, for the purposes of Article 24 and of the income tax law of that
other State, be deemed to be income from sources in that other State.
CHAPTER IV
METHODS OF ELIMINATION OF DOUBLE TAXATION
ARTICLE 24
(1) Subject to the provisions of the law of Australia from time to time in
force which relate to the allowance of a credit against Australian tax of tax
paid in a country outside Australia (which shall not affect the general
principle hereof), Korean tax paid under the law of Korea and in accordance
with this Convention, whether directly or by deduction, in respect of income
derived by a person who is a resident of Australia from sources in Korea shall
be allowed as a credit against Australian tax payable on the income on which
the Korean tax was paid. However, where the income is a dividend paid by a
company which is a resident of Korea, the credit shall only take into account
such tax in respect thereof as is additional to any tax payable by the company
on the profits out of which the dividend is paid.
(2) In the case of a resident of Korea, double taxation shall be avoided in
accordance with this paragraph. Subject to the provisions of Korean tax law
regarding the allowance as a credit against Korean tax of tax payable in any
country other than Korea (which shall not affect the general principle hereof)
Australian tax payable (excluding in the case of a dividend tax payable in
respect of the profits out of which the dividends are paid) under the laws of
Australia and in accordance with this Convention, whether directly or by
deduction, in respect of income from sources within Australia shall be allowed
as a credit against Korean tax payable in respect of that income. The credit
shall not, however, exceed that proportion of Korean tax which the income from
sources within Australia bears to the entire income subject to Korean tax.
(3) (a) For the purposes of paragraph (4), the term 'Korean tax forgone'
means-
(i) in the case of interest derived by a resident of Australia
which is
exempted from Korean tax in accordance with the relevant legislation, the
amount which, under the law of Korea and in accordance with this Convention,
would have been payable as Korean tax if the interest had not been so exempt
and if the tax referred to in paragraph (2) of Article 11 were not to exceed
10 per cent of the gross amount of the interest; and
(ii) in the case of royalties derived by a resident of Australia
which are exempted either wholly or partly from Korean tax in
accordance with the relevant legislation, the amount or, where
the royalties are partly exempt, the
additional amount which, under the law of Korea and in accordance with this
Convention, would have been payable as Korean tax if the royalties had not
been
so wholly or partly exempt, and if the tax referred to in paragraph (2) of
Article 12 were not to exceed 10 per cent of the gross amount of the
royalties.
(b) In sub-paragraph (a), the term 'the relevant legislation' means those
provisions of the laws of Korea relating to Korean tax which are agreed in
letters exchanged from time to time between the Minister of Finance of Korea
and the Treasurer of Australia for the purposes of this paragraph.
(4) (a) For the purposes of paragraph (1), an amount of Korean tax forgone
shall be deemed to be an equivalent amount of Korean tax paid;
(b) For the purposes of the income tax law of Australia-
(i) an amount of interest referred to in sub-paragraph (3) (a) (i)
shall
be deemed to be increased by the amount of Korean tax forgone in respect of
that interest; and
(ii) an amount of royalties referred to in sub-paragraph (3) (a)
(ii)
shall be deemed to be increased by the amount of Korean tax forgone in respect
of those royalties.
(5) Paragraphs (3) and (4) shall not apply in relation to income derived in
any year of income after the year of income that ends on 30 June in the
calendar year fifth following the calendar year in which this Convention is
signed or any later date that may be agreed by the Governments of the
Contracting States in letters exchanged for this purpose.
CHAPTER V
SPECIAL PROVISIONS
ARTICLE 25
Mutual Agreement Procedure
----------------------- (1) Where a person considers that the actions of one
or both of the Contracting States result or will result for him in taxation
not in accordance with the provisions of this Convention, he may,
notwithstanding the remedies provided by the domestic law of those States,
present his case to the competent authority of the Contracting State of which
he is a resident. The case must be presented within three years from the first
notification of the action resulting in taxation not in accordance with the
provisions of this Convention.
(2) The competent authority shall endeavour, if the objection appears to it to
be justified and if it is not itself able to arrive at an appropriate
solution, to resolve the case by mutual agreement with the competent authority
of the other Contracting State, with a view to the avoidance of taxation which
is not in accordance with the Convention. Any solution reached shall be
implemented notwithstanding any time limits in the domestic laws of the
Contracting States.
(3) The competent authorities of the Contracting States shall seek to resolve
by agreement any difficulties or doubts arising as to the application or
interpretation of this Convention. In particular the competent authorities of
the Contracting States shall seek to agree as to with which of the Contracting
States an individual described in sub-paragraph (3) (b) of Article 4 has
closer personal and economic relations or in which of the Contracting States
the place of effective management of a person other than an individual
described in paragraph (4) of that Article is situated.
(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
Convention.
ARTICLE 26
Exchange of Information
------------------- (1) The competent authorities of the Contracting States
shall exchange such information as is necessary for carrying out the
provisions of this Convention or of the domestic laws of the Contracting
States concerning the taxes to which this Convention applies insofar as the
taxation thereunder is not contrary to this Convention. The exchange of
information is not restricted by Article 1. Any information received by the
competent authority of a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of,
enforcement or prosecution in respect of, or the determination of appeals in
relation to the taxes to which this Convention 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 a Contracting State the obligation-
(a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;
(b) to supply information which is not obtainable under the laws or in the
normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or to supply
information, the disclosure of which would be contrary to public policy.
ARTICLE 27
Diplomatic Agents and Consular Officers
--------------------------------
Nothing in this Convention shall affect the fiscal privileges of diplomatic
agents or consular officers under the general rules of international law or
under the provisions of special agreements.
CHAPTER VI
FINAL PROVISIONS
ARTICLE 28
Entry Into Force
------------ (1) Each Contracting State shall notify the other by note through
the diplomatic channel of the completion of the procedure required by its law
for the bringing into force of this Convention. This Convention shall enter
into force on the first day of the month second following the month in which
the later of these notifications is given.
(2) This Convention shall have effect-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 January in the
calendar year in which this Convention is signed; and
(ii) in respect of other Australian tax, in relation to income of
any year of income beginning on or after 1 July in the calendar
year in which this
Convention is signed;
(b) in Korea-
(i) in respect of tax withheld at source on amounts paid or
credited to a non-resident, in relation to income derived on or
after 1 January in the
calendar year in which this Convention is signed; and
(ii) in respect of other Korean tax, in relation to income of any
year of
income beginning on or after 1 January in the calendar year in which this
Convention is signed.
ARTICLE 29
Termination
----------
This Convention shall remain in force indefinitely, but the Government of
Australia or the Government of Korea may on or before 30 June in any calendar
year after the expiration of 5 years from the date of its entry into force
give to the other Government through the diplomatic channel written notice of
termination and, in that event, this Convention shall cease to be effective-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 January in the
calendar year next following that in which the notice of termination is given;
and
(ii) in respect of other Australian tax, in relation to income of
any year of income beginning on or after 1 July in the calendar
year next following that
in which the notice is given;
(b) in Korea-
(i) in respect of tax withheld at source on amounts paid or
credited to a non-resident, in relation to income derived on or
after 1 January in the
calendar year next following that in which the notice of termination is given;
and
(ii) in respect of other Korean tax, in relation to income of any
year of
income beginning on or after 1 January in the calendar year next following
that
in which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective Governments, have signed this Convention.
Done in duplicate at Canberra this twelfth day of July of the year one
thousand nine hundred and eighty-two in the English and Korean languages, both
texts being equally authoritative.
PROTOCOL
-----------
THE GOVERNMENT OF AUSTRALIA AND
THE GOVERNMENT OF THE REPUBLIC OF KOREA
HAVE AGREED AT THE SIGNING of the Convention between the two Governments for
the avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income upon the following provisions which shall form an
integral part of the said Convention.
(1) With reference to Article 2,
the Convention shall also apply to the Korean defence tax where charged by
reference to the income tax or the corporation tax.
(2) With reference to Article 7,
the Convention shall not apply to profits of an enterprise from carrying on a
business of any form of insurance, other than life insurance.
(3) With reference to paragraph (6) of Article 10,
the Governments of the Contracting States acknowledge that the additional
tax referred to in that paragraph applicable at the time at which the
Convention is signed is, in the case of Australia, only a tax of 5 per cent
levied on the
reduced taxable income of a company which is not a resident of Australia, in
accordance with Section 128T of the Income Tax Assessment Act 1936.
(4) With reference to paragraph (1) of Article 24,
the Governments of the Contracting States acknowledge that a company which
is a resident of Australia is, in accordance with the provisions of the
taxation law of Australia in force at the date of signature of the Convention,
entitled
to a rebate in its assessment at the average rate of tax payable by the
company
in respect of dividends that are included in its taxable income and are
received from a company which is a resident of Korea. In the event that
Australia should
cease to allow a company which is a resident of Australia a rebate in its
assessment at the average rate of tax payable by the company in respect of
dividends derived from sources in Korea and included in the taxable income of
the company, the Governments of the Contracting States will enter into
negotiations in order to establish new provisions concerning the credit to be
allowed by Australia against its tax on the dividends.
(5) With reference to paragraph (2) of Article 24,
if subsequently to the signature of the Convention Korea provides relief
from its tax on intercorporate dividends, or in a convention with another
country agrees to give credit for the tax of the other country on profits out
of which dividends are paid to a resident of Korea, it shall immediately
notify
Australia and enter into negotiations in order to establish new provisions
concerning the credit to be allowed by Korea against its tax on dividends.
(6) In general,
if in a convention for the avoidance of double taxation that is
subsequently made between Australia and a third State Australia should agree-
(a) to reduce below 15 per cent the rate of its tax on dividends paid by a
company which is a resident of Australia and to which a resident of
the third
State is beneficially entitled; or
(b) to include an Article dealing with non-discrimination,
the Government of Australia shall immediately inform the Government of Korea
and shall enter into negotiations with the Government of Korea with a view to
providing treatment in relation to Korea comparable with that provided in
relation to that third State.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their
respective Governments, have signed this Protocol.
Done in duplicate at Canberra this twelfth day of July of the year one
thousand nine hundred and eighty-two in the English and Korean languages, both
texts being equally authoritative.
For the Government of For the Government of the
Australia: Republic of Korea:
JOHN HOWARD HA JONG YOON
----------
''SCHEDULE 23
Section 3
CONVENTION
BETWEEN
AUSTRALIA
AND
THE KINGDOM OF NORWAY
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
The Government of Australia and the Government of the Kingdom of Norway,
Desiring to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and on capital,
Have agreed as follows:
ARTICLE 1
Personal Scope
-----------
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
----------- (1) The existing taxes to which this Convention shall apply are-
(a) in Australia:
the Australian income tax, including the additional tax upon the
undistributed amount of the distributable income of a private company;
(b) in Norway:
(i) the national tax on income (inntektsskatt til staten);
(ii) the county municipal tax on income (inntektsskatt til
fylkeskommunen);
(iii) the municipal tax on income (inntektsskatt til kommunen);
(iv) the national contributions to the Tax Equalisation Fund
(fellesskatt
til Skattefordelingsfondet);
(v) the national tax on capital (formuesskatt til staten);
(vi) the municipal tax on capital (formuesskatt til kommunen);
(vii) the national tax relating to income and capital from the
exploration
for and the exploitation of submarine petroleum resources and activities and
work relating thereto, including pipeline transport of petroleum produced
(skatt til staten vedro/rende inntekt og formue i forbindelse med
underso/kelse etter
og utnyttelse av undersjo/iske petroleumsforekomster og dertil knyttet
virksomhet og arbeid, herunder ro/rledningstransport av utvunnet petroleum);
(viii) the national dues on remuneration to non-resident artistes
(avgift
til staten av honorarer som tilfaller kunstnere bosatt i utlandet);
(ix) the seamen's tax (sjo/mannsskatt).
(2) This Convention shall also apply to any identical or substantially similar
taxes which are imposed by either Contracting State after the date of
signature of this Convention in addition to, or in place of, the existing
taxes.
ARTICLE 3
General Definitions
--------------- (1) In this Convention, unless the context otherwise requires-
(a) the term 'Australia' means the Commonwealth of Australia and, when
used
in a geographical sense, includes-
(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 Coral Sea Islands Territory; and
(vi) any area adjacent to the territorial limits of Australia or of
the said Territories in respect of which there is for the time
being in force, consistently with international law, a law of
Australia or of a State or part of Australia or of a Territory
aforesaid dealing with the exploitation of any of the natural
resources of the sea-bed and subsoil of the continental shelf;
(b) the term 'Norway' means the Kingdom of Norway, including any area
outside the territorial waters of the Kingdom of Norway where the
Kingdom of Norway,
according to Norwegian legislation and in accordance with international law,
may exercise her rights with respect to the sea-bed and subsoil and their
natural
resources; the term does not comprise Svalbard, Jan Mayen and the Norwegian
dependencies ('biland');
(c) the terms 'Contracting State', 'one of the Contracting States' and
'other Contracting State' mean Australia or Norway, as the context
requires;
(d) the term 'person' means an individual, a company and any other body of
persons;
(e) the term 'company' means any body corporate or any entity which is
treated as a company or a body corporate for tax purposes;
(f) the terms 'enterprise of one of the Contracting States' and
'enterprise
of the other Contracting State' mean an enterprise carried on by a resident of
Australia or an enterprise carried on by a resident of Norway, as the context
requires;
(g) the term 'tax' means Australian tax or Norwegian tax, as the context
requires;
(h) the term 'Australian tax' means tax imposed by Australia, being tax to
which this Convention applies by virtue of Article 2;
(i) the term 'Norwegian tax' means tax imposed by Norway or its
political
subdivisions or local authorities, being tax to which this Convention applies
by virtue of Article 2;
(j) the term 'competent authority' means, in the case of Australia, the
Commissioner of Taxation or his authorised representative, and in the case of
Norway, the Minister of Finance and Customs or his authorised representative.
(2) In this Convention, the terms 'Australian tax' and 'Norwegian tax' do not
include any penalty or interest imposed under the law of either Contracting
State relating to the taxes to which this Convention applies by virtue of
Article 2.
(3) In the application of this Convention by a Contracting State, any term not
defined in this Convention shall, unless the context otherwise requires, have
the meaning which it has under the laws of that State relating to the taxes to
which this Convention applies.
ARTICLE 4
Residence
-------- (1) For the purposes of this Convention, a person is a resident of
one of the Contracting States-
(a) in the case of Australia, subject to the provisions of paragraph (2),
if
the person is a resident of Australia for the purposes of Australian tax; and
(b) in the case of Norway, if the person is liable to tax therein by
reason
of his domicile, residence, place of incorporation or any other criterion of a
similar nature but not if he is liable to tax in Norway in respect only of
income from sources therein.
(2) In relation to income from sources in Norway, a person who is subject to
Australian tax on income which is from sources in Australia shall not be
treated as a resident of Australia unless the income from sources in Norway is
subject to Australian tax or, if that income is exempt from Australian tax, it
is so exempt solely because it is subject to Norwegian tax.
(3) Where by reason of the preceding provisions of this Article an individual
is a resident of both Contracting States, then his status shall be determined
in accordance with the following rules:
(a) he shall be deemed to be a resident solely of the Contracting State in
which he has a permanent home available to him;
(b) if he has a permanent home available to him in both Contracting
States,
or if he does not have a permanent home available to him in either of them, he
shall be deemed to be a resident solely of the Contracting State with which
his
personal and economic relations are the closer.
(4) For the purposes of the last preceding paragraph, an individual's
citizenship or nationality of a Contracting State as well as his habitual
abode shall be factors in determining the degree of his personal and economic
relations with that Contracting State.
(5) Where by reason of the provisions of paragraph (1), a person other than an
individual is a resident of both Contracting States, then it shall be deemed
to be a resident solely of the Contracting State in which its place of
effective management is situated.
ARTICLE 5
Permanent Establishment
-------------------- (1) For the purposes of this Convention, the term
'permanent establishment' means a fixed place of business through which the
business of an enterprise is wholly or partly carried on.
(2) The term 'permanent establishment' shall include 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 twelve months.
(3) Notwithstanding the preceding provisions of this Article, an enterprise
shall not be deemed to have a permanent establishment merely by reason of-
(a) the use of facilities solely for the purpose of storage, display or
delivery of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to the
enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or for collecting information, for the
enterprise;
(e) the maintenance of a fixed place of business solely for the purpose of
activities which have a preparatory or auxiliary character for the enterprise,
such as advertising or scientific research.
(4) An enterprise shall be deemed to have a permanent establishment in one of
the Contracting States and to carry on business through that permanent
establishment if-
(a) it carries on supervisory activities in that State for more than
twelve
months in connection with a building site, or a construction, installation or
assembly project which is being undertaken in that State; or
(b) substantial equipment is being used in that State by, for or under
contract with the enterprise.
(5) A person acting in one of the Contracting States on behalf of an
enterprise of the other Contracting State-other than an agent of an
independent status to whom paragraph (6) applies-shall be deemed to be a
permanent establishment of that enterprise in the first-mentioned State if-
(a) he has, and habitually exercises in that State, an authority to
conclude
contracts on behalf of the enterprise, unless his activities are limited to
the
purchase of goods or merchandise for the enterprise; or
(b) in so acting, he manufactures or processes in that State for the
enterprise goods or merchandise belonging to the enterprise.
(6) An enterprise of one of the Contracting States shall not be deemed to have
a permanent establishment in the other Contracting State merely because it
carries on business in that other State through a broker, general commission
agent or any other agent of an independent status, where that person is acting
in the ordinary course of his business as such a broker or agent.
(7) The fact that a company which is a resident of one of the Contracting
States controls or is controlled by a company which is a resident of the other
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 paragraphs (1) to (7) inclusive shall be
applied in determining for the purposes of paragraph (6) of Article 11 and
paragraph (5) of Article 12 of this Convention whether there is a permanent
establishment outside both Contracting States, and whether an enterprise, not
being an enterprise of one of the Contracting States, has a permanent
establishment in one of the Contracting States.
ARTICLE 6
Income from Real Property
--------------------- (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 laws
of
Australia, and shall also include-
(i) a lease of land and any other interest in or over land, whether
improved or not;
(ii) a right to receive variable or fixed payments as consideration
for
the working of, or the right to work, mineral deposits, oil or gas wells,
quarries or other places of extraction or exploitation of natural resources;
and
(b) in the case of Norway, means immovable property according to the laws
of
Norway, and shall also include-
(i) property accessory to immovable property;
(ii) rights to which the provisions of the general law respecting
landed
property apply;
(iii) usufruct of immovable property; and
(iv) a right to receive variable or fixed payments as consideration
for
the working of, or the right to work, mineral deposits, oil or gas wells,
quarries or other places of extraction or exploitation of natural resources.
Ships, boats and aircraft shall not be regarded as real property.
(3) A lease of land, any other interest in or over land and any right referred
to in any of the sub-paragraphs of paragraph (2) shall be regarded as situated
where the land, mineral deposits, oil or gas wells, quarries or natural
resources, as the case may be, are situated.
(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 the
income from real property of an enterprise and to income from real property
used for the performance of professional services.
ARTICLE 7
Business Profits
------------ (1) The profits of an enterprise of one of the Contracting States
shall be taxable only in that State unless the enterprise carries on business
in the other Contracting State through a permanent establishment situated
therein. If the enterprise carries on business as aforesaid, the profits of
the enterprise may be taxed in the other State, but only so much of them as is
attributable to that permanent establishment.
(2) Subject to the provisions of paragraph (3), where an enterprise of one of
the Contracting States carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each
Contracting State be attributed to that permanent establishment the 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) Insofar as it has been customary in a Contracting State to determine the
profits to be attributed to a permanent establishment on the basis of an
apportionment of the total profits of the enterprise to its various parts,
nothing in paragraph (2) shall preclude that Contracting State from
determining the profits to be taxed by such an apportionment as may be
customary; the method of apportionment adopted shall, however, be such that
the result shall be in accordance with the principles contained in this
Article.
(5) No profits shall be attributed to a permanent establishment by reason of
the mere purchase by that permanent establishment of goods or merchandise for
the enterprise.
(6) If the information available to the competent authority of a Contracting
State is inadequate to determine the profits to be attributed to the permanent
establishment of an enterprise, nothing in this Article shall affect the
application of any law of that State relating to the determination of the tax
liability of a person provided that that law shall be applied, so far as the
information available to the competent authority permits, in accordance with
the principles of this Article.
(7) For the purposes of the preceding paragraphs, the profits to be attributed
to the permanent establishment shall be determined by the same method year by
year unless there is good and sufficient reason to the contrary.
(8) Where profits include items of income which are dealt with separately in
other Articles of this Convention, then the provisions of those Articles shall
not be affected by the provisions of this Article.
(9) Nothing in this Article shall affect the operation of any law of a
Contracting State relating to taxation of profits from insurance with
non-residents provided that if the relevant law in force in either State at
the date of signature of this Convention is varied (otherwise than in minor
respects so as not to affect its general character) the Contracting States
shall consult with each other with a view to agreeing to any amendment of this
paragraph that may be appropriate.
ARTICLE 8
Shipping and Air Transport
---------------------- (1) Profits from the operation of ships or aircraft
derived by a resident of one of the Contracting States shall be taxable only
in that State.
(2) Notwithstanding the provisions of paragraph (1), such profits may be taxed
in the other Contracting State where they are profits from operations of ships
or aircraft confined solely to places in that other State.
(3) The provisions of paragraphs (1) and (2) shall apply in relation to the
share of the profits from the operation of ships or aircraft derived by a
resident of one of the Contracting States through participation in a pool
service, in a joint transport operating organisation or in an international
operating agency.
(4) For the purposes of this Article, profits derived from the carriage by
ships or aircraft of passengers, livestock, mail, goods or merchandise 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.
(5) The provisions of paragraphs (1) and (2) shall apply to profits derived by
the joint Norwegian, Danish and Swedish air transport consortium Scandinavian
Airlines System (SAS), but only insofar as profits derived by Det Norske
Luftfartsselskap A/S (DNL), the Norwegian partner of the Scandinavian Airlines
System (SAS), are in proportion to its share in that organisation.
ARTICLE 9
Associated Enterprises
------------------ (1) Where-
(a) an enterprise of one of the Contracting States participates directly
or
indirectly in the management, control or capital of an enterprise of the other
Contracting State; or
(b) the same persons participate directly or indirectly in the management,
control or capital of an enterprise of one of the Contracting States and an
enterprise of the other Contracting State,
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) If the information available to the competent authority of a Contracting
State is inadequate to determine the profits to be attributed to an
enterprise, nothing in this Article shall affect the application of any law of
that State relating to the determination of the tax liability of a person,
provided that that law shall be applied, so far as the information available
to the competent authority permits, in accordance with the principles of this
Article.
(3) Where profits on which an enterprise of one of the Contracting States has
been charged to tax in that State are also included, by virtue of paragraph
(1) or (2), in the profits of an enterprise of the other Contracting State and
taxed accordingly, the competent authority of the first-mentioned State shall,
with a view to the provision of such relief to the first-mentioned enterprise
as may be appropriate, consult with the competent authority of the other
State.
ARTICLE 10
Dividends
-------- (1) Dividends paid by a company which is a resident of one of the
Contracting States for the purposes of its tax, being dividends to which a
resident of the other Contracting State is beneficially entitled, may be taxed
in that other State.
(2) However, such dividends may also be taxed in the Contracting State of
which the company paying the dividends is a resident for the purposes of its
tax, and according to the law of that State, but the tax so charged shall not
exceed 15 per cent of the gross amount of the dividends. This paragraph shall
not affect the taxation of the company in respect of the profits out of which
the dividends are paid.
(3) The term 'dividends' in this Article means income from shares and other
income assimilated to income from shares by the taxation law of the
Contracting State of which the company making the distribution is a resident
for the purposes of its tax.
(4) The provisions of paragraphs (1) and (2) shall not apply if the person
beneficially entitled to the dividends, being a resident of one of the
Contracting States, carries on business in the other Contracting State of
which the company paying the dividends is a resident, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the holding in
respect of which the dividends are paid is effectively connected with such
permanent establishment or fixed base. In such a case, the provisions of
Article 7 or Article 14, as the case may be, shall apply.
(5) Dividends paid by a company which is a resident of one of the Contracting
States, being dividends to which a person who is not a resident of the other
Contracting State is beneficially entitled, shall be exempt from tax in that
other State except insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or fixed base
situated in that other State. However, 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 Norway for the
purposes of Norwegian tax.
(6) Subject to the provisions of this Convention, a Contracting State may
impose on the income of a company which is a resident of the other Contracting
State, tax in addition to the income tax (in this paragraph called 'the
general income tax') payable by the company in respect of its taxable income;
provided that the additional tax so imposed in respect of a year of income
shall not exceed 15 per cent of the amount by which the taxable income of that
year of income exceeds the general income tax payable in respect of the
taxable income of that year of income.
ARTICLE 11
Interest
------ (1) Interest arising in one of the Contracting States, being interest
to which a resident of the other Contracting State is beneficially entitled,
may be taxed in that other State.
(2) However, such 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) Interest derived by the Government of a Contracting State, or by any other
body exercising governmental functions in, or in a part of, a Contracting
State, or by a bank performing central bank functions in a Contracting State,
shall be exempt from tax in the other Contracting 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
interest from any other form of indebtedness as well as all other income
assimilated to income from money lent by the taxation law of the Contracting
State in which the income arises.
(5) The provisions of paragraphs (1) and (2) shall not apply if the person
beneficially entitled to the interest, being a resident of one of the
Contracting States, carries on business in the other Contracting State, in
which the interest arises, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed
base situated therein, and the indebtedness in respect of which the interest
is paid is effectively connected with such permanent establishment or fixed
base. In such a case, the provisions of Article 7 or Article 14, as the case
may be, shall apply.
(6) Interest shall be deemed to arise in a Contracting State when the payer is
that State itself or a political subdivision or local authority of that State
or a person who is a resident of that State for the purposes of its tax.
Where, however, the person paying the interest, whether he is a resident of a
Contracting State or not, has in a Contracting State or outside both
Contracting States a permanent establishment or fixed base in connection with
which the indebtedness on which the interest is paid was incurred, and such
interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
(7) Where, owing to a special relationship between the payer and the person
beneficially entitled to the interest, or between both of them and some other
person, the amount of the interest paid, having regard to the indebtedness for
which it is paid, exceeds the amount which might have been expected to have
been agreed upon by the payer and the person so entitled in the absence of
such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
interest paid shall remain taxable according to the law of each Contracting
State, but subject to the other provisions of this Convention.
ARTICLE 12
Royalties
-------- (1) Royalties arising in one of the Contracting States, being
royalties to which a resident of the other Contracting State is beneficially
entitled, may be taxed in that other State.
(2) However, such 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;
(b) the use of, or the right to use, any industrial, commercial or
scientific equipment;
(c) the supply of scientific, technical, industrial or commercial
knowledge
or information;
(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 sub-paragraph (a), any such equipment as
is mentioned in sub-paragraph (b) or any such knowledge or information as is
mentioned in sub-paragraph (c);
(e) the use of, or the right to use-
(i) motion picture films;
(ii) films or video tapes for use in connection with television; or
(iii) tapes for use in connection with radio broadcasting; or
(f) total or partial forbearance in respect of the use of a 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 one of the
Contracting States, carries on business in the other Contracting State, in
which the royalties arise, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed
base situated therein, and the right or property in respect of which the
royalties are paid or credited is effectively connected with such permanent
establishment or fixed base. In such a case, the provisions of Article 7 or
Article 14, as the case may be, shall apply.
(5) Royalties shall be deemed to arise in a Contracting State when the payer
is that State itself or a political subdivision or local authority of that
State or a person who is a resident of that State for the purposes of its tax.
Where, however, the person paying the royalties, whether he is a resident of 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 last-mentioned 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, but subject to the other provisions of this
Convention.
ARTICLE 13
Alienation of Property
----------------- (1) Income or gains from the alienation of real property or
of an interest in or over land or of a right to exploit, or to explore for, a
natural resource may be taxed in the Contracting State in which the real
property, the land or the natural resource is situated.
(2) For the purposes of this Article, shares or comparable interests in a
company, the assets of which consist wholly or principally of real property or
of interests in or over land in one of the Contracting States or of rights to
exploit, or to explore for, natural resources in one of the Contracting
States, shall be deemed to be real property situated in the Contracting State
in which the land or the natural resources are situated or in which the
exploration may take place.
(3) Subject to the provisions of paragraph (1), income from the alienation of
capital assets of an enterprise of one of the Contracting States or of capital
assets available to a resident of one of the Contracting States for the
purpose of performing professional services or other independent activities
shall be taxable only in that State, but, where those assets form part of the
business property of a permanent establishment or fixed base situated in the
other Contracting State, such income may be taxed in that other State.
(4) Gains from the alienation of shares in a company the capital of which is
wholly or partly divided into shares and which is a resident of Norway for the
purposes of Norwegian tax, derived by an individual who is a resident of
Australia, may be taxed in Norway.
(5) Gains from the alienation of ships or aircraft operated in international
traffic, or movable property pertaining to the operation of such ships or
aircraft shall be taxable only in the Contracting State of which the alienator
is a resident.
ARTICLE 14
Independent Personal Services
------------------------ (1) Income derived by an individual who is a resident
of one of the Contracting States in respect of professional services or other
independent activities of a similar character shall be taxable only in that
State unless-
(a) he has a fixed base regularly available to him in the other
Contracting
State for the purpose of performing his activities; in which case 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; or
(b) he is present in the other State for a period or periods in any year
of
income exceeding 183 days or he is present in that State for a period or
periods in any two consecutive years of income exceeding in the aggregate 183
days; in
which case the income derived by the individual during such a period or
periods
may be taxed in the other State.
(2) However, to the extent that the above-mentioned income is exempt from tax
in the first-mentioned State, or upon the application of this Article will be
exempt from tax in that State, the income may be taxed in the other State.
(3) The term 'professional services' includes services performed in the
exercise of independent scientific, literary, artistic, educational or
teaching activities as well as in the exercise of the independent activities
of physicians, lawyers, engineers, architects, dentists and accountants.
ARTICLE 15
Dependent Personal Services
---------------------- (1) Subject to the provisions of Articles 16, 18 and
19, salaries, wages and other similar remuneration derived by an individual
who is a resident of one of the Contracting States in respect of an employment
shall be taxable only in that 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 one of the Contracting States in respect of
an employment exercised in the other Contracting State shall be taxable only
in the first-mentioned State if-
(a) the recipient is present in that other State for a period or periods
in
any year of income not exceeding in the aggregate 183 days in the year of
income of that other State or he is present in that other State for a period
or periods in any two consecutive years of income of that other State not
exceeding in the
aggregate 183 days; and
(b) the remuneration is paid by, or on behalf of, an employer who is a
resident of the State of which the recipient is a resident; 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.
However, to the extent that the above-mentioned remuneration is exempt from
tax in the first-mentioned State, or upon the application of this Article will
be exempt from tax in that State, the remuneration may be taxed in the other
State.
(3) Notwithstanding the preceding provisions of this Article, remuneration in
respect of an employment exercised aboard a ship or aircraft operated in
international traffic by a resident of one of the Contracting States may be
taxed in that Contracting State. Where a resident of Norway derives
remuneration in respect of an employment exercised aboard an aircraft operated
in international traffic by the Scandinavian Airlines System (SAS) consortium,
such remuneration shall be taxable only in Norway.
ARTICLE 16
Directors' Fees
------------
Directors' fees and similar payments derived by a resident of one of the
Contracting States in his capacity as a member of the board of directors or of
a similar organ of a company which is a resident of the other Contracting
State may be taxed in that other State.
ARTICLE 17
Entertainers
--------- (1) Notwithstanding the provisions of Articles 14 and 15, income
derived by entertainers (such as theatrical, motion picture, radio or
television artistes and musicians and athletes) from their personal activities
as such may be taxed in the Contracting State in which these activities are
exercised.
(2) Where income in respect of the personal activities of an entertainer as
such accrues not to 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) Notwithstanding the provisions of paragraph (1) and Articles 14 and 15,
income derived from activities performed in a Contracting State by
entertainers shall be exempt from tax in that Contracting State if the visit
to that State is substantially supported or sponsored by the other Contracting
State and the entertainer is certified as qualifying under this provision by
the competent authority of that other State.
ARTICLE 18
Pensions and Annuities
------------------ (1) Pensions (including government pensions and payments
under a Social Security system) and annuities paid to a resident of one of the
Contracting States shall be taxable only in that State.
(2) The term 'annuity' means a stated sum payable periodically at stated times
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 one of the Contracting
States and paid to a resident of the other Contracting State, shall, if it is
not an allowable deduction for the payer, be taxable only in the
first-mentioned State.
ARTICLE 19
Government Service
---------------- (1) Remuneration (other than a pension or annuity) paid by
one of the Contracting States 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
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
performing the services.
(2) The provisions of paragraph (1) shall not apply to remuneration in respect
of services rendered in connection with any trade or business carried on by
one of the Contracting States or a political subdivision or local authority of
that State. In such a case, the provisions of Article 15 or Article 16, as the
case may be, shall apply.
ARTICLE 20
Students
-------
Where a student, who is a resident of one of the Contracting States or who was
a resident of that State immediately before visiting the other Contracting
State and who is temporarily present in that other State solely for the
purpose of his education, receives payments from sources outside that other
State for the purpose of his maintenance or education, those payments shall be
exempt from tax in that other State.
ARTICLE 21
Income Not Expressly Mentioned
-------------------------- (1) Items of income of a resident of one of the
Contracting States which are not expressly mentioned in the foregoing Articles
of this Convention shall be taxable only in that Contracting State.
(2) However, if such income is derived by a resident of one of the Contracting
States from sources in the other Contracting State, such income may also be
taxed in the Contracting State in which it arises.
(3) The provisions of paragraph (1) shall not apply to income derived by a
resident of one of the Contracting States where that income is effectively
connected with a permanent establishment or fixed base situated in the other
Contracting State. In such a case, the provisions of Article 7 or Article 14,
as the case may be, shall apply.
ARTICLE 22
Offshore Activities
-------------- (1) The provisions of this Article have effect notwithstanding
any other provision of this Convention.
(2) A person who is a resident of one of the Contracting States and carries on
activities offshore in the other Contracting State in connection with the
exploration or exploitation of the sea-bed and subsoil and their natural
resources situated in that other State shall, subject to paragraph (3) of this
Article, be deemed in relation to those activities to be carrying on business
in that other State through a permanent establishment or fixed base situated
therein.
(3) The provisions of paragraph (2) shall not apply where the activities are
carried on for a period not exceeding 30 days in the aggregate in any 12
months period. However, for the purposes of this paragraph:
(a) activities carried on by an enterprise associated with another
enterprise shall be regarded as carried on by the enterprise with
which it is associated if the activities in question are substantially
the same as those carried on by the last-mentioned enterprise;
(b) two enterprises shall be deemed to be associated if one is controlled
directly or indirectly by the other, or both are controlled directly or
indirectly by a third person or persons.
(4) (a) Subject to sub-paragraph (b) of this paragraph, salaries, wages and
similar remuneration derived by a resident of one of the Contracting States in
respect of an employment connected with the exploration or exploitation of the
sea-bed and subsoil and their natural resources situated in the other
Contracting State shall, to the extent that the duties are performed offshore
in that other State, be taxable only in that other State, provided that the
employment offshore is carried on for a period exceeding 30 days in the
aggregate in any 12 months period.
(b) Salaries, wages and similar remuneration derived by a resident of one
of
the Contracting States in respect of an employment, shall be taxable only in
that Contracting State if the duties are performed, on behalf of an employer
who is a resident of that State, in connection with the utilisation of
petroleum
reservoirs which extend across the trans-median line between a Contracting
State and any other State, provided that there is an agreement between those
two
States for the joint exploitation of the reservoir, and the exploitation is
performed simultaneously on both sides of the trans-median line.
ARTICLE 23
Source of Income
------------- (1) Income derived by a resident of Norway which, under any one
or more of Articles 6 to 8, Articles 10 to 18 and Article 21 may be taxed in
Australia, shall for the purposes of the income tax law of Australia be deemed
to be income from sources in Australia.
(2) Income derived by a resident of Australia which, under any one or more of
Articles 6 to 8, Articles 10 to 18 and Article 21 may be taxed in Norway,
shall for the purposes of paragraph (1) of Article 25 and of the income tax
law of Australia be deemed to be income from sources in Norway.
ARTICLE 24
Capital
------ (1) Capital represented by real property as defined in Article 6, owned
by a resident of Australia and situated in Norway, may be taxed in Norway.
(2) Capital represented by movable property forming part of the business
property of a permanent establishment which an enterprise of Australia has in
Norway or by movable property pertaining to a fixed base available to a
resident of Australia in Norway for the purpose of performing independent
personal services, may be taxed in Norway.
(3) Capital represented by ships and aircraft operated in international
traffic by a resident of Australia and by movable property pertaining to the
operation of such ships and aircraft, shall be exempt from tax in Norway.
(4) All other elements of capital of a resident of Australia shall be exempt
from tax in Norway.
(5) In the event that Australia should introduce a tax on capital, Australia
shall advise Norway of the introduction of the tax and enter into negotiations
with Norway with a view to agreeing to such amendments to this Article as may
be appropriate.
ARTICLE 25
Methods of Elimination of Double Taxation
---------------------------------- (1) Subject to the provisions of the law of
Australia from time to time in force which relate to the allowance of a credit
against Australian tax of tax paid in a country outside Australia (which shall
not affect the general principle hereof), Norwegian tax paid under the law of
Norway and in accordance with this Convention, whether directly or by
deduction, in respect of income derived by a person who is a resident of
Australia from sources in Norway (not including, in the case of a dividend,
tax paid in respect of the profits out of which the dividend is paid) shall be
allowed as a credit against Australian tax payable in respect of that income.
(2) In the case of Norway:
(a) Where a resident of Norway derives income which, in accordance with
the
provisions of this Convention, may be taxed in Australia, Norway shall,
subject
to the provisions of paragraphs (b) and (c), exempt such income from tax;
(b) Where a resident of Norway derives items of income which, in
accordance
with the provisions of Articles 8, 10, 11 and 12, paragraph (2) of Article 21
and Article 22 may be taxed in Australia, Norway shall allow as a deduction
from the tax on the income of that person an amount equal to the tax paid in
Australia. Such deduction shall not, however, exceed that part of the tax, as
computed before the deduction is given, which is attributable to such items of
income derived from Australia;
(c) Where in accordance with any provision of this Convention income
derived
by a resident of Norway is exempt from tax in Norway, Norway may nevertheless,
in calculating the amount of tax on the remaining income of such resident,
take
into account the exempted income.
ARTICLE 26
Mutual Agreement Procedure
----------------------- (1) Where a resident of one of the Contracting States
considers that the actions of the taxation authorities of one or both of the
Contracting States result or will result for him in taxation not in accordance
with this Convention, he may, notwithstanding the remedies provided by the
domestic laws of those States, present his case to the competent authority of
the Contracting State of which he is a resident. The case must be presented
within three years from the first notification of the action giving rise to
taxation not in accordance with this Convention.
(2) The competent authority shall endeavour, if the claim appears to it to be
justified and if it is not itself able to arrive at an appropriate solution,
to resolve by mutual agreement the case with the competent authority of the
other Contracting State, with a view to the avoidance of taxation not in
accordance with this Convention. The solution so reached shall be implemented
notwithstanding any time limits in the domestic laws of the Contracting
States.
(3) The competent authorities of the Contracting States shall jointly
endeavour to resolve by mutual agreement any difficulties or doubts arising as
to the application of this Convention.
(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
Convention.
ARTICLE 27
Exchange of Information
------------------- (1) The competent authorities of the Contracting States
shall exchange such information as is necessary for the carrying out of this
Convention or of the domestic laws of the Contracting States concerning the
taxes to which this Convention applies insofar as the taxation thereunder is
not contrary to this Convention. The exchange of information is not restricted
by Article 1. Any information received by the competent authority of a
Contracting State shall be treated as secret in the same manner as information
obtained under the domestic laws of that State and shall be disclosed only to
persons or authorities (including courts and administrative bodies) concerned
with the assessment or collection of enforcement or prosecution in respect of,
or the determination of appeals in relation to, the taxes to which this
Convention 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 a Contracting State the obligation-
(a) to carry out administrative measures at variance with the laws or the
administrative practice of that or of the other Contracting State;
(b) to supply information which is not obtainable under the laws or in the
normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or to supply
information the disclosure of which would be contrary to public policy.
ARTICLE 28
Diplomatic and Consular Officials
--------------------------
Nothing in this Convention shall affect the fiscal privileges of diplomatic or
consular officials under the general rules of international law or under the
provisions of special agreements.
ARTICLE 29
Entry into Force
-------------
This Convention shall enter into force on the date on which the Government of
Australia and the Government of the Kingdom of Norway exchange notes through
the diplomatic channel notifying each other that the last of such
constitutional processes as are necessary to bring this Convention into force
in Australia and Norway, as the case may be has been completed, and thereupon
this Convention shall have effect-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 July 1982;
(ii) in respect of other Australian tax, in relation to income of
any year of income beginning on or after 1 July 1982;
(b) in Norway-
in respect of taxes on income or on capital relating to the 1982 and
subsequent calendar years (including accounting periods ending in those
years).
ARTICLE 30
Termination
----------
This Convention shall remain in force indefinitely, but the Government of
Australia or the Government of the Kingdom of Norway may, on or before 30 June
in any calendar year beginning after the expiration of 5 years from the date
of its entry into force, give to the other Government through the diplomatic
channel written notice of termination and, in that event, this Convention
shall cease to be effective-
(a) in Australia-
(i) in respect of withholding tax on income that is derived by a
non-resident, in relation to income derived on or after 1 July in the calendar
year immediately following that in which the notice of termination is given;
(ii) in respect of other Australian tax, in relation to income of
any year of income beginning on or after 1 July in the calendar
year immediately
following that in which the notice of termination is given;
(b) in Norway-
in respect of taxes on income or on capital relating to the calendar year
immediately following that in which the notice is given, and subsequent
calendar years (including accounting periods ending in those years).
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this
Convention.
DONE in duplicate at Canberra this sixth day of May One thousand nine hundred
and eighty-two in the English language.
JOHN HOWARD TORLEIV ANDA
FOR THE GOVERNMENT FOR THE GOVERNMENT
OF AUSTRALIA OF THE KINGDOM OF NORWAY
PROTOCOL
The Government of Australia and
The Government of the Kingdom of Norway
Have agreed at the signing today of the Convention between the two States for
the avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income and on capital upon the following provisions which
shall form an integral part of the said Convention:
(1) With reference to Articles 10, 11 and 12, if after 26 September 1980, in a
Convention for the avoidance of double taxation that is made between Australia
and a third State being a State that is a member of the Organisation for
Economic Co-operation and Development, Australia shall agree to limit the rate
of its taxation-
(a) on dividends paid by a company which is a resident of Australia for
the purposes of Australian tax to which a company that is a resident of the
third State is entitled, to a rate less than that provided in paragraph (2) of
Article 10; or
(b) on interest arising in Australia to which a resident of the third
State is entitled, to a rate less than that provided in paragraph (2) of
Article 11; or
(c) on royalties arising in Australia to which a resident of the third
State is entitled, to a rate less than that provided in paragraph (2) of
Article 12,
the Government of Australia shall immediately inform the Government of the
Kingdom of Norway in writing through the diplomatic channel and shall enter
into negotiations with the Government of the Kingdom of Norway to review the
provisions specified in (a), (b) and (c) above in order to provide the same
treatment for Norway as that provided for the third State.
(2) With reference to Article 25,
(a) if, after 26 September 1980, in a Convention for the avoidance of
double taxation that is made between Norway and a third State being a State
that is a member of the Organisation for Economic Co-operation and
Development,
Norway shall agree to give special relief (holding privilege) from its tax in
respect of dividends paid by a company which is a resident of that third State
to a company resident in Norway, (not being relief that represents a
continuation of relief provided for in any such Convention with that State
that
was in force at that date) the Government of the Kingdom of Norway shall
immediately inform the Government of Australia in writing through the
diplomatic channel and shall enter into negotiations with the Government of
Australia to
review the provisions of Article 25 in order to provide the same relief in
respect of dividends paid by a company which is a resident of Australia;
(b) if Norway should by note forwarded through the diplomatic channel so
request, paragraph (2) of Article 25 shall be replaced by the following text,
which shall enter into force on the 30th day after receipt of the note is
confirmed through the diplomatic channel, and shall apply in respect of taxes
on income relating to the calendar year (including accounting periods ending
in
such year) immediately following that in which the exchange of notes is made:
'(2) In the case of Norway:
Where a resident of Norway derives income which in accordance with the
provisions of this Convention may be taxed in Australia, Norway shall allow as
a deduction from the income tax of that person an amount equal to the tax paid
in
Australia. Such deduction shall not, however, exceed that part of the
Norwegian
tax, as computed before the deduction is given, which is appropriate to the
income derived from Australia.'
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this
Protocol.
DONE in duplicate at Canberra this sixth day of May One thousand nine hundred
and eighty-two in the English language.
JOHN HOWARD TORLEIV ANDA
FOR THE GOVERNMENT FOR THE GOVERNMENT
OF AUSTRALIA OF THE KINGDOM OF NORWAY''.
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