GENERAL EFFECTIVE DATE UNDER ARTICLE 28: 1 DECEMBER …

1 DOUBLE TAXATION TAXES ON INCOMECONVENTION between THE UNITED STATES OF AMERICA AND AUSTRALIAC onvention signed at Sydney August 6, 1982;Transmitted by the President of the United States of America to the Senate September 14, 1982(Treaty Doc. , 97th Cong., 2d Sess.);Reported favorably by the Senate Committee on Foreign Relations July 11, 1983 (S. Ex. , 98th Cong., 1st Sess.);Advice and consent to ratification by the Senate July 27, 1983;Ratified by the President August 23, 1983;Ratified by australia October 19, 1983;Ratifications exchanged at Washington October 31, 1983;Proclaimed by the President DECEMBER 5, 1983.

2 Entered into force October 31, EFFECTIVE DATE UNDER ARTICLE 28: 1 DECEMBER 1983 TABLE OF ARTICLESA rticle 1---------------------------------Person al ScopeArticle 2 --------------------------------Taxes CoveredArticle 3 -------------------------------- GENERAL DefinitionsArticle 4 --------------------------------Residenc eArticle 5 --------------------------------Permanen t EstablishmentArticle 6 --------------------------------Income from Real PropertyArticle 7 --------------------------------Business ProfitsArticle 8 --------------------------------Shipping and Air TransportArticle 9

3 --------------------------------Associat ed EnterprisesArticle 10 -------------------------------Dividends ARTICLE 11 -------------------------------InterestA rticle 12 -------------------------------Royalties ARTICLE 13 -------------------------------Alienatio n of PropertyArticle 14 -------------------------------Independe nt Personal ServicesArticle 15 -------------------------------Dependent Personal ServicesArticle 16 -------------------------------Limitatio n on BenefitsArticle 17 -------------------------------Entertain ersArticle 18 -------------------------------Pensions, Annuities.

4 Alimony and Child SupportArticle 19 ------------------- -----------Governmental RemunerationArticle 20 -------------------------------StudentsA rticle 21 -------------------------------Income Not Expressly MentionedArticle 22 -------------------------------Relief from Double TaxationArticle 23 -------------------------------Non-Discr iminationArticle 24 -------------------------------Mutual Agreement ProcedureArticle 25 -------------------------------Exchange of InformationArticle 26 -------------------------------Diplomati c and Consular PrivilegesArticle 27 -------------------------------Miscellan eousArticle 28 -------------------------------Entry into ForceArticle 29 -------------------------------Terminati onLetter of Submittal---------------------of 17 August, 1982 Letter of Transmittal-------------------of 14 September.

5 1982 The Saving Clause -------------------Paragraph 3 of ARTICLE 1 TAX convention WITH AUSTRALIAMESSAGEFROMTHE PRESIDENT OF THE UNITED STATESTRANSMITTINGTHE convention between THE GOVERNMENT OF THEUNITED STATES OF AMERICA AND THE GOVERNMENT OFAUSTRALIA FOR THE AVOIDANCE OF DOUBLE TAXATION ANDTHE PREVENTION OF FISCAL EVASION WITH RESPECT TOTAXES ON INCOME, SIGNED AT SYDNEY ON AUGUST 6, 1982 LETTER OF SUBMITTALDEPARTMENT OF STATE,Washington, August 17, PRESIDENT,The White House. THE PRESIDENT: I have the honor to submit to you, with a view to its transmission to the Senatefor advice and consent to ratification, the convention between the Government of the United States ofAmerica and the Government of australia for the Avoidance of Double Taxation and the Prevention ofFiscal Evasion with Respect to Taxes on Income, signed at Sydney on August 6, 1982.

6 The convention is based to a large extent on the United States draft model income tax conventionpublished by the Department of the Treasury in June 1981 and the OECD model published in January1977. It takes into account changes in the income tax laws and tax treaty policies of the two countries. With respect to taxes on investment income, the convention provides that the tax at source may notexceed 15 percent on dividends and 10 percent on interest and royalties. At the request of the United States, the convention includes a provision permitting eitherContracting State to tax gains derived by a resident of the other State on the disposition of an interest inreal property located in the first State.

7 In addition, the convention allows the taxation of business profits in certain cases beyond thosecovered in the United States model by providing a somewhat broader definition of the term "permanentestablishment." For example, a building site becomes a permanent establishment if it exists for more than9 months (rather than the 12 months stipulated in the United States model) and supervisory activitiescarried on in connection with a building site for more than 9 out of 24 months constitute a permanentestablishment. The use of a rig or ship for 6 out of 24 months in connection with the exploration orextraction of natural resources also constitutes a permanent establishment.

8 The rules governing the taxation of remuneration for personal services are similar to those of otherUnited States tax treaties. The convention introduces a new ARTICLE on nondiscrimination not found in the existing ARTICLE , by its terms, will not apply to income tax laws reasonably designed to prevent the avoidanceor evasion of taxes, or to tax provisions which are in force on the date of signature of the convention (or subsequently enacted, but substantially similar in GENERAL purpose or intent to those already in force).Except for provisions in force on the date of signature, the nondiscrimination ARTICLE will apply even tothe above types of tax provisions, however, where such provisions (other than ones in internationalagreements) discriminate between citizens or residents of the other Contracting State and those of anythird State.

9 If either country considers that taxation measures adopted by the other country infringe uponthese principles, the competent authorities of the two countries will endeavor to resolve the issue. The convention will enter into force upon the exchange of instruments of ratification and itsprovisions will take effect as of the first day of the second month following that date. The 1953convention will cease to apply when the new convention takes effect. A technical memorandum explaining in detail the provisions of the convention is being prepared bythe Department of the Treasury and will be submitted to the Senate Committee on Foreign Relations.

10 The Department of the Treasury, with the cooperation of the Department of State, was primarilyresponsible for the negotiation of the convention . It has the approval of both Departments. Respectfully submitted,GEORGE P. OF TRANSMITTALTHE WHITE HOUSE, September 14, the Senate o/ the United States: I transmit herewith, for Senate advice and consent to ratification, the convention between theGovernment of the United States of America and the Government of australia for the Avoidance ofDouble Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income signed atSydney on August 6, 1982.