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This is a Bill, not an Act. For current law, see the Acts databases.
1996
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Taxation Laws
Amendment (International Tax Agreements) Bill
1996
No. ,
1996
(Treasury)
A Bill
for an Act to amend the International Tax Agreements Act 1953, and for
related purposes
9609720—1,675/26.6.1996—(97/96) Cat.
No. 96 4857 7 ISBN 0644 450789
Contents
A Bill for an Act to amend the International Tax
Agreements Act 1953, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the Taxation Laws Amendment (International
Tax Agreements) Act 1996.
This Act commences on the day on which it receives the Royal
Assent.
Each Act that is specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule concerned, and any
other item in a Schedule to this Act has effect according to its
terms.
1 Subsection 3(1)
Insert:
the Taipei agreement means:
(a) the Agreement between the Australian Commerce and Industry Office and
the Taipei Economic and Cultural Office concerning the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income;
and
(b) the annex to that agreement;
a copy of each of which in the English language is set out in Schedule
41.
2 After section 11ZE
Insert:
(1) Subject to this Act, on and after the date of entry into effect of the
Taipei agreement, the provisions of the agreement, so far as they affect
Australian tax, have, and are taken to have had, the force of law according to
their tenor.
(2) For the purposes of the Assessment Act, if:
(a) a person derives income, profits or gains; and
(b) for the purposes of the Taipei agreement, the person is a resident of
the foreign territory; and
(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the agreement,
the income, profits or gains may be taxed in the Australian territory;
the income, profits or gains are taken to be derived from sources in the
Australian territory.
(3) For the purposes of the Assessment Act and Article 22 of the Taipei
agreement, if:
(a) a person derives income, profits or gains; and
(b) for the purposes of the agreement, the person is a resident of the
Australian territory; and
(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the agreement,
the income, profits or gains may be taxed in the foreign territory;
the income, profits or gains are taken to have been derived from sources in
the foreign territory.
(4) The provisions of the Taipei agreement do not have the effect of
subjecting to Australian tax any interest or royalties paid by a resident of the
Australian territory to a resident of the foreign territory that, apart from the
agreement, would not be subject to Australian tax.
(5) Section 170 of the Assessment Act does not prevent the amendment of an
assessment made before the commencement of this section for the purpose of
giving effect to the Taipei agreement.
(6) If:
(a) an exchange of letters takes place for the purposes of paragraph 2 of
the Annex mentioned in paragraph (b) of the definition of Taipei
agreement in subsection 3(1); and
(b) as a result of the exchange, income, profits or gains derived by an
organisation before the exchange become taxable under paragraph 2 of the Annex
solely in the Australian territory or solely in the foreign territory;
and
(c) before the exchange and whether before or after the commencement of
this section, an assessment was made in which the income, profits or gains were
not taxed in that way;
section 170 of the Assessment Act does not prevent the amendment of the
assessment for the purpose of taxing the income, profits or gains in that
way.
(7) In this section:
Australian territory means the territory mentioned in
subparagraph 1(a) of Article 2 of the Taipei agreement.
foreign territory means the territory mentioned in
subparagraph 1(b) of Article 2 of the Taipei agreement.
3 At the end of the Act
Add:
THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE AND THE TAIPEI ECONOMIC AND
CULTURAL OFFICE,
DESIRING to conclude an agreement concerning the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income,
HAVE AGREED as follows:
This Agreement shall apply to persons who are residents of one or both
of the territories.
1. The existing taxes to which this Agreement shall apply
are:
(a) in the territory in which the taxation law administered by the
Australian Taxation Office is applied:
the income tax, and the resource
rent tax in respect of offshore projects relating to exploration for or
exploitation of petroleum resources, imposed under that law;
(b) in the
territory in which the taxation law administered by the Department of Taxation,
Ministry of Finance, Taipei is applied:
the profit seeking enterprise
income tax and the individual consolidated income tax, imposed under that
law.
2. This Agreement shall apply also to any identical or substantially
similar taxes on income, profits or gains which are imposed after the date of
signature of this Agreement in addition to, or in place of, the existing taxes.
The competent authorities will notify each other as soon as practicable of any
substantial changes which have been made in the taxation laws of their
respective territories.
1. In this Agreement, unless the context otherwise
requires:
(a) the term "territory" means the territory referred to in
subparagraph 1(a) or 1(b) of Article 2, as the case requires;
(b) the
term "person" includes an individual, a company and any other body of
persons;
(c) the term "company" means any body corporate or any entity
which is treated as a company or body corporate for tax purposes;
(d) the
terms "enterprise of a territory" and "enterprise of the other territory" mean
respectively an enterprise carried on by a resident of a territory or an
enterprise carried on by a resident of the other territory, as the context
requires;
(e) the term "tax" means tax imposed under the law of a
territory, being a tax to which this Agreement applies by virtue of Article 2,
but does not include any penalty or interest imposed under that
law;
(f) the term "competent authority" means, in the case of the
territory in which the taxation law administered by the Australian Taxation
Office is applied, the Commissioner of Taxation or an authorised representative
of the Commissioner and, in the case of the territory in which the taxation law
administered by the Department of Taxation, Ministry of Finance, Taipei is
applied, the Director-General of the Department of Taxation or an authorised
representative of the Director-General.
2. As regards the application of
this Agreement at any time in a territory, any term not defined in this
Agreement shall, unless the context otherwise requires, have the meaning which
it has at that time under the law of that territory concerning the taxes to
which this Agreement applies, any meaning under the applicable tax law of that
territory prevailing over a meaning given to the term under other laws of that
territory.
1. For the purposes of this Agreement, a person is a resident of a
territory if the person is a resident of that territory for the purposes of its
tax.
2. A person is not a resident of the territory in which the taxation
law administered by the Australian Taxation Office is applied for the purposes
of this Agreement if the person is liable to tax in that territory in respect
only of income from sources in that territory.
3. Where by reason of the
preceding provisions of this Article a person, being an individual, is a
resident of both territories, then the status of the person shall be determined
in accordance with the following rules:
(a) the person shall be deemed to
be a resident solely of the territory in which a permanent home is available to
the person;
(b) if a permanent home is available to the person in both
territories, or in neither of them, the person shall be deemed to be a resident
solely of the territory in which the person has an habitual abode;
(c) if
the person has an habitual abode in both territories or in neither of them, the
person shall be deemed to be a resident solely of the territory with which the
person's economic and personal relations are closer.
4. Where by reason
of the provisions of paragraph 1 a person other than an individual is a resident
of both territories, then it shall be deemed to be a resident solely of the
territory in which its place of incorporation is situated.
1. For the purposes of this Agreement, the term "permanent
establishment", in relation to an enterprise, means a fixed place of business
through which the business of the enterprise is wholly or partly carried
on.
2. The term "permanent establishment" includes
especially:
(a) a place of management;
(b) a branch;
(c) an
office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil
or gas well, a quarry or any other place of extraction of natural
resources;
(g) an agricultural, pastoral or forestry
property;
(h) a building site or construction, installation or assembly
project which exists for more than 6 months; and
(i) the furnishing of
services, including consultancy services in a territory by an enterprise of the
other territory through employees or other personnel engaged by the enterprise
for such purpose, but only where those activities (for the same or a connected
project) within the first-mentioned territory continue for a period or periods
aggregating more than 120 days within any twelve month period.
3. An
enterprise shall not be deemed to have a permanent establishment merely by
reason of:
(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the enterprise;
or
(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of storage, display or delivery;
or
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another enterprise;
or
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or of collecting information, for
the enterprise; or
(e) the maintenance of a fixed place of business
solely for the purpose of activities which have a preparatory or auxiliary
character for the enterprise, such as advertising or scientific
research.
4. An enterprise shall be deemed to have a permanent
establishment in a territory and to carry on business through that permanent
establishment if:
(a) it carries on supervisory activities in that
territory for more than 6 months in connection with a building site, or a
construction, installation or assembly project, which is being undertaken in
that territory; or
(b) substantial equipment is being used in that
territory by, for or under contract with, the enterprise where that use
continues for more than 3 months.
5. A person acting in a territory on
behalf of an enterprise of the other territory - 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 territory
if:
(a) the person has, and habitually exercises in that territory, an
authority to conclude contracts on behalf of the enterprise, unless the person's
activities are limited to the purchase of goods or merchandise for the
enterprise; or
(b) in so acting, the person manufactures or processes in
that territory for the enterprise goods or merchandise belonging to the
enterprise.
6. An enterprise of a territory shall not be deemed to have a
permanent establishment in the other territory merely because it carries on
business in that other territory through a person who is a broker, general
commission agent or any other agent of an independent status and is acting in
the ordinary course of the person's business as such a broker or
agent.
7. The fact that a company which is a resident of a territory
controls or is controlled by a company which is a resident of the other
territory, or which carries on business in that other territory (whether through
a permanent establishment or otherwise), shall not of itself make either company
a permanent establishment of the other.
8. The principles set forth in
the preceding paragraphs of this Article shall be applied in determining for the
purposes of paragraph 5 of Article 11 and paragraph 5 of Article 12 whether an
enterprise, not being an enterprise of either territory, has a permanent
establishment in a territory.
1. Income from real property may be taxed in the territory in which the
real property is situated.
2. In this Article, the term "real
property":
(a) in the case of the territory in which the taxation law
administered by the Australian Taxation Office is applied, has the meaning it
has under the law of that territory, and includes:
(i) a lease of land
and any other interest in or over land, whether improved or not;
and
(ii) a right to receive variable or fixed payments as consideration
for the exploitation of or the right to explore for or exploit, or in respect of
the proceeds from the exploitation of, mineral deposits, oil or gas wells,
quarries or other places of extraction or exploitation of natural resources;
and
(b) in the case of the territory in which the taxation law
administered by the Department of Taxation, Ministry of Finance, Taipei is
applied, has the meaning it has under the law of that territory, and
includes:
(i) property accessory to immovable property, livestock and
equipment used in agriculture and forestry;
(ii) rights to which the
provisions of the general law respecting landed property apply;
and
(iii) usufruct of immovable property and rights to variable or fixed
payments as consideration for the exploitation of or the right to explore for or
exploit, or in respect of the exploitation of, mineral deposits, sources and
other natural resources; but
(c) shall not include ships, boats and
aircraft.
3. Any interest or right referred to in paragraph 2 shall be
regarded as situated where the land, mineral, oil or gas deposits, quarries or
natural resources, as the case may be, are situated or where the exploration may
take place.
4. The provisions of paragraph 1 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 and 4 shall also apply to
income from real property of an enterprise and to income from real property used
for the performance of independent personal services.
1. The profits of an enterprise of a territory shall be taxable only in
that territory unless the enterprise carries on business in the other territory
through a permanent establishment situated in that other territory. If the
enterprise carries on business in that manner, the profits of the enterprise may
be taxed in the other territory 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 territory carries on business in the other territory
through a permanent establishment situated in that other territory, there shall
be attributed to that permanent establishment in each territory the profits
which that permanent establishment 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 determining the profits of a permanent
establishment, there shall be allowed as deductions expenses which are incurred
for the purposes of the permanent establishment (including executive and general
administrative expenses so incurred) and which would be deductible if the
permanent establishment were an independent entity which paid those expenses,
whether incurred in the territory in which the permanent establishment is
situated or elsewhere.
4. No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that permanent establishment of
goods or merchandise for the enterprise.
5. Nothing in this Article shall
affect the application of any law of a territory relating to the determination
of the tax liability of a person, including determinations in cases where the
information available to the competent authority of that territory is inadequate
to determine the profits to be attributed to a permanent establishment, provided
that that law shall be applied, so far as it is practicable to do so,
consistently with the principles of this Article.
6. Where profits
include items of income or gains which are dealt with separately in other
Articles of this Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
7. Nothing in this Article
shall affect the operation of any law of a territory relating to tax imposed on
profits from insurance with non-residents provided that if the relevant law in
force in either territory at the date of signature of this Agreement is varied
(otherwise than in minor respects so as not to affect its general character) the
parties to this Agreement shall consult each other with a view to facilitating
any amendment of this paragraph as may be
appropriate.
8. Where:
(a) a resident of a territory is
beneficially entitled, whether directly or through one or more interposed trust
estates, to a share of the business profits of an enterprise carried on in the
other territory by the trustee of a trust estate other than a trust estate which
is treated as a company for tax purposes; and
(b) in relation to that
enterprise, that trustee would, in accordance with the principles of Article 5,
have a permanent establishment in that other territory,
the enterprise
carried on by the trustee shall be deemed to be a business carried on in the
other territory by that resident through a permanent establishment situated in
that other territory and that share of business profits shall be attributed to
that permanent establishment.
1. Profits derived by an enterprise of a territory from the operation
of ships or aircraft shall be taxable only in that
territory.
2. Notwithstanding the provisions of paragraph 1, such profits
shall be taxed in the other territory to the extent that they are profits
derived directly or indirectly from ship or aircraft operations confined solely
to places in that other territory.
3. The profits to which the provisions
of paragraphs 1 and 2 apply shall include profits from:
(a) the lease of
ships or aircraft on a full time, voyage or bareboat basis, and of containers
and related equipment, which is merely incidental to the international operation
of ships or aircraft by the lessor, provided that the leased ships or aircraft,
or the containers and related equipment, are used in international operations by
the lessee; and
(b) the operation of ships or aircraft derived through
participation in a pool, a joint business or an international operating
agency.
4. For the purposes of this Article, profits derived from the
carriage by ships or aircraft of passengers, livestock, mail, goods or
merchandise which are shipped in a territory and discharged at a place in that
territory shall be treated as profits from ship or aircraft operations confined
solely to places in that territory.
1. Where
(a) an enterprise of a territory participates directly
or indirectly in the management, control or capital of an enterprise of the
other territory; or
(b) the same persons participate directly or
indirectly in the management, control or capital of an enterprise of a territory
and an enterprise of the other territory,
and in either case conditions
operate between the two enterprises in their commercial or financial relations
which differ from those which might be expected to operate between independent
enterprises dealing wholly independently with one another, then any profits
which, but for those conditions, might have been expected to accrue to one of
the enterprises, but, by reason of those conditions, have not so accrued, may be
included in the profits of that enterprise and taxed
accordingly.
2. Nothing in this Article shall affect the application of
any law of a territory relating to the determination of the tax liability of a
person, including determinations in cases where the information available to the
competent authority of that territory is inadequate to determine the profits to
be attributed to an enterprise, provided that that law shall be applied, so far
as it is practicable to do so, consistently with the principles of this
Article.
3. Where profits on which an enterprise of a territory has been
charged to tax in that territory are also included, by virtue of the provisions
of paragraph 1 or 2, in the profits of an enterprise of the other territory and
charged to tax in that other territory, and the profits so included are profits
which might have been expected to have accrued to that enterprise of the other
territory 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
territory shall make an appropriate adjustment to the amount of tax charged on
those profits in the first-mentioned territory. In determining such an
adjustment, due regard shall be had to the other provisions of this Agreement
and for this purpose the competent authorities shall if necessary consult each
other.
1. Dividends paid by a company which is a resident of a territory for
the purposes of its tax, being dividends to which a resident of the other
territory is beneficially entitled, may be taxed in that other
territory.
2. However, those dividends may also be taxed in the territory
of which the company paying the dividends is a resident for the purposes of its
tax, and according to the law of that territory, but the tax so charged shall
not exceed:
(a) in the territory in which the taxation law administered
by the Australian Taxation Office is applied:
(i) 10 per cent of the
gross amount of the dividends, to the extent to which the dividends have been
fully "franked" in accordance with the federal law of that territory relating to
its income tax; and
(ii) 15 per cent of the gross amount of the dividends
in all other cases; and
(b) in the territory in which the taxation law
administered by the Department of Taxation, Ministry of Finance, Taipei is
applied:
(i) 10 per cent of the gross amount of the dividends, where the
dividends are paid to a company (other than a partnership) which holds directly
at least 25 per cent of the capital of the company paying the dividends;
and
(ii) 15 per cent of the gross amount of the dividends in all other
cases,
provided that if the relevant law in either territory at the date
of signature of this Agreement is varied, otherwise than in minor respects so as
to not affect its general character, the parties to this Agreement shall consult
each other with a view to facilitating any amendment of this paragraph as may be
appropriate.
3. The term "dividends" in this Article means income from
shares and other income assimilated to income from shares by the law, relating
to tax, of the territory of which the company making the distribution is a
resident for the purposes of its tax.
4. The provisions of paragraphs 1
and 2 shall not apply if the person beneficially entitled to the dividends,
being a resident of a territory, carries on business in the other territory of
which the company paying the dividends is a resident, through a permanent
establishment situated in that other territory, or performs in that other
territory independent personal services from a fixed base situated in that other
territory, and the holding in respect of which the dividends are paid is
effectively connected with that permanent establishment or fixed base. In that
case the provisions of Article 7 or Article 14, as the case may be, shall
apply.
5. Dividends paid by a company which is a resident of a territory,
being dividends to which a person who is not a resident of the other territory
is beneficially entitled, shall be exempt from tax in that other territory
except insofar as the holding in respect of which the dividends are paid is
effectively connected with a permanent establishment or a fixed base situated in
that other territory. This paragraph shall not apply in relation to dividends
paid by any company which is a resident of the territory in which the taxation
law administered by the Australian Taxation Office is applied for the purposes
of tax imposed by that territory and which is also a resident of the territory
in which the taxation law administered by the Department of Taxation, Ministry
of Finance, Taipei is applied for the purposes of tax imposed by that
territory.
1. Interest arising in a territory, being interest to which a resident
of the other territory is beneficially entitled, may be taxed in that other
territory.
2. However, that interest may also be taxed in the territory
in which it arises, and according to the law of that territory, but the tax so
charged shall not exceed 10 per cent of the gross amount of the
interest.
3. The term "interest" in this Article includes interest from
government securities or from bonds or debentures, whether or not secured by
mortgage and whether or not carrying a right to participate in profits, interest
from any other form of indebtedness and all other income assimilated to income
from money lent by the law, relating to tax, of the territory in which the
income arises.
4. The provisions of paragraphs 1 and 2 shall not apply if
the person beneficially entitled to the interest, being a resident of a
territory, carries on business in the other territory, in which the interest
arises, through a permanent establishment situated in that other territory, or
performs in that other territory independent personal services from a fixed base
situated in that other territory, and the indebtedness in respect of which the
interest is paid is effectively connected with that permanent establishment or
fixed base. In that case the provisions of Article 7 or Article 14, as the case
may be, shall apply.
5. Interest shall be deemed to arise in a territory
when the payer is an authority of that territory or a subdivision or local
authority of that territory or a person who is a resident of that territory for
the purposes of its tax. Where, however, the person paying the interest, whether
the person is a resident of a territory or not, has in a territory a permanent
establishment or fixed base in connection with which the indebtedness on which
the interest is paid was incurred, and that interest is borne by that permanent
establishment or fixed base, then the interest shall be deemed to arise in the
territory in which the permanent establishment or fixed base is
situated.
6. Where, by reason of a special relationship between the payer
and the person beneficially entitled to the interest, or between both of them
and some other person, the amount of the interest paid, having regard to the
indebtedness for which it is paid, exceeds the amount which might have been
expected to have been agreed upon by the payer and the person so entitled in the
absence of that relationship, the provisions of this Article shall apply only to
the last-mentioned amount. In that case, the excess part of the amount of the
interest paid shall remain taxable according to the law, relating to tax, of
each territory, but subject to the other provisions of this
Agreement.
1. Royalties arising in a territory, being royalties to which a
resident of the other territory is beneficially entitled, may be taxed in that
other territory.
2. However, those royalties may also be taxed in the
territory in which they arise, and according to the law of that territory, but
the tax so charged shall not exceed 12.5 per cent of the gross amount of the
royalties.
3. The term "royalties" in this Article means payments or
credits, whether periodical or not, and however described or computed, to the
extent to which they are made as consideration for:
(a) the use of, or
the right to use, any copyright, patent, design or model, plan, secret formula
or process, trademark or other like property or right; or
(b) the use of,
or the right to use, any industrial, commercial or scientific equipment;
or
(c) the supply of scientific, technical, industrial or commercial
knowledge or information; or
(d) the supply of any assistance that is
ancillary and subsidiary to, and is furnished as a means of enabling the
application or enjoyment of, any such property or right as is mentioned in
subparagraph (a), any such equipment as is mentioned in subparagraph (b) or any
such knowledge or information as is mentioned in subparagraph (c) of this
paragraph; or
(e) the reception of, or the right to receive, visual
images or sounds, or both, transmitted to the public by:
(i) satellite;
or
(ii) cable, optic fibre or similar technology; or
(f) the use
in connection with television broadcasting or radio broadcasting, or the right
to use in connection with television broadcasting or radio broadcasting, visual
images or sounds, or both, transmitted by:
(i) satellite;
or
(ii) cable, optic fibre or similar technology; or
(g) the use
of, or the right to use:
(i) motion picture films; or
(ii) films
or video tapes for use in connection with television; or
(iii) tapes for
use in connection with radio broadcasting; or
(h) total or partial
forbearance in respect of the use or supply of any property or right referred to
in this paragraph.
4. The provisions of paragraphs l and 2 shall not
apply if the person beneficially entitled to the royalties, being a resident of
a territory, carries on business in the other territory, in which the royalties
arise, through a permanent establishment situated in that other territory, or
performs in that other territory independent personal services from a fixed base
situated in that other territory, and the property or right in respect of which
the royalties are paid or credited is effectively connected with that permanent
establishment or fixed base. In that case the provisions of Article 7 or Article
14, as the case may be, shall apply.
5. Royalties shall be deemed to
arise in a territory when the payer is an authority of that territory or a
subdivision or local authority of that territory or a person who is a resident
of that territory for the purposes of its tax. Where, however, the person paying
the royalties, whether the person is a resident of a territory or not, has in a
territory 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 territory in which the permanent establishment or fixed base is
situated.
6. Where, by reason of a special relationship between the payer
and the person beneficially entitled to the royalties, or between both of them
and some other person, the amount of the royalties paid or credited, having
regard to what they are paid or credited for, exceeds the amount which might
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, relating to tax, of each territory, but subject to the other provisions
of this Agreement.
1. Income, profits or gains derived by a resident of a territory from
the alienation of real property situated in the other territory may be taxed in
that other territory.
2. Income, profits or gains from the alienation of
property, other than real property, that forms part of the business property of
a permanent establishment which an enterprise of a territory has in the other
territory or pertains to a fixed base available in that other territory to a
resident of the first-mentioned territory for the purpose of performing
independent personal services, including income, profits or gains from the
alienation of that permanent establishment (alone or with the whole enterprise)
or of that fixed base, may be taxed in that other territory.
3. Income,
profits or gains from the alienation of ships or aircraft operated in
international traffic, or of property (other than real property) pertaining to
the operation of those ships or aircraft, shall be taxable only in the territory
of which the enterprise operating those ships or aircraft is a
resident.
4. Income, profits or gains derived by a resident of a
territory from the alienation of shares or comparable interests in a company,
the assets of which consist wholly or principally of real property situated in
the other territory, may be taxed in that other territory.
5. Nothing in
this Agreement shall affect the application of a law of a territory relating to
the taxation of gains of a capital nature derived from the alienation of any
property other than that to which any of the preceding paragraphs of this
Article apply.
6. In this Article, the term "real property" has the same
meaning as it has in Article 6.
7. The situation of real property shall
be determined for the purposes of this Article in accordance with paragraph 3 of
Article 6.
1. Income derived by an individual who is a resident of a territory in
respect of professional services or other activities of an independent character
shall be taxable only in that territory unless a fixed base is regularly
available to the individual in the other territory for the purpose of performing
the individual's activities. If such a fixed base is available to the
individual, the income may be taxed in the other territory but only so much of
it as is attributable to activities exercised from that fixed
base.
2. The term "professional services" includes services performed in
the exercise of independent scientific, literary, artistic, educational or
teaching activities as well as in the exercise of the independent activities of
physicians, lawyers, engineers, architects, dentists and
accountants.
1. Subject to the provisions of Articles 16, 18 and l9, salaries, wages
and other similar remuneration derived by an individual who is a resident of a
territory in respect of an employment shall be taxable only in that territory
unless the employment is exercised in the other territory. If the employment is
so exercised, such remuneration as is derived from that exercise may be taxed in
that other territory.
2. Notwithstanding the provisions of paragraph 1,
remuneration derived by an individual who is a resident of a territory in
respect of an employment exercised in the other territory shall be taxable only
in the first-mentioned territory if:
(a) the recipient is present in the
other territory for a period or periods not exceeding in the aggregate 183 days
in any twelve month period commencing or ending in the year of income concerned;
and
(b) the remuneration is paid by, or on behalf of, an employer who is
not a resident of that other territory; 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 territory; and
(d) the
remuneration is, or upon the application of this Article will be, subject to tax
in the first-mentioned territory.
3. Notwithstanding the preceding
provisions of this Article, remuneration derived in respect of an employment
exercised aboard a ship or aircraft operated by an enterprise of a territory in
international traffic shall be taxable only in that territory.
Directors' fees and similar payments derived by a resident of a
territory in the person's capacity as a member of the board of directors of a
company which is a resident of the other territory may be taxed in that other
territory.
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 sportspersons from their personal activities as such
may be taxed in the territory in which these activities are
exercised.
2. Where income in respect of the personal activities of an
entertainer or a sportsperson as such accrues not to that entertainer or
sportsperson but to another person, that income may, notwithstanding the
provisions of Articles 7, 14 and 15, be taxed in the territory in which the
activities of the entertainer or sportsperson are exercised.
1. All pensions and annuities paid to a resident of a territory shall
be taxable only in that territory.
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.
1. Salaries, wages and other similar remuneration, other than a pension
or annuity, paid by an authority administering a territory or a subdivision of
that territory or by a local authority of that territory to any individual in
respect of services rendered in the discharge of public or administrative
functions on behalf of such an authority shall be taxable only in that
territory. However, such salaries, wages and other similar remuneration shall be
taxable only in the other territory if the services are rendered in that other
territory and the recipient is a resident of that other territory
who:
(a) is a citizen or national of that territory; or
(b) did
not become a resident of that territory solely for the purpose of performing the
services.
2. The provisions of paragraph 1 shall not apply to salaries,
wages and other similar remuneration in respect of services rendered in
connection with any trade or business carried on by any authority referred to in
paragraph 1. In that case, the provisions of Article 15 or Article 16 , as the
case may be, shall apply.
Where a student, who is a resident of a territory or who was a resident
of that territory immediately before visiting the other territory and who is
temporarily present in that other territory solely for the purpose of the
student's education, receives payments from sources outside that other territory
for the purpose of the student's maintenance or education, those payments shall
be exempt from tax in that other territory.
1. Items of income of a resident of a territory, wherever arising, not
dealt with in the foregoing Articles of this Agreement shall be taxable only in
that territory.
2. However, any such income derived by a resident of a
territory from sources in the other territory may also be taxed in that other
territory.
3. The provisions of paragraph 1 shall not apply to income,
other than income from real property as defined in paragraph 2 of Article 6,
derived by a resident of a territory where that income is effectively connected
with a permanent establishment or fixed base situated in the other territory. In
that case, the provisions of Article 7 or Article 14, as the case may be, shall
apply.
Subject to the provisions of the law of a territory from time to time
in force relating to the allowance of a credit against tax payable in that
territory of tax paid outside that territory (which shall not affect the general
principle of this Article), tax paid under the law of the other territory and in
accordance with this Agreement, whether directly or by deduction, in respect of
income derived by a person who is a resident of the first-mentioned territory
from sources in the other territory shall be allowed as a credit against tax
payable in the first-mentioned territory in respect of that income. The amount
of credit, however, shall not exceed the amount of the tax in the
first-mentioned territory on that income computed in accordance with its
taxation laws and regulations.
1. Where a person considers that the actions of the competent authority
of one or both of the territories result or will result for the person in
taxation not in accordance with this Agreement, the person may, irrespective of
the remedies provided by the domestic law of those territories concerning taxes
to which this Agreement applies, present a case to the competent authority of
the territory of which the person is a resident. The case must be presented
within 3 years from the first notification of the action resulting in taxation
not in accordance with this Agreement.
2. The competent authority shall
endeavour, if the claim appears to it to be justified and if it is not itself
able to arrive at a satisfactory solution, to resolve the case with the
competent authority of the other territory, with a view to the avoidance of
taxation which is not in accordance with this Agreement. The solution so reached
shall be implemented notwithstanding any time limits in the domestic law of the
territories.
3. The competent authorities shall jointly endeavour to
resolve any difficulties or doubts arising as to the interpretation or
application of this Agreement. They may also consult together for the
elimination of double taxation in cases not provided for in this
Agreement.
4. The competent authorities may communicate with each other
directly for the purpose of giving effect to the provisions of this
Agreement.
1. The competent authorities shall exchange such information as is
necessary for carrying out this Agreement or of the domestic law of each of the
territories concerning taxes to which this Agreement applies insofar as the
taxation under that law is not contrary to this Agreement. Any information
received by the competent authority of a territory shall be treated as secret in
the same manner as information obtained under the domestic law of that territory
and shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes to which this Agreement applies. Such persons or
authorities shall use the information only for such purposes. They may disclose
the information in public court proceedings or in judicial
decisions.
2. In no case shall the provisions of paragraph 1 be construed
so as to impose on the competent authority of a territory the
obligation:
(a) to carry out administrative measures at variance with the
law or the administrative practice of that or of the other territory;
or
(b) to supply information which is not obtainable under the law or in
the normal course of the administration of that or of the other territory;
or
(c) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or to supply
information the disclosure of which would be contrary to public
policy.
This Agreement shall enter into effect on the date on which the
Australian Commerce and Industry Office and the Taipei Economic and Cultural
Office notify each other in writing that the last of such things has been done
as is necessary to give this Agreement effect in the domestic law of the
respective territories. This Agreement shall have effect:
(a) in both
territories, in respect of:
(i) withholding tax on income, profits or
gains derived by a non-resident, in relation to income, profits or gains derived
on or after the first day of the second month next following that in which the
Agreement enters into effect;
(ii) tax in relation to profits to which
Article 8 applies, on or after 1 January 1991;
(b) in respect of
other tax of the territory in which the taxation law administered by the
Australian Taxation Office is applied, in relation to income, profits or gains
of any year of income beginning on or after 1 July in the calendar year
next following that in which the Agreement enters into effect;
(c) in
respect of other tax of the territory in which the taxation law administered by
the Department of Taxation, Ministry of Finance, Taipei is applied, in relation
to income, profits or gains of any year of income beginning on or after
1 January in the calendar year next following that in which the Agreement
enters into effect.
This Agreement shall continue in effect indefinitely, but an authority
administering either territory may, on or before 30 June in any calendar year
beginning after the expiration of 5 years from the date of its entry into
effect, give to the other written notice of termination and, in that event, the
Agreement shall cease to be effective:
(a) in both territories, in
respect of withholding tax on income, profits or gains derived by a
non-resident, in relation to income, profits or gains derived on or after the
first day of the second month next following that in which the notice of
termination is given;
(b) in respect of other tax of the territory in
which the taxation law administered by the Australian Taxation Office is
applied, in relation to income, profits or gains of any year of income beginning
on or after 1 July in the calendar year next following that in which the
notice of termination is given;
(c) in respect of other tax of the
territory in which the taxation law administered by the Department of Taxation,
Ministry of Finance, Taipei is applied, in relation to income, profits or gains
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, have signed this
Agreement.
DONE in duplicate at Canberra this 29th day of May 1996 in
the English and Chinese languages, both texts being equally authentic. In case
of any divergence of interpretation, the English text shall
prevail.
FOR THE AUSTRALIAN COMMERCE FOR THE TAIPEI
ECONOMIC
AND INDUSTRY OFFICE: AND CULTURAL
OFFICE:
[Signed:] [Signed:]
COLIN HESELTINE CHIEN-HSION HONG
THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE AND THE TAIPEI ECONOMIC
AND CULTURAL OFFICE,
HAVING REGARD to the Agreement concerning the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes signed today at Canberra (in this Annex called
"Agreement");
HAVE AGREED as follows:
1. If a subsequent agreement
that is given effect under the International Tax Agreements Act 1953 in the
territory in which the taxation law administered by the Australian Taxation
Office is applied, includes a Non-Discrimination Article, the parties to this
Annex will enter into negotiations with a view to providing the same treatment
as is provided for in the Non-Discrimination Article;
2. Income, profits
or gains derived by an organisation, or its successors, agreed by the competent
authorities in an exchange of letters for the purposes of this paragraph as
carrying on activities promoting trade, investment and cultural exchanges
between the territories, shall be taxable solely in the territory on whose
behalf the activities are carried on. The competent authorities will also
specify in their exchange of letters the date from which the organisation shall
be so taxable.
This Annex shall form an integral part of the
Agreement.
IN WITNESS WHEREOF the undersigned, being duly authorised,
have signed this Annex.
DONE in duplicate at Canberra this 29th day
of May 1996 in the English and Chinese languages, both texts being equally
authentic. In case of any divergence of interpretation, the English text shall
prevail.
FOR THE AUSTRALIAN COMMERCE FOR THE TAIPEI ECONOMIC AND
INDUSTRY OFFICE: AND CULTURAL OFFICE:
[Signed:] [Signed:]
COLIN
HESELTINE CHIEN-HSION HONG
1 Subparagraph
23AF(17)(b)(ii)
Omit “between”, substitute “applying to”.
2 Section 317 (after subparagraph (b)(i) of the
definition of double tax agreement)
Insert:
; or (ia) concerning the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income; or
3 Application
The amendments made by this Schedule apply to an agreement that enters into
effect after the commencement of the Schedule.
1 Paragraphs 3A(1)(a), (2)(a) and
(2)(b)
Omit “between”, substitute “applying to”.
2 Paragraph 3A(2)(c)
Omit “been entered into between”, substitute “applied
to”.
3 Application
The amendments made by this Schedule apply to an agreement that enters into
effect after the commencement of the Schedule.