Income Tax (International Agreements) Act 1969 - Legislation

Income Tax (International Agreements)

No. 24 of 1969

An Act to amend the Income Tax (International Agreements) Act 1953-1968.

[Assented to 4 June 1969]

BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Short title and citation.

1.—(1.) This Act may be cited as the Income Tax (International Agreements) Act 1969.

(2.) The Income Tax (International Agreements) Act 1953-1968 is in this Act referred to as the Principal Act.

(3.) The Principal Act, as amended by this Act, may be cited as the Income Tax (International Agreements) Act 1953-1969.

Commencement

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Interpretation.

3. Section 3 of the Principal Act is amended—

(a) by inserting in sub-section (1.), after the definition of “Australian tax”, the following definition:—

“‘calendar year’ means a year commencing on the first day of January;”;

(b) by inserting in sub-section (1.), after the definition of “the Canadian agreement”, the following definitions:—

“‘the French agreement’ means the Agreement between the Government of the Commonwealth and the Government of the French Republic for the avoidance of double taxation of income derived from international air transport, being the agreement a copy of which in the English language is set out in the Seventh Schedule to this Act;

‘the Japanese agreement’ means the Agreement between the Government of the Commonwealth and the Government of Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the protocol to that agreement, being the agreement and protocol a copy of each of which in the English language is set out in the Sixth Schedule to this Act;”;

(c) by inserting in sub-section (1.), after the definition of “the previous United Kingdom agreement”, the following definition:—

“‘the Singapore agreement’ means the Agreement between the Government of the Commonwealth and the Government of the Republic of Singapore for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, being the agreement a copy of which is set out in the Fifth Schedule to this Act;”; and

(d) by adding at the end thereof the following sub-section:—

“(7.) For the purposes of this Act, the text in the English language of the Japanese agreement shall, unless the context otherwise requires, be construed as if—

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

(b) words in the plural included the singular.”.

4. After section 6b of the Principal Act the following sections are inserted:—

Agreement with Singapore.

“7. Subject to this Act, the provisions of the Singapore agreement, so far as those provisions affect Australian tax, have the force of law—

(a) in relation to withholding tax—in respect of dividends or interest derived on or after the first day of July, One thousand nine hundred and sixty-nine, and in relation to which the agreement remains effective; and

(b) in relation to tax other than withholding tax—in respect of income of the year of income that commences on the first day of July, One thousand nine hundred and sixty-nine, or of a subsequent year of income in relation to which the agreement remains effective.

Agreement with Japan.

“8.—(1.) Subject to this Act, on and after the date of entry into force of the Japanese agreement, the provisions of the agreement, so far as those provisions affect Australian tax, have the force of law—

(a) in relation to withholding tax—in respect of dividends or interest derived on or after the first day of July in the calendar year in which the agreement enters into force, and in relation to which the agreement remains effective; and

(b) in relation to tax other than withholding tax—in respect of income of the year of income that commences on the first day of July in the calendar year in which the agreement enters into force, or of a subsequent year of income in relation to which the agreement remains effective.

“(2.) For the purposes of paragraph 5 of the protocol that forms part of the Japanese agreement, as having the force of law in accordance

with the last preceding sub-section, section six aa of the Assessment Act shall be taken to be a provision by virtue of which Australian tax law is in force in relation to the areas referred to in that paragraph.

“(3.) After instruments of ratification have been exchanged in accordance with Article 22 of the Japanese agreement and before the date on which the agreement will enter into force in accordance with that Article, the Treasurer shall cause to be published in the Gazette a notice specifying the date on which the agreement will enter into force, and the date so notified shall, for the purposes of this Act, be conclusively presumed to be the date of entry into force of the agreement.

Agreement with France.

“9.—(1.) Subject to this Act, on and after the date of entry into force of the French agreement, the provisions of the agreement, so far as those provisions affect Australian tax, have, and shall be deemed to have had, the force of law in relation to tax in respect of income of the year of income that commenced on the first day of July, One thousand nine hundred and sixty-six, or of a subsequent year of income in relation to which the agreement remains effective.

“(2.) As soon as practicable after the entry into force of the French agreement in accordance with Article 4 of the agreement, the Treasurer shall cause to be published in the Gazette a notice specifying the date on which the agreement entered into force, and the date so notified shall, for the purposes of this Act, be conclusively presumed to be the date of entry into force of the agreement.”.

Provisions relating to certain income derived from sources in the United Kingdom, Singapore and Japan.

5. Section 12 of the Principal Act is amended—

(a) by omitting from paragraph (a) of sub-section (1.) the word “or” (last occurring); and

(b) by inserting after paragraph (a) of sub-section (1.) the following paragraphs:—

“(aa) income being interest or royalties to which paragraph 2 of Article 9 or paragraph 2 of Article 10 of the Singapore agreement applies, where the income is derived, in the year of income beginning on the first day of July, One thousand nine hundred and sixty-nine, or a subsequent year of income, from sources in Singapore;

“(ab) income being interest or royalties to which paragraph (2) of Article 8 or paragraph (2) of Article 9 of the Japanese agreement applies, where the income is derived, in the year of income beginning on the first day of July in the calendar year in which the agreement enters into force, or a subsequent year of income, from sources in Japan; or”.

Fifth, Sixth and Seventh Schedules.

6. The Principal Act is amended by adding at the end thereof the following Schedules:—

FIFTH SCHEDULE Section 3.

AGREEMENT BETWEEN THE GOVERNMENT OF THE COMMONWEALTH OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF SINGAPORE FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Commonwealth of Australia and the Government of the Republic of Singapore,

Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

Article 1

1. The existing taxes to which this Agreement applies are—

(a) in Australia:

the Commonwealth income tax, including the additional tax upon the undistributed amount of the distributable income of a private company;

(b) in Singapore:

the income tax.

2. This Agreement applies also to any identical or substantially similar taxes which are imposed subsequent to the date of signature of this Agreement by Singapore or the Commonwealth in addition to, or in place of, the existing taxes to which this Agreement applies.

Article 2

1. In this Agreement, unless the context otherwise requires—

(a) the term “the Commonwealth” means the Commonwealth of Australia;

(b) the term “Australia” means the whole of the Commonwealth and 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) any territory which, subsequent to the date of signature of this Agreement, becomes a Territory of the Commonwealth; and

(vi) any area outside the territorial limits of the Commonwealth and the said Territories in respect of which there is for the time being in force a law of the Commonwealth or of a State or part of the Commonwealth or of a Territory aforesaid dealing with the exploitation of any of the natural resources of the sea-bed and sub-soil of the continental shelf;

(d) the terms “Contracting State”, “one of the Contracting States”, and “other Contracting State” mean Australia or Singapore, as the context requires;

(e) the terms “Australian tax” and “Singapore tax” mean tax imposed by the Commonwealth and tax imposed by Singapore respectively, being tax to which this Agreement applies by virtue of Article 1;

(f) he term “company” includes any body or association which is treated as a company for tax purposes;

(g) the term “competent authority” means, in the case of Australia, the Commissioner of Taxation or his authorised representative and in the case of Singapore, the Minister for Finance or his authorised representative;

(h) the term “enterprise” includes undertaking;

(i) the term “Malaysian company” means a company which, for purposes of income tax in Malaysia, is resident in Malaysia;

(j) the term “person” includes an individual, a company and any body of persons, corporate or not corporate;

Fifth Schedule—continued

(k) the terms “profits of a Singapore enterprise” and “profits of an Australian enterprise” mean profits of a Singapore enterprise or profits of an Australian enterprise respectively, but do not include—

(i) dividends, interest (as defined in Article 9), or royalties (including those payments which come within the meaning of “royalties” for the purposes of Article 10) other than such dividends, interest or royalties that are effectively connected with a trade or business carried on through a permanent establishment in one of the Contracting States by an enterprise of the other Contracting State;

(ii) rent;

(iii) remuneration or other income for personal (including professional) services;

(iv) profits from the operation of ships or aircraft;

(v) payments to the extent to which they are received as consideration for the use of, or the right to use, motion picture films, literary, dramatic, musical or artistic copyrights, films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting; or

(vi) payments to the extent to which they are received as consideration for the supply of scientific, technical, industrial or commercial knowledge, information or assistance (other than those payments which come within the meaning of “royalties” for the purposes of Article 10);

(l) the term “resident in Singapore” has the meaning which it has under the laws of Singapore relating to Singapore tax; and the term “resident of Australia” has the meaning which it has under the laws of the Commonwealth relating to Australian tax;

(m) the term “tax” means Australian tax or Singapore tax, as the context requires;

(n) words in the singular include the plural and words in the plural include the singular.

2. The terms “Australian tax” and “Singapore tax” do not include any amount which represents a penalty or interest imposed under the law in force in Australia or Singapore relating to the taxes to which this Agreement applies.

3. Where under this Agreement income is relieved from tax in one of the Contracting States and, under the law in force in the other Contracting State, a person, in respect of the said income, is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof, then the relief to be allowed under this Agreement in the first-mentioned Contracting State shall apply only to so much of the income as is remitted to or received in the other Contracting State.

4. Unless the context otherwise requires, any term of this Agreement not otherwise defined shall have, in a Contracting State, the meaning which it has under the laws in that Contracting State relating to the taxes to which this Agreement applies.

Article 3

1. For the purposes of this Agreement—

(a) the term “Australian company” means any company which being a resident of Australia—

(i) is incorporated in Australia and has its centre of administrative or practical management in Australia whether or not any person outside Australia exercises or is capable of exercising any overriding control or direction of the company or of its policy or affairs in any way whatsoever; or

(ii) is managed and controlled in Australia;

(b) the term “Singapore company” means any company which is managed and controlled in Singapore and which is not an Australian company;

(c) the term “Singapore resident” means any Singapore company and any person (other than a company) who is resident in Singapore; and

(d) the term “Australian resident” means any Australian company and any other person (other than a Singapore company) who is a resident of Australia.

2. Where by reason of the provisions of paragraph 1 of this Article an individual is both a Singapore resident and an Australian resident—

(a) he shall be treated solely as a Singapore resident—

(i) if he has a permanent home available to him in Singapore and has not a permanent home available to him in Australia;

Fifth Schedule—continued

(ii) if sub-paragraph (a) (i) of this paragraph is not applicable but he has an habitual abode in Singapore and has not an habitual abode in Australia;

(iii) if neither sub-paragraph (a) (i) nor sub-paragraph (a) (ii) of this paragraph is applicable but the Contracting State with which his personal and economic relations are closest is Singapore;

(b) he shall be treated solely as an Australian resident—

(i) if he has a permanent home available to him in Australia and has not a permanent home available to him in Singapore;

(ii) if sub-paragraph (b) (i) of this paragraph is not applicable but he has an habitual abode in Australia and has not an habitual abode in Singapore;

(iii) if neither sub-paragraph (b) (i) nor sub-paragraph (b) (ii) of this paragraph is applicable but the Contracting State with which his personal and economic relations are closest is Australia.

3. Where by reason of the provisions of paragraph 1 of this Article a person other than an individual is both a Singapore resident and an Australian resident—

(a) it shall be treated solely as a Singapore resident if it is managed and controlled in Singapore;

(b) it shall be treated solely as an Australian resident if it is managed and controlled in Australia.

4. In this Agreement the term “resident of one of the Contracting States” and the term “resident of the other Contracting State” mean a person who is a Singapore resident or a person who is an Australian resident as the context requires.

5. In this Agreement, the term “Singapore enterprise” and the term “Australian enterprise” mean an industrial or commercial enterprise (including a mining, agricultural, pastoral, forestry or plantation enterprise) carried on by a Singapore resident or by an Australian resident respectively, and the term “enterprise of one of the Contracting States” and the term “enterprise of the other Contracting State” mean an Australian enterprise or a Singapore enterprise, as the context requires.

Article 4

1. For the purposes of this Agreement the term “permanent establishment” in relation to an enterprise means a fixed place of trade or business in which the trade or business of the enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes—

(a) a management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;

(g) an agricultural, pastoral, forestry or plantation property;

(h) a building site or a construction, installation or assembly project which exists for more than six months.

3. The term “permanent establishment” shall not be deemed to include—

(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 trade or business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; or

(e) the maintenance of a fixed place of trade or business solely for the purpose of activities which have a preparatory or auxiliary character for the enterprise, such as advertising or scientific research.

Fifth Schedule—continued

4. An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State and to carry on trade or business through that permanent establishment if—

(a) it carries on supervisory activities in that other Contracting State for more than six months in connection with a building site, or a construction, installation or assembly project which is being undertaken, in that other Contracting State; or

(b) substantial equipment is in that other Contracting State being used or installed by, for or under contract with the enterprise.

5. A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State (other than an agent of independent status to whom paragraph 6 of this Article applies) shall be deemed to be a permanent establishment of that enterprise in the first-mentioned Contracting State—

(a) if he has, and habitually exercises in that first-mentioned Contracting State, an authority to conclude contracts on behalf of the enterprise and his activities are not limited solely to the purchase of goods or merchandise for the enterprise;

(b) if there is maintained in that first-mentioned Contracting State a stock of goods or merchandise belonging to the enterprise from which he habitually fills orders on behalf of the enterprise; or

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 trade or business in that other Contracting State through a broker, a general commission agent or any other agent of independent status, where such a person is acting in the ordinary course of his business as a broker, a general commission agent or other agent of independent status.

7. The fact that a company which is a resident of one of the Contracting States controls or is controlled by a company which is a resident of the other Contracting State, or which carries on trade or business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

8. Where an enterprise of one of the Contracting States sells goods manufactured, assembled, processed, packed or distributed in the other Contracting State by an industrial or commercial enterprise for, or at, or to the order of, that first-mentioned enterprise and—

(a) either enterprise participates directly or indirectly in the management, control or capital of the other enterprise; or

(b) the same persons participate directly or indirectly in the management, control or capital of both enterprises,

then, for the purposes of this Agreement that first-mentioned enterprise shall be deemed to have a permanent establishment in the other Contracting State and to carry on trade or business in the other Contracting State through that permanent establishment.

Article 5

1. Profits of an Australian enteprise shall not be subject to Singapore tax unless the enterprise carries on trade or business in Singapore through a permanent establishment in Singapore. If it carries on trade or business as aforesaid, Singapore tax may be imposed on those profits but only on so much of them as is attributable to that permanent establishment.

2. Profits of a Singapore enterprise shall not be subject to Australian tax unless the enterprise carries on trade or business in Australia through a permanent establishment in Australia. If it carries on trade or business as aforesaid, Australian tax may be imposed on those profits but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the Contracting States carries on trade or business in the other Contracting State through a permanent establishment situated therein, there shall be attributed to that permanent establishment the profits which it might be expected to make in that other Contracting State if it were a distinct and separate enterprise engaged in the same or similar activities and dealing wholly independently with the enterprise of which it is a permanent establishment or with an independent enterprise; and the profits so attributed shall be deemed to be income derived from sources in that other Contracting State and shall be taxed accordingly.

Fifth Schedule—continued

4. In determining the profits attributable to a permanent establishment in one of the Contracting States, there shall be allowed as deductions all expenses of the enterprise, including executive and general administrative expenses, which would be deductible if the permanent establishment were an independent enterprise and which are reasonably allocable to the permanent establishment, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere, but where goods manufactured out of that Contracting State by the enterprise are imported into that Contracting State, and the goods are, either before or after importation, sold in that Contracting State by the enterprise, the profits of the enterprise taxable in that Contracting State may be determined by deducting from the sale price of the goods the amount for which, at the date the goods were shipped to that Contracting State, goods of the same nature and quality could be purchased by a wholesale buyer in the country of manufacture, and the expenses incurred in transporting them to and selling them in that Contracting State.

5. If the information available to the competent authority of the Contracting State concerned is inadequate to determine the profits to be attributed to the permanent establishment, nothing in this Article shall affect the application of any law of that Contracting State in relation to the liability of the enterprise to pay tax, in respect of the permanent establishment, on an amount determined by the exercise of a discretion or the making of an estimate by the competent authority of that Contracting State. Provided that the discretion shall be exercised or the estimate shall be made, so far as the information available to the competent authority permits, in accordance with the principles stated in this Article.

6. Profits shall not be attributed to a permanent establishment by reason of the mere purchase or mere purchase and transportation by that permanent establishment of goods or merchandise for the enterprise.

7. Nothing in this Article shall apply to either Contracting State to prevent the operation in the Contracting State of any provisions of its law relating specifically to the taxation of any person who carries on a business of any form of insurance or to the taxation of a non-resident who derives income under any contract or agreement with any person in relation to the carrying on in the Contracting State by that person of any form of film business controlled abroad. Provided that if the law in force in either Contracting State at the date of signature of this Agreement relating to the taxation of such persons is varied (otherwise than in minor respects so as not to affect its general character), the Contracting Governments shall consult with each other with a view to agreeing to such amendment of this paragraph as may be necessary.

Article 6

1. Where—

(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 are operative between the two enterprises in their commercial or financial relations which differ from those which might be expected to operate between distinct and separate enterprises dealing wholly independently with one another, then, if by reason of those circumstances profits which might be expected to accrue to one of the enterprises do not accrue to that enterprise, there may be included in the profits of that enterprise the profits which might have been expected so to accrue to it if it were a distinct and separate enterprise engaged in the same or similar activities and its dealings with the other enterprise were dealings wholly independently with that enterprise or an independent enterprise.

2. Profits included in the profits of an enterprise of one of the Contracting States under paragraph 1 of this Article shall be deemed to be income of that enterprise derived from sources in that Contracting State and shall be taxed accordingly.

3. If the information available to the competent authority of a Contracting State is inadequate to determine, for the purposes of paragraph 1 of this Article, the profits which might have been expected to accrue to an enterprise, nothing in this Article shall affect the application of any law of that Contracting State in relation to the liability of that enterprise to pay tax on an amount determined by the exercise of a discretion or the making of an estimate by the competent authority of that Contracting State. Provided that the discretion shall be exercised or the estimate shall be made, so far as the information available to the competent authority permits, in accordance with the principles stated in this Article.

Fifth Schedule—continued

Article 7

1. The tax payable in a Contracting State by a resident of the other Contracting State in respect of profits from the operation of ships, other than profits from voyages or operations of ships confined solely to places in the first-mentioned Contracting State, shall not exceed half the amount which would be payable in respect of those profits but for this paragraph.

2. A resident of one of the Contracting States shall be exempt from tax in the other Contracting State on profits from the operation of aircraft, other than profits from flights of aircraft confined solely to places in the other Contracting State.

3. The relief provided in paragraphs 1 and 2 of this Article shall apply in relation to the share of the profits from the operation of ships or aircraft derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organisation or in an international operating agency but only to the extent to which the share of the profits is not attributable to profits from voyages, flights or operations confined solely to places in the other Contracting State.

4. For the purpose of this Article profits derived from the carriage of passengers, livestock, mails or goods shipped in one of the Contracting States for discharge at another place in that Contracting State or, in the case of Australia, at a place in the Territory of Papua or the Trust Territory of New Guinea are profits from a voyage or flight of a ship or aircraft confined solely to places in that Contracting State.

Article 8

1. The Australian tax on dividends, being dividends paid by a company which is a resident of Australia, derived by a Singapore resident who is beneficially entitled to the dividends, shall not exceed 15 per centum of the gross amount of the dividends.

2. Subject to the provisions of this Article dividends paid by a company which is resident in Singapore, and dividends paid by a Malaysian company out of profits derived from sources in Singapore, being dividends derived by an Australian resident who is beneficially entitled to the dividends, shall be exempt from any tax in Singapore which may be chargeable on dividends in addition to the tax chargeable in respect of the profits of the company.

3. Nothing in the preceding paragraph shall affect the provisions of Singapore law under which the tax in respect of a dividend paid by a company which is resident in Singapore, or by a Malaysian company out of profits derived from sources in Singapore, from which Singapore tax has been, or has been deemed to be, deducted may be adjusted by reference to the rate of tax appropriate to the Singapore year of assessment immediately following that in which the dividend was paid.

4. If Singapore, subsequent to the signing of this Agreement, imposes a tax on dividends paid by a company which is resident in Singapore or by a Malaysian company out of profits derived from sources in Singapore, which is in addition to the tax chargeable in respect of the profits of the company, such tax may be charged but the tax so charged on such dividends derived by an Australian resident who is beneficially entitled to the dividends shall not exceed 15 per centum of the gross amount of the dividends.

5. Paragraphs 1, 2 and 4 of this Article shall not apply if the resident of one of the Contracting States who is beneficially entitled to the dividends has in the other Contracting State a permanent establishment and the holding giving rise to the dividends is effectively connected with a trade or business carried on through that permanent establishment.

6. Dividends paid by a company which is a resident of one of the Contracting States, being dividends derived by a person who is beneficially entitled to the dividends and who is not a resident of the other Contracting State, shall be exempt from tax in that other Contracting State. This paragraph shall not apply in relation to a Singapore company which is also a resident of Australia or any Australian company which is also resident in Singapore.

Article 9

1. The Australian tax on interest derived by a Singapore resident who is beneficially entitled to the interest shall not exceed 10 per centum of the gross amount of the interest.

2. The Singapore tax on interest derived by an Australian resident who is beneficially entitled to the interest shall not exceed 10 per centum of the gross amount of the interest.

3. Paragraphs 1 and 2 of this Article shall not apply if the resident of one of the Contracting States who is beneficially entitled to the interest has in the other Contracting State a

Fifth Schedule

permanent establishment and the indebtedness giving rise to the interest is effectively connected with a trade or business carried on through that permanent establishment.

4. Where, owing to a special relationship between the payer and the person beneficially entitled to the interest or between both of them and some other person, the amount of the interest paid exceeds the amount which might have been expected to have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.

5. In this Article the term “interest” means interest, and amounts in the nature of interest, on bonds, securities, debentures or on any other form of indebtedness.

Article 10

1. The Australian tax on royalties derived by a Singapore resident who is beneficially entitled to the royalties shall not exceed 10 per centum of the gross amount of the royalties.

2. The Singapore tax on royalties derived by an Australian resident who is beneficially entitled to the royalties shall not exceed 10 per centum of the gross amount of the royalties.

3. In this Article “royalties” means payments of any kind to the extent to which they are received as consideration for—

(a) the use of, or the right to use, any—

(i) copyright (other than a iterary, dramatic, musical or artistic copyright), patent, design or model, plan, secret formula or process, trademark, or other like property or right; or

(ii) industrial, commercial or scientific equipment; or

(b) the supply of information concerning industrial, commercial or scientific experience,

but does not include royalties or other payments in respect of the operation of mines or quarries or of the exploitation of natural resources or payments to the extent to which they are received as consideration for the use of, or the right to use, motion picture films, tapes for use in connection with radio broadcasting or films or video tapes for use in connection with television.

4. Paragraphs 1 and 2 of this Article shall not apply if the resident of one of the Contracting States who is beneficially entitled to the royalties has in the other Contracting State a permanent establishment and the information, right or property giving rise to the royalties is effectively connected with a trade or business carried on through that permanent establishment.

5. Where, owing to a special relationship between the payer and the person who is beneficially entitled to the royalties or between both of them and some other person, the amount of the royalties paid exceeds the amount which might have been expected to have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.

Article 11

1. Subject to this Article and to Articles 12, 13 and 14 remuneration or other income derived by an individual who is a resident of one of the Contracting States in respect of personal (including professional) services shall be subject to tax only in that Contracting State unless the services are performed or exercised in the other Contracting State. If the services are so performed or exercised such remuneration or other income as is derived therefrom shall be deemed to have a source in, and may be taxed in, that other Contracting State.

2. In relation to remuneration of a director of a company derived from the company, the provisions of this Article and of Article 12 shall apply as if the remuneration were remuneration in respect of personal services. Director’s fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State shall be deemed to be derived in respect of personal services performed in, and may be taxed in, that other Contracting State.

3. An individual who is a resident of one of the Contracting States shall be exempt from tax in the other Contracting State on remuneration from an employment exercised on ships or aircraft in international traffic.

Article 12

1. Remuneration or other income derived by an individual who is a resident of one of the Contracting States in respect of personal (including professional) services performed or

Fifth Schedule—continued

exercised in the other Contracting State shall be exempt from tax in the other Contracting State if—

(a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the year of income or in the basis period for the year of assessment as the case may be of that other Contracting State;

(b) the services are performed or exercised for or on behalf of a person who is a resident of the first-mentioned Contracting State; and

(c) the remuneration or other income is not deductible in determining the profits for tax purposes in the other Contracting State of a permanent establishment in that other Contracting State of that person.

2. Paragraph 1 of this Article shall not apply to remuneration or other income derived by public entertainers (such as stage, motion picture, radio or television artistes, musicians and athletes) from their personal activities as such.

3. Notwithstanding anything contained in this Agreement, where an enterprise of one of the Contracting States derives profits arising from, or in relation to, contracts or obligations to provide in the other Contracting State services of public entertainers referred to in paragraph 2 of this Article, the profits may be taxed in the other Contracting State and shall be deemed to have a source in that other Contracting State, except where the enterprise is, in connection with the provision of those services, substantially supported from the public funds of a Government of the first-mentioned Contracting State, in which case the profits shall be exempt from tax in the other Contracting State.

4. For the purposes of paragraph 3 of this Article, “a Government of the first-mentioned Contracting State” means, in the case of Singapore, the Government of Singapore and, in the case of Australia, the Government of the Commonwealth or of any State of the Commonwealth.

Article 13

1. A pension or an annuity, derived from sources within one of the Contracting States by an individual who is a resident of the other Contracting State, shall be exempt from tax in the first-mentioned Contracting State.

2. The term “annuity” means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.

3. This Article shall not apply to a pension paid to an individual by the Government of the Commonwealth or of any State of the Commonwealth or the Government of Singapore in respect of services rendered in the discharge of governmental functions.

Article 14

1. Remuneration (other than pensions) paid by the Government of the Commonwealth or of any State of the Commonwealth to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Singapore tax, except where the individual is resident in Singapore and is not an Australian citizen.

2. Remuneration (other than pensions) paid by the Government of Singapore to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Australian tax, except where the individual is a resident of Australia and is not a Singapore citizen.

3. This Article shall not apply to any remuneration in respect of services rendered in connection with any trade or business carried on by a Government for purposes of profit.

Article 15

A student or trainee who is, or was immediately before visiting one of the Contracting States, a resident of the other Contracting State and is present in the first-mentioned Contracting State solely for the purpose of his education or training shall not be taxed in that first-mentioned Contracting State on payments which he receives for the purpose of his maintenance, education or training provided that such payments are made to him from outside that first-mentioned Contracting State.

Article 16

1. This Article shall apply to a person who is a resident of Australia and is also resident in Singapore.

Fifth Schedule—continued

2. Where such a person is treated for the purposes of this Agreement solely as a resident of one of the Contracting States he shall be exempt in the other Contracting State from tax on any income in respect of which he is subject to tax in the first-mentioned Contracting State if the income is derived—

(a) from sources in the first-mentioned Contracting State; or

(b) from sources outside both Contracting States.

Article 17

1. For the purposes of this Agreement—

(a) (i) dividends paid by a company which is a resident of Australia shall be treated in Singapore as income from sources in Australia;

(ii) dividends paid by a company which is resident in Singapore shall be treated in Australia as income from sources in Singapore;

(b) dividends paid by a Malaysian company out of profits derived from sources in Singapore shall be treated in Australia as income from sources in Singapore;

(c) profits derived by a resident of one of the Contracting States from the carriage by ships or aircraft of passengers, livestock, mails or goods shipped in the other Contracting State, or from the operations of ships or aircraft in that other Contracting State, shall be treated as having a source in that other Contracting State;

(d) an amount which is included, for the purposes of tax in one of the Contracting States, in the taxable or chargeable income of a person who is a resident of the other Contracting State, and which is so included under any provision of the law of the first-mentioned Contracting State for the time being in force regarding taxation of income of a business of any form of insurance or of income derived under a contract or agreement with a person who carries on in the first-mentioned Contracting State any form of film business controlled abroad shall be treated as having a source in that first-mentioned Contracting State;

(e) pensions paid by the Government of the Commonwealth or of any State of the Commonwealth, or the Government of Singapore, in respect of services rendered in the discharge of governmental functions shall be treated as having a source in Australia or Singapore respectively.

2. Interest (as defined in Article 9) derived by a resident of one of the Contracting States shall be treated as having a source in the other Contracting State where the amount—

(i) is paid by a Government of the other Contracting State or by a resident of the other Contracting State and is not incurred by the payer in carrying on a trade or business through a permanent establishment of the payer in a country outside the other Contracting State; or

(ii) is paid by a person who is not a resident of the other Contracting State and is incurred by the payer in carrying on trade or business through a permanent establishment of the payer in the other Contracting State.

3. For the purposes of paragraph 2 of this Article “a Government of the other Contracting State” means, in relation to Singapore, the Government of Singapore or an authority of Singapore and, in relation to Australia, means the Government of the Commonwealth or of a State of the Commonwealth or an authority of the Commonwealth or of such a State.

4. Royalties (as defined in Article 10) and payments referred to in sub-paragraph (k) (v) and sub-paragraph (k) (vi) of paragraph 1 of Article 2 shall be treated as derived from sources within the Contracting State in which the knowledge, assistance, information, right or property giving rise to the royalties or payments is used.

5. Royalties in respect of the operation of mines, quarries or other places of extraction of natural resources shall be treated as derived from sources within the Contracting State in which such mines, quarries or other places of natural resources are situated.

Article 18

1. Subject to any provisions of the law of the Commonwealth which may from time to time be in force and which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Singapore tax paid, whether directly or by deduction, in respect of income derived by a resident of Australia from sources within Singapore (excluding in the case of a dividend, tax paid in respect of the profits out of which the dividend is paid) shall be allowed as a credit against Australian tax payable in respect of that income.

Fifth Schedule—continued

2. A company that is a resident of Australia and which beneficially owns at least 10 per centum of the paid-up share capital in a company that is resident in Singapore shall, in accordance with those provisions in the taxation law of the Commonwealth in existence at the date of signature of this Agreement, be entitled to a rebate in its assessment at the average rate of tax payable by the company in respect of dividends paid by the second-mentioned company that are included in its taxable income.

3. For the purposes of paragraph 1 of this Article and of the income tax law of the Commonwealth—

(a) a resident of Australia deriving income from sources in Singapore consisting of interest or royalties to which Article 9 or Article 10 applies, being income in respect of which an exemption from or reduction of tax has been granted under Parts V and VI of the Economic Expansion Incentives (Relief from Income Tax) Act, 1967, of Singapore or any other provisions which may subsequently be enacted granting an exemption from or reduction of tax which are agreed by the Contracting Governments in Notes exchanged for these purposes to be of a substantially similar character, shall be deemed to have paid Singapore tax in an amount, or the Singapore tax paid shall be deemed to have been increased by an amount, equal to the amount by which the Singapore tax that otherwise would have been payable is reduced by the exemption or reduction granted; and

(b) the amount of the said interest or royalties shall be deemed to be the amount that would have been the amount of the interest or royalties if no Singapore tax had been paid, increased by the amount by which the tax that otherwise would have been payable is reduced by the said exemption or reduction.

4. Paragraph 3 of this Article shall not apply in relation to income derived in any year of income after the year of income that ends on 30th June, 1974 or on any later date that may be agreed by the Contracting Governments in Notes exchanged for this purpose.

5. Subject to the provisions of the laws of Singapore regarding the allowance as a credit against Singapore tax of tax payable in any country other than Singapore, Australian tax payable, whether directly or by deduction, in respect of income from sources within Australia shall be allowed as a credit against Singapore tax payable in respect of that income. Where such income is a dividend paid by a company which is an Australian resident to a company which is a Singapore resident and which owns directly or indirectly not less than 10 per centum of the paid-up share capital in the first-mentioned company the credit shall take into account (in addition to any Australian tax on dividends) the Australian tax paid by the first-mentioned company in respect of its profits.

6. Where profits, on which an enterprise of one of the Contracting States has been charged to tax in that Contracting State, are also included, by virtue of this Agreement, in the profits of an enterprise of the other Contracting State as being profits which, because of the circumstances existing between the two enterprises, might have been expected to accrue to the enterprise of the other Contracting State, the profits so included shall be treated for the purposes of this Article as profits of the enterprise of the first-mentioned Contracting State from a source in the other Contracting State and relief shall be given in accordance with this Article in respect of the extra tax chargeable in the other Contracting State as a result of the inclusion of such profits.

Article 19

1. The competent authorities shall exchange such information (being information which is at their disposal under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of this Agreement or for the prevention of fraud or for the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Agreement.

2. Any information so exchanged shall be treated as secret but may be disclosed to persons (including a court or tribunal) concerned with the assessment, collection, enforcement or prosecution in respect of the taxes which are the subject of this Agreement.

3. No information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process.

Fifth Schedule—continued

Article 20

1. Where a taxpayer considers that the action of the competent authority in one of the Contracting States has resulted, or is likely to result, in double taxation contrary to the provisions of this Agreement, he shall be entitled to present the facts to the competent authority in the Contracting State of which he is a resident and, should the taxpayer’s claim be deemed worthy of consideration, the competent authority in that Contracting State shall endeavour to come to an agreement with the competent authority in the other Contracting State with a view to the avoidance of the double taxation in question.

2. The competent authority in a Contracting State may communicate directly with the competent authority in the other Contracting State for the purpose of giving effect to the provisions of this Agreement and in an endeavour to assure its consistent interpretation and application. In particular, the competent authorities may consult together to endeavour to resolve disputes arising out of the application of paragraph 3 of Article 5 or Article 6.

Article 21

This Agreement shall come into force on the date on which the last of all such things shall have been done in Australia and Singapore as are necessary to give the Agreement the force of law in Australia and Singapore so far as its provisions affect Australian tax and Singapore tax respectively and shall thereupon have effect—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in respect of income derived on or after 1st July, 1969;

(ii) in respect of other Australian tax, for any year of income beginning on or after 1st July, 1969;

(b) in Singapore—

for any year of assessment beginning on or after 1st January, 1970.

Article 22

This Agreement shall continue in effect indefinitely, but either Contracting State may, on or before 30th June in any calendar year give to the other Contracting State notice of termination and, in that event, this Agreement shall cease to be effective—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in respect of income derived on or after the commencement of the financial year beginning on 1st July in the calendar year next following that in which the notice is given;

(ii) in respect of other Australian tax, for any year of income beginning on or after 1st July in the calendar year next following that in which the notice is given;

(b) in Singapore—

for any year of assessment beginning on or after 1st January in the second calendar year next following that in which the notice is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Agreement.

DONE in duplicate at Canberra this Eleventh day of February of the year one thousand nine hundred and sixty-nine in the English language.

William McMahon	S. T. Stewart
For the Government	For the Government
of the	of the
Commonwealth of Australia	Republic of Singapore

SIXTH SCHEDULE Section 3.

AGREEMENT BETWEEN THE COMMONWEALTH OF AUSTRALIA AND JAPAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Commonwealth of Australia and the Government of Japan,

Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

Article 1

(1) The taxes to which this Agreement applies are—

(a) in Australia:

the Commonwealth income tax, including the additional tax upon the undistributed amount of the distributable income of a private company;

(b) in Japan:

the income tax and the corporation tax.

(2) This Agreement applies also to any identical or substantially similar taxes which may be subsequently imposed by the Commonwealth or Japan in addition to, or in place of, the taxes referred to in the preceding paragraph.

(3) In this Agreement, ‘Australian tax’ means tax of the Commonwealth to which this Agreement applies; ‘Japanese tax’ means tax of Japan to which this Agreement applies.

(4) With respect to paragraph (2) of Article 6 only, this Agreement shall also apply to the taxes referred to in that paragraph.

Article 2

(1) In this Agreement, unless the context otherwise requires—

(a) ‘the Commonwealth’ means the Commonwealth of Australia;

(b) ‘Australia’ means the Commonwealth 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; and

(v) any territory which, subsequent to the date of signature of this Agreement, becomes a Territory of the Commonwealth;

(c) ‘Japan’, when used in a geographical sense, means all the territory in which the laws relating to Japanese tax are enforced;

(d) ‘Contracting State’, ‘one of the Contracting States’ and ‘other Contracting State’ mean Australia or Japan, as the context requires;

(e) ‘resident in Japan’ means a person who is resident in Japan under the law of Japan relating to Japanese tax; ‘resident of Australia’ means a person who is a resident of Australia under the law in force in Australia relating to Australian tax;

(f) ‘Australian resident’ means a person who is a resident of Australia and is not resident in Japan; ‘Japanese resident’ means a person who is resident in Japan and is not a resident of Australia;

(g) ‘resident of one of the Contracting States’, ‘resident of the other Contracting State’ and ‘resident of that other Contracting State’ mean an Australian resident or a Japanese resident, as the context requires;

(h) ‘person’ includes a company and any other body of persons;

Sixth Schedule—continued

(i) ‘enterprise of one of the Contracting States’ and ‘enterprise of the other Contracting State’ mean an industrial or commercial enterprise carried on by an Australian resident or a Japanese resident, as the context requires;

(j) ‘company’ includes any body or association corporate or un-incorporate which is treated as a company or body corporate for tax purposes;

(k) ‘competent authority’ means, in the case of Australia, the Commissioner of Taxation or his authorised representative, and in the case of Japan, the Minister of Finance or his authorised representative;

(l) ‘tax’ means Australian tax or Japanese tax, as the context requires.

(2) ‘Australian tax’ and ‘Japanese tax’ do not include any amount which represents a penalty or interest imposed under the law in force in Australia or Japan relating to the taxes to which this Agreement applies.

(3) Where under this Agreement income is relieved from tax in one of the Contracting States and, under the law in force in the other Contracting State, an individual, in respect of the said income, is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof, then the relief to be allowed under this Agreement in the first-mentioned Contracting State shall apply only to so much of the income as is remitted to or received in that other Contracting State.

(4) Unless the context otherwise requires, any term of this Agreement not otherwise defined shall have, in a Contracting State, the meaning which it has under the laws in force in that Contracting State relating to the taxes to which this Agreement applies.

Article 3

(1) For the purposes of this agreement, ‘permanent establishment’ means a fixed place of trade or business in which the trade or business of the enterprise is wholly or partly carried on.

(2) ‘Permanent establishment’ includes—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, quarry or other place of extraction of natural resources;

(g) land used for agricultural, pastoral or forestry purposes; and

(h) a building site or a construction, installation or assembly project which exists for more than six months.

(3) ‘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 trade or business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; or

Sixth Schedule—continued

(4) An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if it carries on supervisory activities in that other Contracting State for more than six months in connection with a building site, or a construction, installation or assembly project which is being undertaken, in that other Contracting State.

(5) A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State (other than an agent of independent status to whom paragraph (6) of this Article applies) shall be deemed to be a permanent establishment of that enterprise in the first-mentioned Contracting State—

(a) if he has, and habitually exercises in that first-mentioned Contracting State, an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

(b) if in so acting he manufactures or processes in that first-mentioned Contracting State any goods for the enterprise.

(6) An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on trade or business in that other Contracting State through a broker, a general commission agent or any other agent of independent status, where such a person is acting in the ordinary course of his business as a broker, a general commission agent or any other agent of independent status.

(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 trade of business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

(8) Where an enterprise of one of the Contracting States sells to a resident of the other Contracting State goods manufactured, assembled, processed, packed or distributed in that other Contracting State by an industrial or commercial enterprise for, or at, or to the order of, that first-mentioned enterprise and—

(a) either enterprise participates directly or indirectly in the management, control or capital of the other enterprise; or

(b) the same persons participate directly or indirectly in the management, control or capital of both enterprises,

then, for the purposes of this Agreement, that first-mentioned enterprise shall be deemed to have a permanent establishment in that other Contracting State and to carry on trade or business in that other Contracting State through that permanent establishment.

Article 4

(1) An enterprise of one of the Contracting States shall not be subject to tax in the other Contracting State in respect of its industrial or commercial profits unless it carries on trade or business in that other Contracting State through a permanent extablishment therein. If it carries on trade or business as aforesaid, the enterprise may be subject to tax in that other Contracting State on those profits but only on so much of them as is attributable to that permanent establishment.

(2) Where an enterprise of one of the Contracting States carries on trade or business in the other Contracting State through a permanent establishment in that other Contracting State, there shall be attributed to that permanent establishment the industrial or commercial profits which that permanent establishment might be expected to derive in that other Contracting State if it were an independent enterprise engaged in the same or similar activities and its dealings with the enterprise of which it is a permanent establishment were dealings at arm’s length with that enterprise or an independent enterprise; and the profits so attributed shall be deemed to be income derived from sources in that other Contracting State and shall be taxed accordingly.

(3) In determining the industrial or commercial profits attributable to a permanent establishment in one of the Contracting States, there shall be allowed as deductions all expenses of the enterprise, including ordinary executive and general administrative expenses, which would be

Sixth Schedule—continued

deductible if the permanent establishment were an independent enterprise and which are reasonably allocable to the permanent establishment, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.

(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) In this Article ‘industrial or commercial profits’ means profits derived by an enterprise from the conduct of a trade or business, but does not include—

(a) dividends, interest, rents or royalties (including those payments which come within the meaning of ‘royalties’ for the purposes of Article 9) other than those that are effectively connected with a trade or business carried on through a permanent establishment in one of the Contracting States by an enterprise of the other Contracting State;

(b) income from operating ships or aircraft; or

Article 5

(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 are operative between the two enterprises in their commercial or financial relations which differ from those which might be expected to operate between independent enterprises dealing at arm’s length with one another, then, if by reason of those circumstances profits which might be expected to accrue to one of the enterprises do not accrue to that enterprise, there may be included in the profits of that enterprise the profits which might have been expected so to accrue to it if it were an independent enterprise engaged in the same or similar activities and its dealings with the other enterprise were dealings at arm’s length with that enterprise or an independent enterprise.

(2) Profits included in the profits of an enterprise of one of the Contracting States under paragraph (1) of this Article shall be deemed to be income of that enterprise derived from sources in that Contracting State and shall be taxed accordingly.

Article 6

(1) A resident of one of the Contracting States shall be exempt from tax in the other Contracting State on profits from the operation of ships or aircraft other than operations confined solely to places in that other Contracting State.

(2) An Australian resident shall, in respect of the operation of ships or aircraft mentioned in paragraph (1) of this Article, be exempt from the enterprise tax in Japan to the extent that the basis of the tax is profits, and a Japanese resident shall, in respect of such operation, be exempt from any tax corresponding in nature to the enterprise tax which may hereafter be imposed by the Commonwealth, to the extent that the basis of the tax is profits.

(3) The exemptions provided in paragraphs (1) and (2) of this Article shall apply to a share of the profits from the operation of ships or aircraft derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organisation or in an international operating agency, but only to the extent to which the share of the profits is not attributable to profits from operations confined solely to places in the other Contracting State.

(4) For the purposes of this Article and Article 17, the carriage by ships or aircraft of passengers, livestock, mails or goods shipped in one of the Contracting States for discharge at another place in that Contracting State shall be deemed to be an operation of a ship or aircraft confined solely to places in that Contracting State.

Sixth Schedule—continued

Article 7

(1) The Australian tax on dividends, being dividends paid by a company which is a resident of Australia, derived and beneficially owned by a Japanese resident, shall not exceed 15 per centum of the gross amount of the dividends.

(2) The Japanese tax on dividends, being dividends paid by a company which is resident in Japan, derived and beneficially owned by an Australian resident, shall not exceed 15 per centum of the gross amount of the dividends.

(3) Paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the dividends, being a resident of one of the Contracting States, has in the other Contracting State a permanent establishment and the holding giving rise to the dividends is effectively connected with a trade or business carried on through that permanent establishment.

(4) Dividends paid by a company which is a Japanese resident, derived and beneficially owned by a person who is not a resident of Australia, shall be exempt from Australian tax.

(5) Dividends paid by a company which is an Australian resident, derived and beneficially-owned by a person who is not resident in Japan, shall be exempt from Japanese tax.

Article 8

(1) The Australian tax on interest, derived and beneficially owned by a Japanese resident, shall not exceed 10 per centum of the gross amount of the interest.

(2) The Japanese tax on interest, derived and beneficially owned by an Australian resident, shall not exceed 10 per centum of the gross amount of the interest.

(3) Paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the interest, being a resident of one of the Contracting States, has in the other Contracting State a permanent establishment and the indebtedness giving rise to the interest is effectively connected with a trade or business carried on through that permanent establishment.

(4) Where, owing to a special relationship between the payer and the beneficial owner of the interest, or between both of them and some other person, the amount of the interest paid exceeds the amount which might have been expected to have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.

Article 9

(1) The Australian tax on royalties, derived and beneficially owned by a Japanese resident, shall not exceed 10 per centum of the gross amount of the royalties.

(2) The Japanese tax on royalties, derived and beneficially owned by an Australian resident, shall not exceed 10 per centum of the gross amount of the royalties.

(3) In this Article ‘royalties’ means payments of any kind to the extent to which they are received as consideration for—

(a) the use of or the right to use any—

(i) copyright, patent, design or model, plan, secret formula or process, trade-mark, or other like property or right;

(ii) industrial, commercial or scientific equipment;

(iii) motion picture films; or

(iv) films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting; or

(b) the supply of scientific, technical, industrial or commercial knowledge, information or assistance,

but does not include royalties or other payments in respect of the operation of mines or quarries or of the exploitation of any natural resource.

Sixth Schedule—continued

(4) Paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the royalties, being a resident of one of the Contracting States, has in the other Contracting State a permanent establishment and the knowledge, information, assistance, right or property giving rise to the royalties is effectively connected with a trade or business carried on through that permanent establishment.

(5) Where, owing to a special relationship between the payer and the beneficial owner of the royalties, or between both of them and some other person, the amount of the royalties paid exceeds the amount which might have been expected to have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.

Article 10

Remuneration 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 subjected to tax only in that Contracting 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, such part of that income as is attributable to that base shall be deemed to have a source in, and may be taxed in, that other Contracting State.

Article 11

(1) Subject to Articles 13, 14 and 15, salaries, wages and other similar remuneration (other than pensions) derived by a resident of one of the Contracting States in respect of an employment shall be subject to tax only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom shall be deemed to have a source in, and may be taxed in, that other Contracting State.

(2) Notwithstanding paragraph (1) of this Article, remuneration derived by a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be exempt from tax in that other Contracting State if—

(a) the recipient is present in that other Contracting State for a period or periods not exceeding in the aggregate 183 days in the year of income or the taxable year as the case may be of that other Contracting State;

(b) the remuneration is paid by or on behalf of an employer who is not a resident of that other Contracting 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 Contracting State.

(3) Notwithstanding paragraphs (1) and (2) 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.

(4) The preceding provisions of this Article apply in relation to remuneration of a director of a company derived from the company as if the remuneration were remuneration of an employee in respect of an employment and as if references to employers were references to the company.

Article 12

(1) Notwithstanding anything contained in Articles 10 and 11, income derived by public entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such shall be deemed to have a source in, and may be taxed in, the Contracting State in which these activities are exercised.

(2) An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if in the course of carrying on business it provides the services of public entertainers or athletes referred to in paragraph (1) of this Article in that other Contracting State and the public entertainer or athlete controls, directly or indirectly, such enterprise.

Sixth Schedule—continued

Article 13

(1) A pension or an annuity, derived from sources within one of the Contracting States by an individual who is a resident of the other Contracting State, shall be exempt from tax in the first-mentioned Contracting State.

(2) ‘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 consideration of money paid or money’s worth.

(3) This Article shall not apply to a pension paid to an individual in respect of services rendered to the Government of the Commonwealth or the Government of Japan in the discharge of governmental functions.

Article 14

(1) Remuneration (other than pensions) paid by the Government of the Commonwealth or of any State of the Commonwealth or by a local governing body in Australia to any individual for services rendered to that Government or body in the discharge of governmental functions shall be exempt from Japanese tax unless the individual is a national of Japan or is admitted to Japan for permanent residence therein.

(2) Remuneration (other than pensions) paid by the Government of Japan or by a local governing body in Japan to any individual for services rendered to that Government or body in the discharge of governmental functions shall be exempt from Australian tax unless the individual is an Australian citizen or ordinarily resident in Australia.

(3) This Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by a Government or local governing body referred to in paragraphs (1) or (2) of this Article.

Article 15

Where a professor or teacher, who is a resident of one of the Contracting States, is temporarily present in the other Contracting State for the purpose of teaching or conducting research during a period not exceeding two years at a university, college, school or other educational institution in that other Contracting State, remuneration derived by him for so teaching or conducting research for that period shall be exempt from tax in that other Contracting State.

Article 16

A student who is, or was immediately before visiting one of the Contracting States, a resident of the other Contracting State and is present in the first-mentioned Contracting State solely for the purpose of his education shall not be taxed in that first-mentioned Contracting State on payments which he receives for the purpose of his maintenance or education, provided that such payments are made to him from outside that first-mentioned Contracting State.

Article 17

(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, Japanese tax paid, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Japan (excluding in the case of a dividend, tax paid in respect of the profits out of which the dividend is paid) shall be allowed as a credit against Australian tax payable in respect of that income.

(2) Subject to the provisions of the law of Japan from time to time in force which relate to the allowance of a credit against Japanese tax of tax paid in a country outside Japan, Australian tax paid, whether directly or by deduction, in respect of income derived by a person who is resident in Japan from sources in Australia shall be allowed as a credit against Japanese tax payable in respect of that income. Where such income is a dividend paid by a company which

Sixth Schedule—continued

is an Australian resident to a company which is a Japanese resident and which owns not less than 10 per centum of the voting shares of the first-mentioned company or of the total shares issued by that company, the credit shall take into account the Australian tax paid by the first-mentioned company in respect of its profits.

(3) For the purposes of this Article—

(a) dividends paid by a company which is a resident of one of the Contracting States shall be treated as having a source in that Contracting State;

(b) an amount of interest or royalties (including those payments which come within the meaning of ‘royalties’ for the purposes of Article 9) derived by a resident of one of the Contracting States shall be treated as having a source in the other Contracting State where the amount—

(i) is paid by a Government in that other Contracting State or by a resident of that other Contracting State and is not incurred by the payer in carrying on a trade or business through a permanent establishment of the payer in a country outside that other Contracting State; or

(ii) is paid by a person who is not a resident of that other Contracting State and is incurred by the payer in carrying on trade or business through a permanent establishment of the payer in that other Contracting State;

(c) 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 shall be treated as having a source in that Contracting State;

(d) profits derived by a resident of one of the Contracting States from the operation of ships or aircraft, being profits from operations confined solely to places in the other Contracting State, shall be treated as having a source in that other Contracting State.

(4) Where profits, on which an enterprise of one of the Contracting States has been charged to tax in that Contracting State, are also included, by virtue of this Agreement, in the profits of an enterprise of the other Contracting State as being profits which, because of the circumstances existing between the two enterprises, might have been expected to accrue to the enterprise of that other Contracting State, the profits so included shall be treated for the purposes of this Article as profits of the enterprise of the first-mentioned Contracting State from a source in that other Contracting State and relief shall be given in accordance with this Article in respect of the extra tax chargeable in that other Contracting State as a result of the inclusion of such profits.

(5) For the purposes of sub-paragraph (b) of paragraph (3) of this Article ‘a Government in that other Contracting State’ means in relation to Japan the Government of Japan or a local governing body in Japan and in relation to Australia means the Government of the Commonwealth or of a State of the Commonwealth or a local governing body in Australia.

Article 18

(1) The competent authorities of the Contracting States shall exchange such information (being information available under the respective taxation laws of the Contracting States) as is necessary for carrying out the provisions of this Agreement or for the prevention of fraud or for the administration of statutory provisions against avoidance of the taxes to which this Agreement applies.

(2) Any information so exchanged shall be treated as secret and shall not be disclosed to any persons or authorities other than those concerned with the assessment or collection of the taxes to which this Agreement applies, or the judicial determination of appeals in relation thereto.

(3) No information shall be exchanged which would disclose any trade secret or trade process.

(4) A competent authority shall not be obliged by this Article to disclose to the other competent authority any information which does not relate directly to the affairs of a taxpayer with whom that other competent authority is concerned.

Sixth Schedule—continued

Article 19

Where a taxpayer considers that the action of the competent authority of one of the Contracting States has resulted, or is likely to result, in double taxation contrary to the provisions of this Agreement, he shall be entitled to present the facts to the competent authority of the Contracting State of which he is a resident and, should the taxpayer’s claim be deemed worthy of consideration, the competent authority of that Contracting State shall endeavour to come to an agreement with the competent authority of the other Contracting State with a view to the avoidance of the double taxation in question.

Article 20

The competent authority of one of the Contracting States may communicate directly with the competent authority of the other Contracting State for the purpose of giving effect to the provisions of this Agreement and in an endeavour to assure its consistent interpretation and application.

Article 21

(1) This Agreement may be extended, either in its entirety or with any necessary modifications, to any territory for whose international relations Australia is responsible, which imposes taxes substantially similar in character to those to which this Agreement applies. Any such extension shall take effect from such date and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels or in any other manner in accordance with their constitutional procedures.

(2) Unless otherwise agreed by both Contracting States, the termination of this Agreement under Article 23 shall terminate, in the manner provided for in that Article, the application of this Agreement to any territory to which it has been extended under this Article.

Article 22

(1) This Agreement shall be ratified and the instruments of ratification shall be exchanged at Tokyo as soon as possible.

(2) This Agreement shall enter into force on the thirtieth day after the date of exchange of instruments of ratification and 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 in the calendar year in which this Agreement enters into force;

(ii) in respect of other Australian tax, for any year of income beginning on or after 1 July in the calendar year in which this Agreement enters into force;

(b) in Japan—

in respect of income or profits for the taxable years beginning on or after 1 January in the calendar year in which this Agreement enters into force.

Article 23

This Agreement shall continue in effect indefinitely, but either Contracting State may, on or before 30 June in any calendar year beginning after the expiration of three years from the date of its entry into force, give to the other Contracting State, through diplomatic channels, written notice of termination, and, in such event, this Agreement 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 the commencement of the financial year beginning on 1 July in the calendar year next following that in which the notice of termination is given;

Sixth Schedule—continued

(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 Japan—

in respect of income or profits for the taxable years beginning on or after 1 January in the calendar year next following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Agreement.

DONE in duplicate at Canberra on the twentieth day of March, One thousand nine hundred and sixty-nine, in the English and Japanese languages, each text being equally authentic.

William McMahon	Fumihiko Kai
For the Government	For the Government
of the	of
Commonwealth of Australia	Japan

Protocol

The Government of the Commonwealth of Australia and the Government of Japan have agreed at the signing at Canberra on the twentieth day of March, One thousand nine hundred and sixty-nine of the Agreement between the two Governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income upon the following provisions which shall form an integral part of the said Agreement.

1. Nothing in Article 4 shall affect the operation of Divisions 14 and 15 of Part III of the Income Tax Assessment Act 1936-1968 of the Commonwealth, or that Act as amended from time to time, relating to a film business controlled abroad and insurance with non-residents or the corresponding provisions of a statute substituted for that Act. For the purposes of Article 17, an amount included under the provisions of the Divisions in taxable income shall be deemed to be income derived from sources in Australia.

2. In so far as it is customary in a Contracting State in determining the industrial or commercial profits derived by an enterprise from within the Contracting State to use methods of apportionment of the total profits of the enterprise to its various parts, including, in the case where profits derived from the sale by an enterprise of goods manufactured by it outside the Contracting State but sold by the enterprise in the Contracting State are being determined, a method which involves deducting from the sale price of the goods so sold in the Contracting State the amount for which goods of the same nature and quality could be purchased, at the date of shipment to the Contracting State, by a wholesaler in the country of manufacture and the expenses incurred in transporting them to and selling them in the Contracting State, those methods may be adopted for the purpose of the application of Article 4, provided that any such method shall be applied in such a way that the result accords with the principles stated in that Article.

3. Nothing in Articles 4 and 5 shall affect the application of any law of a Contracting State relating to the determination of the tax liability of an enterprise in cases where the information available to the competent authority of that Contracting State is inadequate to determine the profits for the purposes of Article 4 and paragraph (1) of Article 5, provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles stated in Articles 4 and 5.

4. For the purposes of Article 6 and Article 17, the carriage by ships or aircraft of passengers, livestock, mails or goods shipped in a place in Australia for discharge in the Territory of Papua or the Trust Territory of New Guinea shall be treated as an operation of a ship or aircraft confined solely to places in Australia.

Sixth Schedule—continued

5. Without prejudice to the position of the Government of Japan concerning the status in international law of the continental shelf, the Government of Japan agrees that the Government of the Commonwealth may, on income derived by a Japanese resident from or in connection with—

(a) the exploration for petroleum, of an area adjacent to Australia as specified in the Second Schedule to the Petroleum (Submerged Lands) Act 1967-1968, of the Commonwealth; or

(b) the exploitation of petroleum of such an area,

levy tax in accordance with the provisions of the Agreement as if that area were part of Australia as defined in the Agreement and each Contracting State shall apply the provisions of the Agreement accordingly. Provided that this paragraph shall only apply if Australian tax law is in force in relation to the area.

6. The Government of Japan agrees to the Government of the Commonwealth providing in its legislation giving the force of law to the Agreement that words in the Agreement in the singular include the plural and words therein in the plural include the singular, unless the context of the Agreement otherwise requires.

DONE in duplicate at Canberra on the twentieth day of March, One thousand nine hundred and sixty-nine, in the English and Japanese languages, each text being equally authentic.

William McMahon	Fumihiko Kai
For the Government	For the Government
of the	of
Commonwealth of Australia	Japan

SEVENTH SCHEDULE Section 3.

———

AGREEMENT BETWEEN THE GOVERNMENT OF THE COMMONWEALTH OF AUSTRALIA AND THE GOVERNMENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION OF INCOME DERIVED FROM INTERNATIONAL AIR TRANSPORT

The Government of the Commonwealth of Australia and the Government of the French Republic desiring to conclude an Agreement for avoidance of double taxation of income derived from international air transport,

Have agreed as follows:

Article 1

(1) The taxes which are the subject of this Agreement are:

(a) in Australia: the Commonwealth 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 France: Personal income tax (impôt sur le revenu des personnes physiques); complementary income tax (taxe complémentaire); company income tax (impôt sur les bénéfices des sociétés et autres personnes morales); the withholding tax on income from movable capital (retenue à la source sur les revenus de capitaux mobiliers); and the identical or substantially similar taxes on income and profits imposed on behalf of the French Overseas Territories (hereinafter referred to as “French tax”).

(2) This Agreement shall also apply to any other taxes of a substantially similar character imposed by either the French Republic or the Commonwealth of Australia subsequently to the date of signature of this Agreement.

Seventh Schedule—continued

Article 2

In this Agreement:

(a) the term “Australia” means the whole of the Commonwealth of Australia and includes—

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(b) the term “France” means the European and Overseas Departments and the Overseas Territories of the French Republic;

(d) the term “Australian enterprise” means a person who is a resident of Australia for the purposes of Australian tax and is not domiciled in France for the purposes of French tax;

(e) the term “French enterprise” means a person who is domiciled in France for the purposes of French tax and is not a resident of Australia for the purposes of Australian tax;

(f) the term “income from the operation of aircraft in international traffic” means income and profits from the carriage by air of passengers, cargo or mail between—

(i) Australia and France;

(ii) Australia and any other country;

(iii) France and any other country; or

(iv) countries other than Australia or France or places in any such country,

and includes income arid profits derived by a person engaged in such carriage from the sale of tickets on behalf of other persons for such carriage.

Article 3

(1) A French enterprise shall be exempt from Australian tax on—

(a) income from the operation of aircraft in international traffic; and

(b) income and profits from the carriage by air of passengers, cargo or mail between places in France.

(2) An Australian enterprise shall be exempt from French tax on—

(a) income from the operation of aircraft in international traffic; and

(b) income and profits from the carriage by air of passengers, cargo or mail between places in Australia.

(3) For the purposes of paragraph (1) of this Article income from the operation of aircraft in international traffic does not include income and profits arising from carriage by air of passengers, cargo or mail from a place in Australia to a place in the Territory of Papua or the Trust Territory of New Guinea.

Article 4

(1) Each Contracting Party shall notify the other of the date on which legislative or other provision has been made for giving the Agreement the force of law in its territory in accordance with its constitutional processes. The Agreement will enter into force on the date on which the later of these two notifications is received by the other Contracting Party. The provisions of the Agreement shall have effect—

(a) as regards Australian tax, for the year of income beginning on the first day of July 1966 and subsequent years of income; and

(b) as regards French tax, for the income derived during the year 1967 or accounting period ending in the course of that year, and subsequent years.

Seventh Schedule—continued

(2) This Agreement shall continue in effect indefinitely but either Contracting Party may, on or after the first day of January 1972 but on or before the thirtieth day of June in any calendar year, give to the other Contracting Party notice of termination and, in that event, this Agreement shall cease to be effective—

(a) as regards Australian tax, for the year of income beginning in the calendar year next following that in which the notice of termination is given and subsequent years of income; and

(b) as regards French tax, for the income derived during the year following the calendar year in which the notice of termination is given, or the accounting period beginning in the course of the calendar year following such notice, and subsequent years.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Agreement.

DONE in duplicate at Canberra on the twenty-seventh day of March, One thousand nine hundred and sixty-nine, in the English and French languages, both texts being equally authoritative.

For the Government	For the Government
of the Commonwealth	of the French
of Australia	Republic
William McMahon	André Favereau

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