Income Tax (International Agreements) Amendment Act 1983

No. 57 of 1983

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

[Assented to 7 October 1983]

BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:

Short title, &c.

1. (1) This Act may be cited as the Income Tax (International Agreements) Amendment Act 1983.

(2) The Income Tax (International Agreements) Act 19531 is in this Act referred to as the Principal Act.

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 omitting “or” from paragraph (c) of the definition of “agreement” in sub-section (1);

(b) by adding at the end of the definition of “agreement” in sub-section (1) the following word and paragraph:

“or (e) the previous United States convention;”;

(c) by omitting from sub-section (1) the definition of “the Italian agreement” and substituting the following definitions:

“‘the Indian airline profits agreement’ means the Agreement between the Government of Australia and the Government of the Republic of India for the avoidance of double taxation of income derived from international air transport, being the agreement a copy of which in the English language is set out in Schedule 19;

‘the Irish agreement’ means the Agreement between the Government of Australia and the Government of Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains, being the agreement a copy of which is set out in Schedule 20;

‘the Italian airline profits agreement’ means the Agreement between the Government of Australia and the Government of Italy 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 Schedule 8;

‘the Italian convention’ means the Convention between Australia and the Republic of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the protocol to that convention, being the convention and protocol a copy of each of which in the English language is set out in Schedule 21;”;

(d) by inserting after the definition of “the Japanese agreement” in sub-section (1) the following definition:

“‘the Korean convention’ means the Convention between the Government of Australia and the Government of the Republic of Korea for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and the protocol to that convention, being the convention and protocol a copy of each of which in the English language is set out in Schedule 22;”;

(e) by inserting after the definition of “the New Zealand agreement” in sub-section (1) the following definition:

“‘the Norwegian convention’ means the Convention between Australia and the Kingdom of Norway for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income and on capital and the protocol to that convention, being the convention and protocol a copy of each of which is set out in Schedule 23;”; and

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

“‘the previous United States convention’ means the Convention between the Government of Australia and the Government of the United States of America for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income that was signed at Washington on 14 May 1953;”.

4. Section 6 of the Principal Act is repealed and the following section substituted:

Convention with United States of America

“6. (1) Subject to this Act, on and after the date of entry into force of the United States convention, the provisions of Articles 1 to 22 (inclusive) and Articles 24 to 29 (inclusive) of the convention, so far as those provisions affect Australian tax, have the force of law in relation to tax in respect of—

(a) income, being dividends, interest or royalties to which Article 10, 11 or 12, as the case may be, of the convention applies, derived on or after the first day of the second month following the month in which the convention enters into force, and in relation to which the convention remains effective; and

(b) income to which paragraph (a) does not apply, being income of a year of income commencing on or after the first day of the second month following the month in which the convention enters into force, and in relation to which the convention remains effective.

“(2) As soon as practicable after the entry into force of the United States convention in accordance with Article 28 of the convention, the Treasurer shall cause to be published in the Gazette a notice specifying the date on which the convention entered into force.

“(3) The provisions of the previous United States convention, so far as those provisions affect Australian tax, continue to have the force of law in relation to tax in respect of income in relation to which the convention remains effective.”.

Agreement with Singapore

5. (1) Section 7 of the Principal Act is amended by adding at the end thereof the following sub-section:

“(3) As soon as practicable after an exchange of Notes for the purpose of the making of an agreement under sub-paragraph (a) of paragraph (3) of Article 18 of the Singapore agreement that provisions granting an exemption from or reduction of Singapore tax are of a substantially similar character to the provisions of Parts V and VI of the Economic Expansion Incentives (Relief

from Income Tax) Act, 1967, of Singapore, the Treasurer shall cause to be published in the Gazette a notice specifying particulars of the first-mentioned provisions.”.

(2) The amendment made by sub-section (1) does not apply in relation to an exchange of Notes made before the commencement of this section.

Airline profits agreement with Italy

6. Section 10 of the Principal Act is amended by inserting “airline profits” after “Italian” (wherever occurring).

7. (1) After section 10 of the Principal Act the following section is inserted:

Convention with Italy

“10a. (1) Subject to this Act, on and after the date of entry into force of the Italian convention, the provisions of the convention, so far as those provisions affect Australian tax, have, and shall be deemed to have had, the force of law—

(a) in relation to withholding tax—in respect of dividends or interest derived on or after 1 July 1976 and in relation to which the convention remains effective; and

(b) in relation to tax other than withholding tax—in respect of income of any year of income commencing on or after 1 July 1976 and in relation to which the convention remains effective.

“(2) As soon as practicable after the entry into force of the Italian convention in accordance with Article 29 of the convention, the Treasurer shall cause to be published in the Gazette a notice specifying the date on which the convention entered into force.”.

(2) The Commissioner may amend an assessment made before the date of entry into force of the Italian convention for the purpose of giving effect to sub-section 10a (1) of the Principal Act as amended by this Act.

Agreement with Malaysia

8. (1) Section 11f of the Principal Act is amended by adding at the end thereof the following sub-section:

“(5) As soon as practicable after an Exchange of Letters for the purpose of the making of an agreement under sub-paragraph (a) (ii) of paragraph 5 of Article 23 of the Malaysian agreement that provisions are of a substantially similar character to the provisions specified in sub-paragraph (a) (i) of that paragraph, the Treasurer shall cause to be published in the Gazette a notice specifying particulars of the first-mentioned provisions.”.

(2) The amendment made by sub-section (1) does not apply in relation to an Exchange of Letters made before the commencement of this section.

9. (1) After section 11h of the Principal Act the following sections are inserted:

Airline profits agreement with the Republic of India

“11j. (1) Subject to this Act, on and after the date of entry into force of the Indian airline profits 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 derived on or after 1 April 1975 and in relation to which the agreement remains effective.

“(2) As soon as practicable after the entry into force of the Indian airline profits 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.

Agreement with Ireland

“11k. (1) Subject to this Act, on and after the date of entry into force of the Irish 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 1 July in the calendar year immediately following that 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 any year of income commencing on or after 1 July in the calendar year immediately following that in which the agreement enters into force and in relation to which the agreement remains effective.

“(2) As soon as practicable after the entry into force of the Irish agreement in accordance with Article 29 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.

Convention with the Republic of Korea

“11l. (1) Subject to this Act, on and after the date of entry into force of the Korean convention, the provisions of the convention, so far as those provisions affect Australian tax, have, and shall be deemed to have had, the force of law—

(a) in relation to withholding tax—in respect of dividends or interest derived on or after 1 January 1982 and in relation to which the convention remains effective; and

(b) in relation to tax other than withholding tax—in respect of income of any year of income commencing on or after 1 July 1982 and in relation to which the convention remains effective.

“(2) As soon as practicable after the entry into force of the Korean convention in accordance with Article 28 of the convention, the Treasurer shall

cause to be published in the Gazette a notice specifying the date on which the convention entered into force.

“(3) As soon as practicable after an exchange of letters for the purpose of the making of an agreement under sub-paragraph (3) (b) of Article 24 of the Korean convention as to the provisions of the laws of Korea relating to Korean tax that fall within the definition of the term ‘the relevant legislation’ for the purposes of sub-paragraph (3) (a) of that Article, the Treasurer shall cause to be published in the Gazette a notice specifying particulars of those provisions.

“(4) As soon as practicable after an exchange of letters for the purpose of the making of an agreement under paragraph (5) of Article 24 of the Korean convention fixing a date, the Treasurer shall cause to be published in the Gazette a notice specifying the date so fixed.

Convention with the Kingdom of Norway

“11m. (1) Subject to this Act, on and after the date of entry into force of the Norwegian convention, the provisions of the convention, so far as those provisions affect Australian tax, have, and shall be deemed to have had, the force of law—

(a) in relation to withholding tax—in respect of dividends or interest derived on or after 1 July 1982 and in relation to which the convention remains effective; and

(b) in relation to tax other than withholding tax—in respect of income of any year of income commencing on or after 1 July 1982 and in relation to which the convention remains effective.

“(2) As soon as practicable after the entry into force of the Norwegian convention in accordance with Article 29 of the convention, the Treasurer shall cause to be published in the Gazette a notice specifying the date on which the convention entered into force.

“(3) As soon as practicable after confirmation of receipt of a note forwarded by the Government of the Kingdom of Norway for the purposes of sub-paragraph (2) (b) of the protocol that forms part of the Norwegian convention, the Treasurer shall cause to be published in the Gazette a notice specifying the date of confirmation of receipt of the note.”.

(2) The Commissioner may amend an assessment made before the date of entry into force of the Indian airline profits agreement for the purpose of giving effect to sub-section 11j (1) of the Principal Act as amended by this Act.

(3) The Commissioner may amend an assessment made before the date of entry into force of the Korean convention for the purpose of giving effect to sub-section 11l (1) of the Principal Act as amended by this Act.

(4) The Commissioner may amend an assessment made before the date of entry into force of the Norwegian convention for the purpose of giving effect to sub-section 11m (1) of the Principal Act as amended by this Act.

Provisions relating to certain income derived from sources in certain countries

10. (1) Section 12 of the Principal Act is amended—

(a) by omitting from paragraph (1) (an) “or” (last occurring); and

(b) by inserting after paragraph (1) (an) the following paragraphs:

“(ao) income being interest or royalties to which paragraph (1) of Article 11 or paragraph (1) of Article 12 of the United States convention applies, where the income is derived, on or after the first day of the second month following the month in which the convention enters into force, from sources in the United States of America;

“(ap) income being interest or royalties to which paragraph (1) of Article 12 or paragraph (1) of Article 13 of the Irish agreement applies, where the income is derived, in the year of income commencing on 1 July in the calendar year immediately following that in which the agreement enters into force, or a subsequent year of income, from sources in Ireland;

“(aq) income being interest or royalties to which paragraph (1) of Article 11 or paragraph (1) of Article 12 of the Italian convention applies, where the income was derived, in the year of income that commenced on 1 July 1976, or a subsequent year of income, from sources in Italy;

“(ar) income being interest or royalties to which paragraph (1) of Article 11 or paragraph (1) of Article 12 of the Korean convention applies, where the income was derived, in the year of income that commenced on 1 July 1982, or a subsequent year of income, from sources in Korea;

“(as) income being interest or royalties to which paragraph (1) of Article 11 or paragraph (1) of Article 12 of the Norwegian convention applies, where the income was derived, in the year of income that commenced on 1 July 1982, or a subsequent year of income, from sources in Norway; or”.

(2) If a taxpayer derived, on or before 14 December 1982, income to which paragraph 12 (1) (aq) of the Principal Act as amended by this Act applies, that paragraph in its application in relation to that income shall not operate to increase the Australian tax payable by the taxpayer in respect of the year of income unless there is a decrease, by virtue of the Italian convention, in the tax payable under the law of Italy in respect of that income and, where there is such a decrease, the amount of the increase shall not exceed the amount of the decrease expressed in Australian currency.

(3) If a taxpayer derived, on or before 12 July 1982, income to which paragraph 12 (1) (ar) of the Principal Act as amended by this Act applies, that paragraph in its application in relation to that income shall not operate to increase the Australian tax payable by the taxpayer in respect of the year of

income unless there is a decrease, by virtue of the Korean convention, in the tax payable under the law of Korea in respect of that income and, where there is such a decrease, the amount of the increase shall not exceed the amount of the decrease expressed in Australian currency.

(4) If a taxpayer derived, on or before 6 May 1982, income to which paragraph 12 (1) (as) of the Principal Act as amended by this Act applies, that paragraph in its application in relation to that income shall not operate to increase the Australian tax payable by the taxpayer in respect of the year of income unless there is a decrease, by virtue of the Norwegian convention, in the tax payable under the law of Norway in respect of that income and, where there is such a decrease, the amount of the increase shall not exceed the amount of the decrease expressed in Australian currency.

(5) The Commissioner may amend an assessment made before the date of entry into force of the Italian convention for the purpose of giving effect to paragraph 12 (1) (aq) of the Principal Act as amended by this Act (including that paragraph as affected by sub-section (2) of this section).

(6) The Commissioner may amend an assessment made before the date of entry into force of the Korean convention for the purpose of giving effect to paragraph 12 (1) (ar) of the Principal Act as amended by this Act (including that paragraph as affected by sub-section (3) of this section).

(7) The Commissioner may amend an assessment made before the date of entry into force of the Norwegian convention for the purpose of giving effect to paragraph 12 (1) (as) of the Principal Act as amended by this Act (including that paragraph as affected by sub-section (4) of this section).

Repeal of section 19a

11. (1) Section 19a of the Principal Act is repealed.

(2) Notwithstanding the repeal effected by sub-section (1), section 19a of the Principal Act continues to have effect in relation to tax in respect of income in relation to which the previous United States convention remains effective as if the references in that section to the United States convention were references to the previous United States convention.

Collection of tax due to the United States of America

12. (1) Section 20 of the Principal Act is amended by omitting from sub-section (1) “Article XVI” and substituting “paragraph (5) of Article 25”.

(2) The amendment made by sub-section (1) does not apply in relation to tax in respect of income in relation to which the previous United States convention remains effective.

(3) Section 20 of the Principal Act has effect in relation to tax in respect of income in relation to which the previous United States convention remains effective as if the references in that section to the United States convention were references to the previous United States convention.

13. Schedule 2 to the Principal Act is repealed and the Schedule set out in Schedule 1 to this Act is substituted.

Addition of Schedules

14. The Principal Act is amended by adding at the end thereof the Schedules set out in Schedule 2 to this Act.

SCHEDULE 1 Section 13

SCHEDULE TO BE SUBSTITUTED FOR SCHEDULE 2 TO THE PRINCIPAL ACT

“SCHEDULE 2 Section 3

CONVENTION BETWEEN THE GOVERNMENT

OF AUSTRALIA

AND THE GOVERNMENT OF

THE UNITED STATES OF AMERICA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Australia and the Government of the United States of America,

Desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,

Have agreed as follows:

ARTICLE 1

Personal Scope

(1) Except as otherwise provided in this Convention, this Convention shall apply to persons who are residents of one or both of the Contracting States.

(2) This Convention shall not restrict in any manner any exclusion, exemption, deduction, rebate, credit or other allowance accorded from time to time:

(a) by the laws of either Contracting State; or

(b) by any other agreement between the Contracting States.

(3) Notwithstanding any provision of this Convention, except paragraph (4) of this Article, a Contracting State may tax its residents (as determined under Article 4 (Residence)) and individuals electing under its domestic law to be taxed as residents of that State, and by reason of citizenship may tax its citizens, as if this Convention had not entered into force. For this purpose, the term ‘citizen’ shall, with respect to United States source income according to United States law relating to United States tax, include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of 10 years following such loss.

(4) The provisions of paragraph (3) shall not affect:

(a) the benefits conferred by a Contracting State under paragraph (2) of Article 9 (Associated Enterprises), paragraph (2) or (6) of Article 18 (Pensions, Annuities, Alimony and Child Support), Article 22 (Relief from Double Taxation), 23 (Non-Discrimination), 24 (Mutual Agreement Procedure) or paragraph (1) of Article 27 (Miscellaneous); or

(b) the benefits conferred by a Contracting State under Article 19 (Governmental Remuneration), 20 (Students) or 26 (Diplomatic and Consular Privileges) upon individuals who are neither citizens of, nor have immigrant status in, that State (in the case of benefits conferred by the United States), or who are not ordinarily resident in that State (in the case of benefits conferred by Australia).

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are:

(a) in the United States: the Federal income taxes imposed by the Internal Revenue Code, but excluding the accumulated earnings tax and the personal holding company tax; and

(b) in Australia: the Australian income tax, including the additional tax upon the undistributed amount of the distributable income of a private company.

SCHEDULE 1—continued

(2) This Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Convention in addition to, or in place of, the existing taxes. At the end of each calendar year, the competent authority of each Contracting State shall notify the competent authority of the other Contracting State of any substantial changes which have been made during that year in the laws of his State relating to the taxes to which this Convention applies or in the official interpretation of those laws or of this Convention.

ARTICLE 3

General Definitions

(1) For the purposes of this Convention, unless the context otherwise requires:

(a) the term ‘person’ includes an individual, an estate of a deceased individual, a trust, a partnership, a company and any other body of persons;

(b) the term ‘company’ means any body corporate or any entity which is treated as a company or body corporate for tax purposes;

(c) the terms ‘enterprise of one of the Contracting States’ and ‘enterprise of the other Contracting State’ mean an enterprise carried on by a resident of Australia or an enterprise carried on by a resident of the United States, as the context requires;

(d) the term ‘international traffic’ means any transport by a ship or aircraft, except where such transport is solely between places within a Contracting State;

(e) the term ‘competent authority’ means:

(i) in the case of the United States: the Secretary of the Treasury or his delegate; and

(ii) in the case of Australia: the Commissioner of Taxation or his authorized representative;

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

(g) (i) the term ‘United States corporation’ means a corporation which, under United States law relating to United States tax, is a domestic corporation or an unincorporated entity treated as a domestic corporation, and which is not, under the law of Australia relating to Australian tax, a resident of Australia; and

(ii) the term ‘Australian corporation’ means a company, as defined under the law of Australia relating to Australian tax, which, under that law, is a resident of Australia, and which is not, under United States law relating to United States tax, a domestic corporation or an unincorporated entity treated as a domestic corporation;

(h) the term ‘State’ means any National State, whether or not one of the Contracting States;

(i) the term ‘United States tax’ means tax imposed by the United States to which this Convention applies by virtue of Article 2 (Taxes Covered) and the term ‘Australian tax’ means tax imposed by Australia to which this Convention applies by virtue of Article 2 (Taxes Covered), but neither term includes any amount which represents a penalty or interest imposed under the law of either Contracting State relating to United States tax or Australian tax;

(j) (i) the term ‘United States’ means the United States of America; and

(ii) when used in a geographical sense, the term ‘United States’ means the states thereof and the District of Columbia and also includes:

(a) the territorial waters thereof; and

(B) the sea-bed and subsoil of the submarine areas adjacent to the coast thereof, but beyond the territorial waters, over which the United States exercises rights, in accordance with international law, for the purposes of exploration for, or exploitation of, the natural resouces of those areas;

(k) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes:

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Coral Sea Islands Territory; and

SCHEDULE 1—continued

(vi) any area adjacent to the territorial limits of Australia or of the said Territories in respect of which there is for the time being in force, consistently with international law, a law of Australia or of a State or part of Australia or of a Territory aforesaid dealing with the exploitation of any of the natural resources of the sea-bed and subsoil of the continental shelf;

(1) the terms ‘resident of one of the Contracting States’ and ‘resident of the other Contracting State’ mean a resident of Australia or a resident of the United States, as the context requires.

(2) As regards the application of this Convention by one of the Contracting States, any term not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State relating to the taxes to which this Convention applies.

ARTICLE 4

Residence

(1) For the purposes of this Convention:

(a) a person is a resident of Australia if the person is:

(i) an Australian corporation; or

(ii) any other person (except a company as defined under the law of Australia relating to Australian tax) who, under that law, is a resident of Australia,

provided that, in relation to any income, a person who:

(iii) is subject to Australian tax on income which is from sources in Australia; or

(iv) is a partnership, an estate of a deceased individual or a trust (other than a trust that is a provident, benefit, superannuation or retirement fund, or that is established for public charitable purposes or for the purpose of enabling scientific research to be conducted by or in conjunction with a public university or public hospital, the income of which is exempt from tax under the law of Australia relating to Australian tax),

shall not be treated as a resident of Australia except to the extent that the income is subject to Australian tax as the income of a resident, either in the hands of that person or in the hands of a partner or beneficiary, or, if that income is exempt from Australian tax, is so exempt solely because it is subject to United States tax; and

(b) a person is a resident of the United States if the person is:

(i) a United States corporation; or

(ii) any other person (except a corporation or unincorporated entity treated as a corporation for United States tax purposes) resident in the United States for purposes of its tax, provided that, in relation to any income derived by a partnership, an estate of a deceased individual or a trust, such person shall not be treated as a resident of the United States except to the extent that the income is subject to United States tax as the income of a resident, either in its hands or in the hands of a partner or beneficiary, or, if that income is exempt from United States tax, is exempt other than because such person, partner or beneficiary is not a United States person according to United States law relating to United States tax.

(2) Where by application of paragraph (1) an individual is a resident of both Contracting States, he shall be deemed to be a resident of the State:

(a) in which he maintains his permanent home;

(b) if the provisions of sub-paragraph (a) do not apply, in which he has an habitual abode if he has his permanent home in both Contracting States or in neither of the Contracting States; or

(c) if the provisions of sub-paragraphs (a) and (b) do not apply, with which his personal and economic relations are closer if he has an habitual abode in both Contracting States or in neither of the Contracting States.

For the purposes of this paragraph, in determining an individual’s permanent home, regard shall be given to the place where the individual dwells with his family, and in determining the Contracting State with which an individual’s personal and economic relations are closer, regard shall be given to his citizenship (if he is a citizen of one of the Contracting States).

(3) An individual who is deemed to be a resident of one of the Contracting States for any year of income, or taxable year, as the case may be by reason of the provisions of paragraph (2) shall, for all purposes of this Convention, be deemed to be a resident only of that State for such year.

SCHEDULE 1—continued

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Convention, the term ‘permanent establishment’ means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term ‘permanent establishment’ shall include especially:

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;

(g) an agricultural, pastoral or forestry property;

(h) a building site or construction, assembly or installation project which exists for more than 9 months; and

(i) an installation, drilling rig or ship that, for an aggregate period of at least 6 months in any 24 month period, is used by an enterprise of one of the Contracting States in the other Contracting State for dredging or for or in connection with the exploration or exploitation of natural resources of the sea-bed and subsoil.

(3) Notwithstanding paragraphs (1) and (2), an enterprise of one of the Contracting States shall not be regarded as having a permanent establishment solely as a result of one or more of the following:

(a) the use of facilities 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 for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

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

(f) the maintenance of a building site or construction, assembly or installation project which does not exist for more than 9 months; or

(g) the use by that enterprise in the other Contracting State, of an installation, drilling rig or ship for dredging, or for or in connection with the exploration or exploitation of natural resources of the sea-bed and subsoil, provided that such use is not for an aggregate period of at least 6 months in any 24 month period.

(4) Notwithstanding paragraphs (1) and (2), an enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if:

(a) it carries on business in that other State through a person, other than an agent of independent status to whom paragraph (5) applies, who has authority to conclude contracts on behalf of that enterprise and habitually exercises that authority in that other State, unless the activities of such person are limited to those mentioned in paragraph (3) which, if exercised through a fixed place of business, would not make that fixed place of business a permanent establishment under the provisions of that paragraph;

(b) it maintains substantial equipment for rental or other purposes within that other State (excluding equipment let under a hire-purchase agreement) for a period of more than 12 months;

(c) it engages in supervisory activities in that other State for more than 9 months in any 24 month period in connection with a building site or construction, assembly or installation project in that other State; or

(d) it has goods or merchandise belonging to it that:

(i) were purchased by it in that other State, and not subjected to prior substantial processing outside that other State; or

SCHEDULE 1—continued

(ii) were produced by it or on its behalf in that other State, and are, after such purchase or production, subjected to substantial processing in that other State by an enterprise where either enterprise participates directly or indirectly in the management, control or capital of the other enterprise, or where the same persons participate directly or indirectly in the management, control or capital of both enterprises.

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

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

(7) The principles set forth in the preceding paragraphs of this Article shall be applied in determining for purposes of this Convention whether there is a permanent establishment in a State other than one of the Contracting States and whether an enterprise other than an enterprise of one of the Contracting States has a permanent establishment in one of the Contracting States.

ARTICLE 6

Income from Real Property

(1) Income from real property may be taxed by the Contracting State in which such real property is situated.

(2) For the purposes of this Convention:

(i) a leasehold interest in land, whether or not improved, shall be regarded as real property situated where the land to which the interest relates is situated; and

(ii) rights to exploit or to explore for natural resources shall be regarded as real property situated where the natural resources are situated or sought.

ARTICLE 7

Business Profits

(1) The business profits of an enterprise of one of the Contracting States shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the business profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the business profits which it might be expected to make if it were a distinct and independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment or with other enterprises with which it deals.

(3) In the determination of the business profits of a permanent establishment, there shall be allowed as deductions expenses which are reasonably connected with the profits (including executive and general administrative expenses) and which would be deductible if the permanent establishment were an independent entity which paid those expenses, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.

(4) No business 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) For the purposes of the preceding paragraphs of this Article, the business profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

SCHEDULE 1—continued

(6) Where business profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

(7) Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the tax liability of a person in cases where the information available to the competent authority of that State is inadequate to determine the profits to be attributed to a permanent establishment, provided that, on the basis of the available information, the determination of the profits of the permanent establishment is consistent with the principles stated in this Article.

(8) Nothing in this Article shall in a Contracting State prevent the operation in that State of its law relating specifically to the taxation of any person who carries on the business of any form of insurance (as long as that law as in effect on the date of signature of this Convention is not varied otherwise than in minor respects so as not to affect its general character).

ARTICLE 8

Shipping and Air Transport

(1) Profits derived by a resident of one of the Contracting States from the operation in international traffic of ships or aircraft shall be taxable only in that State. For the purposes of this Article, profits from the operation in international traffic of ships or aircraft include:

(a) profits from the lease on a full basis of ships or aircraft operated in international traffic by the lessee, provided that the lessor either operates ships or aircraft otherwise than solely between places in the other Contracting State or regularly leases ships or aircraft on a full basis; and

(b) profits from the lease of ships or aircraft on a bare boat basis or of containers and related equipment, provided that such lease is merely incidental to the operation in international traffic of ships or aircraft by the lessor and the leased ships or aircraft are operated in international traffic, or the containers and related equipment are used in international traffic, by the lessee.

(2) The provisions of paragraph (1) shall apply to the share of the profits from the operation in international traffic of ships or aircraft derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organization or in an international operating agency.

(3) For the purposes of this Article, profits derived from the carriage by ships or aircraft of passengers, livestock, mail, goods or merchandise shipped in a Contracting State for discharge at another place in that State shall not be treated as profits from the operation in international traffic of ships or aircraft and may be taxed in that State.

ARTICLE 9

Associated Enterprises

(1) Where:

(a) an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and an enterprise of the other Contracting State,

and in either case conditions operate between the two enterprises in their commercial or financial relations which differ from those which might be expected to operate between independent enterprises dealing wholly independently with one another, then any profits which, but for those conditions, might have been expected to accrue to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

(2) Where profits on which an enterprise of one of the Contracting States has been charged to tax in that State are also included, by virtue of paragraph (1), in the profits of an enterprise of the other Contracting State and taxed accordingly, and the profits so included are profits which might have been expected to have accrued to that enterprise of the other State if the conditions operative between the enterprises had been those which might have been expected to have operated between independent enterprises dealing wholly independently with one another, then the first-mentioned State shall make an appropriate adjustment to the amount of tax charged on those profits in the first-mentioned State.

SCHEDULE 1—continued

In determining such an adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

(3) Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the tax liability of a person, including determinations in cases where the information available to the competent authority of that State is inadequate to determine the income to be attributed to an enterprise, provided that, on the basis of the available information, the determination of that tax liability is consistent with the principles stated in this Article.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of one of the Contracting States for the purposes of its tax, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident for the purposes of its tax, and according to the law of that State, but the tax so charged shall not exceed 15 percent of the gross amount of the dividends.

(3) The term ‘dividends’ in this Article means income from shares and other income assimilated to income from shares by the taxation law of the Contracting State of which the company making the distribution is a resident for the purposes of its tax.

(4) The provisions of paragraph (2) shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State, being the State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.

(5) Where a company is a resident of one of the Contracting States, the other Contracting State may not impose any tax on dividends paid by the company, except insofar as:

(a) a resident of that other State is beneficially entitled to the dividends;

(b) the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State; or

(c) that other State does not impose a tax of the kind described in paragraph (6) (excluding the accumulated earnings tax and the personal holding company tax imposed by the United States) and the dividends are paid out of profits attributable to one or more permanent establishments which such company had in that other State, provided that the gross income attributable to such permanent establishments constituted at least 50 percent of such company’s gross income from all sources.

Where sub-paragraph (c) applies and sub-paragraphs (a) and (b) do not apply, any such tax shall not exceed 15 percent of the dividends.

(6) Nothing in this Convention shall be construed as preventing a Contracting State from imposing on the income of a company which is a resident of the other Contracting State, tax in addition to the taxes referred to in Article 2 in relation to the first-mentioned Contracting State which are payable by a company which is a resident of the first-mentioned State, provided that any such additional tax shall not exceed 15 percent of the amount by which the taxable income of the first-mentioned company of a year of income exceeds the tax payable on that taxable income to the first-mentioned State. Any tax payable to a Contracting State on the undistributed profits of a company which is a resident of the other Contracting State shall be calculated as if that company were not liable to the additional tax referred to in this paragraph and had paid dividends of such amount that tax equal to the amount of that additional tax would have been payable on the dividends in accordance with paragraph (2) of this Article.

SCHEDULE 1—continued

ARTICLE 11

Interest

(1) Interest from sources in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such interest may be taxed in the Contracting State in which it has its source, and according to the law of that State, but the tax so charged shall not exceed 10 percent of the gross amount of the interest.

(3) Paragraph (2) shall not apply if the person beneficially entitled to the interest, being a resident of one of the Contracting States, has a permanent establishment in the other Contracting State or performs independent personal services in that other State from a fixed base situated therein and the indebtedness giving rise to the interest is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.

(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, having regard to the indebtedness for which it is paid, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the interest paid shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

(5) The term ‘interest’ as used in this Convention includes income which, under the taxation law of the Contracting State in which the income has its source, is assimilated to income from money lent.

(6) A Contracting State may not impose any tax on interest paid by a resident of the other Contracting State, except insofar as:

(a) such interest has its source in the first-mentioned State, or is interest to which a resident of that State is beneficially entitled; or

(b) the indebtedness in respect of which the interest is paid is effectively connected with a permanent establishment or a fixed base of the beneficial owner of the interest situated in the first-mentioned State.

(7) Interest shall be treated as income from sources in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the interest, whether he is a resident of one of the Contracting States or not, has in one of the Contracting States or outside both Contracting States a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to have its source in the State in which the permanent establishment or fixed base is situated.

ARTICLE 12

Royalties

(1) Royalties from sources in one of the Contracting States, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such royalties may be taxed in the Contracting State in which they have their source, and according to the law of that State, but the tax so charged shall not exceed 10 percent of the gross amount of the royalties.

(3) Paragraph (2) shall not apply if the person beneficially entitled to the royalties, being a resident of one of the Contracting States, has a permanent establishment in the other Contracting State or performs independent personal services in that other State from a fixed base situated therein, and the property or rights giving rise to the royalties are effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply.

SCHEDULE 1—continued

(4) The term ‘royalties’ in this Article means:

(a) payments or credits of any kind to the extent to which they are consideration for the use of or the right to use any:

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

(ii) industrial, commercial or scientific equipment, other than equipment let under a hire purchase agreement;

(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;

(b) payments or credits of any kind to the extent to which they are consideration for:

(i) the supply of scientific, technical, industrial or commercial knowledge or information owned by any person;

(ii) the supply of any assistance of an ancillary and subsidiary nature furnished as a means of enabling the application or enjoyment of knowledge or information referred to in sub-paragraph (b) (i) or of any other property or right to which this Article applies; or

(iii) a total or partial forbearance in respect of the use or supply of any property or right described in this paragraph; or

(c) income derived from the sale, exchange or other disposition of any property or right described in this paragraph to the extent to which the amounts realized on such sale, exchange or other disposition are contingent on the productivity, use or further disposition of such property or right.

(5) Where, owing to a special relationship between the payer and the person beneficially entitled to the royalties or between both of them and some other person, the amount of the royalties paid or credited, having regard to what they are paid or credited for, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the royalties paid or credited shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

(6) (a) Royalties shall be treated as income from sources in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the royalties, whether he is a resident of one of the Contracting States or not, has in one of the Contracting States or outside both Contracting States a permanent establishment or fixed base in connection with which the liability to pay the royalties was incurred, and the royalties are borne by the permanent establishment or fixed base, then the royalties shall be deemed to have their source in the State in which the permanent establishment or fixed base is situated.

(b) Where sub-paragraph (a) does not operate to treat royalties as being from sources in one of the Contracting States, and the royalties relate to use or the right to use in one of the Contracting States of any property or right described in paragraph (4), the royalties shall be treated as income from sources in that State.

ARTICLE 13

Alienation of Property

(1) Income or gains derived by a resident of one of the Contracting States from the alienation or disposition of real property situated in the other Contracting State may be taxed in that other State.

(2) For the purposes of this Article:

(a) the term ‘real property situated in the other Contracting State’, where the United States is that other Contracting State, includes a United States real property interest, and real property referred to in Article 6 which is situated in the United States; and

(b) the term ‘real property’, in the case of Australia, shall have the meaning which it has under the laws in force from time to time in Australia and, without limiting the foregoing, includes:

(i) real property referred to in Article 6;

SCHEDULE 1—continued

(ii) shares or comparable interests in a company, the assets of which consist wholly or principally of real property situated in Australia; and

(iii) an interest in a partnership, trust or estate of a deceased individual, the assets of which consist wholly or principally of real property situated in Australia.

(3) Income or gains derived by an enterprise of one of the Contracting States from the alienation of ships, aircraft or containers operated or used by it in international traffic shall, except to the extent to which that enterprise has been allowed depreciation in the other Contracting State in respect of those ships, aircraft or containers, be taxable only in that State, and income described in sub-paragraph (4) (c) of Article 12 (Royalties) shall be taxable only in accordance with the provisions of Article 12.

(4) For the purposes of this Article, real property consisting of shares in a company referred to in sub-paragraph (2) (b) (ii), and interests in a partnership, trust or estate referred to in sub-paragraph (2) (b) (iii), shall be deemed to be situated in Australia.

ARTICLE 14

Independent Personal Services

Income derived by an individual who is a resident of one of the Contracting States from the performance of personal services in an independent capacity shall be taxable only in that State unless such services are performed in the other Contracting State and:

(a) the individual is present in that other State for a period or periods aggregating more than 183 days in the taxable year or year of income of that other State; or

(b) the individual has a fixed base regularly available to him in that other State for the purpose of performing his activities, in which case so much of the income as is attributable to that fixed base may be taxed in such other State.

ARTICLE 15

Dependent Personal Services

(1) Subject to the provisions of Articles 18 (Pensions, Annuities, Alimony and Child Support) and 19 (Governmental Remuneration), salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment or in respect of services performed as a director of a company shall be taxable only in that State unless the employment is exercised or the services performed in the other Contracting State. If the employment is so exercised or the services so performed, such remuneration as is derived from that exercise or performance may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State or in respect of services performed in the other Contracting State as a director of a company shall be taxable only in the first-mentioned State if:

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

(b) the remuneration is paid by, or on behalf of, an employer or company who is not a resident of that other State; and

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment, a fixed base or a trade or business which the employer or company has in that other State.

ARTICLE 16

Limitation on Benefits

(1) A person (other than an individual) which is a resident of one of the Contracting States shall not be entitled under this Convention to relief from taxation in the other Contracting State unless:

SCHEDULE 1—continued

(a) more than 75 percent of the beneficial interest in such person (or in the case of a company, more than 75 percent of the number of shares of each class of the company’s shares) is owned, directly or indirectly, by any combination of one or more of:

(i) individuals who are residents of the United States;

(ii) citizens of the United States;

(iii) individuals who are residents of Australia;

(iv) companies as described in sub-paragraph (b); and

(v) the Contracting States;

(b) it is a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange in one of the Contracting States; or

(c) the establishment, acquisition and maintenance of such person and the conduct of its operations did not have as one of its principal purposes the purpose of obtaining benefits under the Convention.

(2) For the purposes of sub-paragraph (1) (b), the term ‘a recognized stock exchange’ includes, in relation to the United States, the NASDAQ System owned by the National Association of Securities Dealers, Inc.

(3) Where:

(a) income derived by a trustee is to be treated for the purposes of this Convention as income of a resident of one of the Contracting States; and

(b) the trustee derived the income in connection with a scheme a principal purpose of which was to obtain a benefit under this Convention,

then, notwithstanding any other provision of this Convention, the Convention does not apply in relation to that income.

ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 (Independent Personal Services) and 15 (Dependent Personal Services), income derived by entertainers (such as theatrical, motion picture, radio or television artistes, musicians and athletes) from their personal activities as such may be taxed in the Contracting State in which these activities are exercised, except where the amount of the gross receipts derived by any such entertainer, including expenses reimbursed to him or borne on his behalf, from such activities does not exceed ten thousand United States dollars ($10,000) or its equivalent in Australian dollars for the taxable year or year of income concerned.

(2) Where income in respect of activities exercised by an entertainer in his capacity as such accrues not to the entertainer but to another person, that income may, notwithstanding the provisions of Articles 7 (Business Profits), 14 (Independent Personal Services) and 15 (Dependent Personal Services), be taxed in the Contracting State in which the activities of the entertainer are exercised, unless it is established that neither the entertainer nor any person related to him participates directly or indirectly in any profits of such other person in any manner, including the receipt of deferred remuneration, bonuses, fees, dividends, partnership distributions or other distributions.

ARTICLE 18

Pensions, Annuities, Alimony and Child Support

(1) Subject to the provisions of Article 19 (Governmental Remuneration), pensions and other similar remuneration paid to an individual who is a resident of one of the Contracting States in consideration of past employment shall be taxable only in that State.

(2) Social security payments and other public pensions paid by one of the Contracting States to an individual who is a resident of the other Contracting State or a citizen of the United States shall be taxable only in the first-mentioned State.

(3) Annuities paid to an individual who is a resident of one of the Contracting States shall be taxable only in that State.

SCHEDULE 1—continued

(4) The term ‘pensions and other similar remuneration’, as used in this Article, means periodic payments made by reason of retirement or death, in consideration for services rendered, or by way of compensation paid after retirement for injuries received in connection with past employment.

(5) The term ‘annuities’, as used in this Article, means stated sums paid periodically at stated times during life, or during a specified or ascertainable number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered or to be rendered).

(6) Any alimony or other maintenance payments, including payments for the support of a minor child, arising in one of the Contracting States and paid to a resident of the other Contracting State, shall be taxable only in the first-mentioned State.

ARTICLE 19

Governmental Remuneration

Wages, salaries, and similar remuneration, including pensions, paid from funds of one of the Contracting States, of a state or other political subdivision thereof or of an agency or authority of any of the foregoing for labor or personal services performed as an employee of any of the above in the discharge of governmental functions to a citizen of that State shall be exempt from tax by the other Contracting State.

ARTICLE 20

Students

Where a student, who is a resident of one of the Contracting States or who was a resident of that State immediately before visiting the other Contracting State and who is temporarily present in that other State for the purpose of his full-time education, receives payments from sources outside that other State for the purpose of his maintenance or education, those payments shall be exempt from tax in that other State.

ARTICLE 21

Income Not Expressly Mentioned

(1) Items of income of a resident of one of the Contracting States which are not expressly mentioned in the foregoing Articles of this Convention shall be taxable only in that State.

(2) However, if such income is derived by a resident of one of the Contracting States from sources in the other Contracting State, such income may also be taxed in the State in which it has its source.

(3) The provisions of paragraph (1) shall not apply to income derived by a resident of one of the Contracting States which is effectively connected with a permanent establishment situated in the other Contracting State. In such a case, the provisions of Article 7 (Business Profits) shall apply.

ARTICLE 22

Relief from Double Taxation

(1) Subject to paragraph (4) and in accordance with the provisions and subject to the limitations of the law of the United States (as it may be amended from time to time without changing the general principle hereof), in the case of the United States, double taxation shall be avoided as follows:

(a) the United States shall allow to a resident or citizen of the United States as a credit against United States tax the appropriate amount of income tax paid to Australia; and

(b) in the case of a United States corporation owning at least 10 percent of the voting stock of a company which is a resident of Australia from which it receives dividends in any taxable year, the United States shall also allow as a credit against United States tax the appropriate amount of income tax paid to Australia by that company with respect to the profits out of which such dividends are paid.

Such appropriate amount shall be based upon the amount of income tax paid to Australia. For purposes of applying the United States credit in relation to income tax paid to Australia the taxes referred to in sub-paragraph (1) (b) and paragraph (2) of Article 2 (Taxes Covered) shall be

SCHEDULE 1—continued

considered to be income taxes. No provision of this Convention relating to source of income shall apply in determining credits against United States tax for foreign taxes other than those referred to in sub-paragraph (1) (b) and paragraph (2) of Article 2 (Taxes Covered).

(2) Subject to paragraph (4), United States tax paid under the law of the United States and in accordance with this Convention, other than United States tax imposed in accordance with paragraph (3) of Article 1 (Personal Scope) solely by reason of citizenship or by reason of an election by an individual under United States domestic law to be taxed as a resident of the United States, in respect of income derived from sources in the United States by a person who, under Australian law relating to Australian tax, is a resident of Australia shall be allowed as a credit against Australian tax payable in respect of the income. The credit shall not exceed the amount of Australian tax payable on the income or any class thereof or on income from sources outside Australia. Subject to these general principles, the credit shall be in accordance with the provisions and subject to the limitations of the law of Australia as that law may be in force from time to time.

(3) An Australian corporation that owns at least 10 percent of the voting power in a United States corporation is, in accordance with the law of Australia as in force at the date of signature of this Convention, entitled to a rebate in its assessment, at the average rate of tax payable by it, in respect of dividends paid by the United States corporation that are included in the taxable income of the Australian corporation. However, should the law as so in force be amended so that the rebate in relation to the dividends ceases to be allowable under that law, Australia shall allow credit under paragraph (2) for the United States tax paid on the profits out of which the dividends are paid as well as for the United States tax paid on the dividends.

(4) For the purposes of computing United States tax, where a United States citizen is a resident of Australia, the United States shall allow as a credit against United States tax the income tax paid to Australia after the credit referred to in paragraph (2). The credit so allowed against United States tax shall not reduce that portion of the United States tax that is creditable against Australian tax in accordance with paragraph (2).

ARTICLE 23

Non-Discrimination

(1) Each Contracting State in enacting tax measures shall ensure that:

(a) citizens of a Contracting State who are residents of the other Contracting State shall not be subjected in that other State to any taxation or any requirement connected therewith which is more burdensome than the taxation or connected requirements to which citizens of that other State who are residents of that other State in the same circumstances are or may be subjected;

(b) except where the provisions of paragraph (1) of Article 9 (Associated Enterprises), paragraph (4) of Article 11 (Interest) or paragraph (5) of Article 12 (Royalties) apply, interest, royalties and other disbursements paid by a resident of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of the resident of the first-mentioned State, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State;

(c) a corporation of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is more burdensome than the taxation or connected requirements to which other similar corporations of the first-mentioned State in the same circumstances are or may be subjected; and

(d) the taxation on a permanent establishment which a resident of a Contracting State has in the other Contracting State shall not be less favorably levied in that other State than the taxation levied on residents of that other State that carry on the same activities in the same circumstances.

(2) Nothing in this Article relates to any provision of the taxation laws of a Contracting State:

(a) in force on the date of signature of this Convention;

(b) adopted after the date of signature of this Convention but which is substantially similar in general purpose or intent to a provision covered by sub-paragraph (a); or

SCHEDULE 1—continued

provided that, with respect to provisions covered by sub-paragraphs (b) or (c), such provisions (other than provisions in international agreements) do not discriminate between citizens or residents of the other Contracting State and those of any third State.

(3) Without limiting by implication the interpretation of this Article, it is hereby declared that, except to the extent expressly so provided, nothing in the Article prevents a Contracting State from distinguishing in its taxation laws between residents and non-residents solely on the ground of their residence.

(4) Where one of the Contracting States considers that the taxation measures of the other Contracting State infringe the principles set forth in this Article the Contracting States shall consult together in an endeavor to resolve the matter.

ARTICLE 24

Mutual Agreement Procedure

(1) (a) Where a resident of one of the Contracting States considers that the action of one or both of the Contracting States results or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident or citizen. The case must be presented within three years from the first notification of that action.

(b) Should the claim be considered to have merit by the competent authority of the Contracting State to which the claim is made, that competent authority shall seek to come to an agreement with the competent authority of the other Contracting State with a view to the avoidance of taxation contrary to the provisions of this Convention. Any agreement reached shall be implemented notwithstanding any time limits or other procedural limitations in the domestic law of the Contracting States.

(2) The competent authorities of the Contracting States shall seek to resolve by agreement any difficulties or doubts arising as to the application or interpretation of this Convention. In particular the competent authorities of the Contracting States may agree:

(a) to the same attribution of income, deductions, credits, or allowances of an enterprise of one of the Contracting States to its permanent establishment situated in the other Contracting State;

(b) to the same allocation of income, deductions, credits, or allowances between persons;

(d) to the same meaning of any term used in this Convention; or

(e) to which of the Contracting States an individual described in sub-paragraph (2) (c) of Article 4 (Residence) has closer personal and economic relations.

(3) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of this Article.

ARTICLE 25

Exchange of Information

(1) The competent authorities shall exchange such information as is necessary for carrying out the provisions of this Convention or for the prevention of fraud or for the administration of statutory provisions concerning taxes to which this Convention applies provided the information is of a class that can be obtained under the laws and administrative practices of each Contracting State with respect to its own taxes.

(2) Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those (including a Court or administrative body) concerned with the assessment, collection, administration or enforcement of, or with litigation with respect to, the taxes to which this Convention applies.

(3) No information shall be exchanged which would be contrary to public policy.

(4) If specifically requested by the competent authority of one of the Contracting States, the competent authority of the other Contracting State shall provide information under this Article in the

SCHEDULE 1—continued

form of copies of unedited original documents (including books, papers, statements, records, accounts or writings) to the same extent such documents can be obtained under the laws and administrative practices of that other State with respect to its own taxes.

(5) Each of the Contracting States shall endeavor to collect on behalf of the other Contracting State amounts equal to such taxes imposed by the other State as will ensure that any exemption or reduction in rate of tax granted under this Convention by that other State shall not be enjoyed by persons not entitled to such benefits.

ARTICLE 26

Diplomatic and Consular Privileges

Nothing in this Convention shall affect diplomatic and consular privileges under the general rules of international law or under the provisions of special agreements.

ARTICLE 27

Miscellaneous

(1) (a) Income derived by a resident of the United States which, under this Convention, may be taxed in Australia shall for the purposes of the income tax law of Australia and of this Convention be deemed to be income from sources in Australia.

(b) Income derived by a resident of Australia which, under this Convention, may be taxed in the United States, other than income taxed by the United States in accordance with paragraph (3) of Article 1 (Personal Scope) solely by reason of citizenship or by reason of an election by an individual under United States domestic law to be taxed as a resident of the United States, shall for the purposes of paragraph (2) of Article 22 (Relief from Double Taxation) and of the income tax law of Australia be deemed to be income from sources in the United States.

(c) Where paragraph (4) of Article 22 (Relief from Double Taxation) applies, income referred to in that paragraph shall be deemed to have its source in Australia to the extent necessary to give effect to the provisions of that paragraph.

(2) Any exemption from tax by one of the Contracting States provided for in Article 14 (Independent Personal Services), 15 (Dependent Personal Services), 17 (Entertainers) or 19 (Governmental Remuneration) shall be inapplicable to the extent that the income to which the exemption relates is not or, upon the application of the relevant Article of this Convention (prior to application of this paragraph), will not be subject to tax by the other Contracting State.

ARTICLE 28

Entry into Force

(1) This Convention shall be subject to ratification in accordance with the applicable procedures of each Contracting State, and instruments of ratification shall be exchanged at Washington, D.C., as soon as possible.

(2) The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect:

(a) with respect to those dividends, interest and royalties to which Articles 10 (Dividends), 11 (Interest) and 12 (Royalties), respectively, apply and which are paid, credited or otherwise derived on or after the first day of the second month following the date on which the Convention enters into force; and

(b) with respect to all other income of a taxpayer, for the taxpayer’s years of income or taxable years, as the case may be, commencing on or after the first day of the second month following the date on which the Convention enters into force.

(3) Subject to paragraph (4), the Convention between the Government of the United States of America and the Government of the Commonwealth of Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed at Washington on May 14, 1953 (in this Article referred to as the 1953 Convention) shall cease to have effect with respect to taxes to which this Convention applies under paragraph (2).

SCHEDULE 1—continued

(4) The 1953 Convention shall terminate on the expiration of the last date on which it has effect in accordance with the foregoing provisions of this Article.

ARTICLE 29

Termination

(1) This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force, provided that at least 6 months prior notice of termination has been given through the diplomatic channel. In such event, the Convention shall cease to have effect:

(a) with respect to those dividends, interest and royalties to which Articles 10 (Dividends), 11 (Interest) and 12 (Royalties) respectively apply, and which are paid, credited or otherwise derived on or after the first day of January following the expiration of the 6 month period; and

(b) with respect to all other income of a taxpayer, for the taxpayer’s years of income or taxable years, as the case may be, commencing on or after the first day of January following the expiration of the 6 month period.

(2) Notwithstanding the provisions of paragraph (1), upon prior notice to be given through the diplomatic channel, the provisions of paragraph (2) of Article 18 (Pensions, Annuities, Alimony and Child Support) may be terminated by either Contracting State at any time after this Convention enters into force.

DONE in duplicate at Sydney this sixth day of August 1982.

JOHN HOWARD R. D. NESEN

FOR THE GOVERNMENT FOR THE GOVERNMENT OF

OF AUSTRALIA THE UNITED STATES OF AMERICA”.

————

SCHEDULE 2 Section 14

SCHEDULES TO BE ADDED TO THE PRINCIPAL ACT

“SCHEDULE 19 Section 3

AGREEMENT

BETWEEN

THE GOVERNMENT OF AUSTRALIA

AND

THE GOVERNMENT OF THE REPUBLIC OF INDIA

FOR

THE AVOIDANCE OF DOUBLE TAXATION OF INCOME

DERIVED FROM INTERNATIONAL AIR TRANSPORT

The Government of Australia and the Government of the Republic of India,

Desiring to conclude an Agreement for the avoidance of double taxation of income derived from international air transport,

Have agreed as follows:

Article 1

1. The existing taxes to which this Agreement shall apply are—

(a) in the case of Australia:

the Australian income tax, including the additional tax upon the undistributed amount of the distributable income of a private company, (hereinafter referred to as ‘Australian tax’);

(b) in the case of India:

(i) the income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961);

SCHEDULE 2—continued

(ii) the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964), (hereinafter referred to as ‘Indian tax’).

2. This Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the taxes referred to in paragraph 1 of this Article.

Article 2

1. For the purposes of this Agreement, unless the context otherwise requires—

(a) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes all Territories of Australia;

(b) the term ‘India’ means the territory of India as defined in the Constitution and the laws of India;

(d) the term ‘tax’ means ‘Australian tax’ or ‘Indian tax’, as the context requires;

(e) the term ‘enterprise of a Contracting State’ means an Australian enterprise or an Indian enterprise, as the context requires;

(f) the term ‘Australian enterprise’ means an enterprise that has its place of effective management in Australia;

(g) the term ‘Indian enterprise’ means an enterprise that has its place of effective management in India; and

(h) the term ‘operation of aircraft in international traffic’ means the operation of aircraft in the carriage of persons, livestock, goods or mail between—

(i) Australia and India;

(ii) Australia and any other country;

(iii) India and any other country;

(iv) countries other than Australia or India;

(v) places within a country other than Australia or India,

and, in relation to an enterprise engaged in the operation of aircraft for such carriage, includes the sale of tickets for and the provision of services connected with such carriage, either for the enterprise itself or for any other enterprise engaged in the operation of aircraft for such carriage.

2. In the application of the provisions of this Agreement by a Contracting State, any term used but not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes to which this Agreement applies.

Article 3

1. Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic or arising from the carriage by air of persons, livestock, goods or mail between places in that State, shall be exempt from tax in the other Contracting State.

2. The provisions of paragraph 1 shall also apply to the share of profits from the operation of aircraft in international traffic derived by an enterprise of a Contracting State through participation in a pooled service, in a joint air transport operation or in an international operating agency.

3. For the purpose of paragraph 1, interest on funds connected with the operation of aircraft in international traffic derived by an enterprise of a Contracting State engaged in such operation shall be regarded as income from the operation of aircraft in international traffic.

Article 4

1. This Agreement shall come into operation on the thirtieth day after the date on which the Government of Australia and the Government of the Republic of India exchange notes through the diplomatic channel notifying each other that the last of such things has been done as is necessary to give this Agreement the force of law in Australia and India respectively. The exchange of notes shall take place at New Delhi.

SCHEDULE 2—continued

2. The provisions of this Agreement shall have effect in respect of income derived on or after 1 April 1975.

Article 5

————

This Agreement shall continue in effect indefinitely but either Contracting State may, on or before 30 June in any calendar year after the year 1986, give written notice of termination to the other Contracting State through the diplomatic channel and in such event this Agreement shall cease to be effective in respect of income derived on or after 1 April in the calendar year next following the year in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto by their respective Governments, have signed the present Agreement.

DONE in duplicate at Canberra this thirty-first day of May one thousand nine hundred and eighty-three in the English and Hindi languages, the English text to prevail in the case of inconsistency.

J. S. DAWKINS D. KAMTEKAR

FOR THE GOVERNMENT FOR THE GOVERNMENT OF

OF AUSTRALIA THE REPUBLIC OF INDIA

————

“SCHEDULE 20

Section 3

AGREEMENT

BETWEEN

THE GOVERNMENT OF AUSTRALIA

AND

THE GOVERNMENT OF IRELAND

FOR

THE AVOIDANCE OF DOUBLE TAXATION

AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

AND CAPITAL GAINS

The Government of Australia and the Government of Ireland,

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

Have agreed as follows:

ARTICLE 1

Personal Scope

This Agreement shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Agreement shall apply are—

(a) in Australia: the Australian income tax, including the additional tax upon the undistributed amount of the distributable income of a private company;

(b) in Ireland:

(i) the income tax;

(ii) the corporation tax; and

(iii) the capital gains tax.

SCHEDULE 2—continued

(2) This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the existing taxes. As soon as possible after the end of each calendar year, the competent authority of each Contracting State shall notify the competent authority of the other Contracting State of any substantial changes which have been made in the laws of the State relating to the taxes to which this Agreement applies.

ARTICLE 3

General Definitions

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

(a) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes—

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Coral Sea Islands Territory; and

(b) the term ‘Ireland’ includes any area outside the territorial waters of Ireland which in accordance with international law has been or may hereafter be designated, under the laws of Ireland concerning the Continental Shelf, as an area within which the rights of Ireland with respect to the sea-bed and subsoil and their natural resources may be exercised;

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

(d) the term ‘person’ includes an individual, a company and any other body of persons;

(e) the term ‘company’ means any body corporate or any entity which is assimilated to a body corporate for tax purposes;

(f) the terms ‘enterprise of one of the Contracting States’ and ‘enterprise of the other Contracting State’ mean an enterprise carried on by a resident of Australia or an enterprise carried on by a resident of Ireland, as the context requires;

(g) the term ‘tax’ means Australian tax or Irish tax, as the context requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to which this Agreement applies by virtue of Article 2;

(i) the term ‘Irish tax’ means tax imposed by Ireland, being tax to which this Agreement applies by virtue of Article 2;

(j) the term ‘competent authority’ means:

(i) in the case of Australia, the Commissioner of Taxation or his authorised representative;

(ii) in the case of Ireland, the Revenue Commissioners or their authorised representative.

(2) In this Agreement, the terms ‘Australian tax’ and ‘Irish tax’ do not include any penalty or interest imposed under the law of either Contracting State relating to the taxes to which this Agreement applies by virtue of Article 2.

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

SCHEDULE 2—continued

ARTICLE 4

Residence

(1) For the purposes of this Agreement, a person is a resident of one of the Contracting States—

(a) in the case of Australia, subject to the provisions of paragraph (2) of this Article, if the person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Ireland, if the person is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature but not if he is liable to tax in Ireland in respect only of income for sources therein.

(2) In relation to income from sources in Ireland a person who is subject to Australian tax on income which is from sources in Australia shall not be treated as a resident of Australia unless the income from sources in Ireland is subject to Australian tax or, if that income is exempt from Australian tax, it is so exempt solely because it is subject to Irish tax.

(3) Where by reason of the preceding provisions of this Article an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident solely of the Contracting State in which he has a permanent home available to him;

(b) if he has a permanent home available to him in both Contracting States, or if he does not have a permanent home available to him in either of them, he shall be deemed to be a resident solely of the Contracting State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States, or if he does not have an habitual abode in either of them, he shall be deemed to be a resident solely of the Contracting State with which his personal and economic relations are the closer.

(4) Where by reason of the provisions of paragraph (1) of this Article, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term ‘permanent establishment’ shall include especially—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;

(g) an agricultural, pastoral or forestry property;

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

(i) an installation or structure used for the exploration of natural resources.

(3) An enterprise shall not be deemed to have a permanent establishment merely by reason of—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

SCHEDULE 2—continued

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

(4) An enterprise shall be deemed to have a permanent establishment in one of the Contracting States and to carry on business through that permanent establishment if—

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

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

(c) it carries on activities in that State in connection with the exploration or exploitation of the sea-bed, subsoil or their natural resources in that State.

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

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

(b) in so acting, he manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise, provided that this provision shall apply only in relation to the goods or merchandise so manufactured or processed.

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

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

(8) The principles set forth in paragraphs (1) to (7) of this Article shall be applied in determining for the purposes of paragraph (5) of Article 12 and paragraph (5) of Article 13 whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.

ARTICLE 6

Limitation of Relief

Where under any provision of this Agreement income is relieved from tax in one of the Contracting States and, under the law in force in the other Contracting State—

(a) the income or a part thereof is exempt from tax; or

(b) a person, in respect of the said income, is subject to tax by reference to the amount thereof which is remitted to or received in that other State, and not by reference to the full amount thereof, then the relief to be allowed under this Agreement in the first-mentioned State shall apply—

(d) where (b) above applies, only to so much of the income as is remitted to or received in the other State.

ARTICLE 7

Income from Real Property

(1) Income from real property may be taxed in the Contracting State in which the real property is situated.

SCHEDULE 2—continued

(2) In this Article, the term ‘real property’—

(a) in the case of Australia, has the meaning which it has under the laws of Australia, and shall also include—

(i) a lease of land and any other interest in or over land, whether improved or not;

(ii) a right to receive variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil or gas wells, quarries or other places of extraction or exploitation of natural resources; and

(b) in the case of Ireland, means immovable property according to the laws of Ireland, and shall also include—

(i) property accessory to immovable property;

(ii) rights to which the provisions of the general law respecting landed property apply;

(iii) usufruct of immovable property; and

(iv) a right to receive variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil or gas wells, quarries or other places of extraction or exploitation of natural resources.

Ships, boats and aircraft shall not be regarded as real property.

(3) The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, letting or use in any other form of real property.

(4) A lease of land, any other interest in or over land and any right referred to in any of the subparagraphs of paragraph (2) of this Article shall be regarded as situated where the land, mineral deposits, oil or gas wells, quarries or natural resources as the case may be, are situated.

(5) The provisions of paragraphs (1), (3) and (4) of this Article shall also apply to income from real property of an enterprise and to income from real property used for the performance of professional services.

ARTICLE 8

Business Profits

(1) The profits of an enterprise of one of the Contracting States shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State, but only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3) of this Article, where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment or with other enterprises with which it deals.

(3) In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses of the enterprise, being expenses which are incurred for the purposes of the permanent establishment (including executive and general administrative expenses so incurred) and which would be deductible if the permanent establishment were an independent entity which paid those expenses, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.

(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

(5) If the information available to the competent authority of a Contracting State is inadequate to determine the profits to be attributed to the permanent establishment of an enterprise, nothing in this Article shall affect the application of any law of that State relating to the determination of the tax liability of a person provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles of this Article.

SCHEDULE 2—continued

(6) Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

(7) Nothing in this Article shall apply to either Contracting State to prevent the operation in the Contracting State of any provision of its law relating specifically to the taxation of any person who carries on a business of any form of insurance.

ARTICLE 9

Shipping and Air Transport

(1) Profits from the operation of ships or aircraft derived by a resident of one of the Contracting States shall be taxable only in that State.

(2) Notwithstanding the provisions of paragraph (1) of this Article, such profits may be taxed in the other Contracting State where they are profits from operations of ships or aircraft confined solely to places in that other State.

(3) The provisions of paragraphs (1) and (2) of this Article shall apply in relation to the share of the profits from the operation of ships or aircraft derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organization or in an international operating agency.

(4) For the purposes of this Article, profits derived from the carriage by ships or aircraft of passengers, livestock, mail, goods or merchandise shipped in a Contracting State for discharge at another place in that State shall be treated as profits from operations of ships or aircraft confined solely to places in that State.

ARTICLE 10

Associated Enterprises

(1) Where—

(a) an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and an enterprise of the other Contracting State,

(2) If the information available to the competent authority of a Contracting State is inadequate to determine the profits to be attributed to an enterprise, nothing in this Article shall affect the application of any law of that State relating to the determination of the tax liability of a person, provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles of this Article.

(3) Notwithstanding the provisions of this Article, an enterprise of one of the Contracting States may be taxed by that Contracting State as if this Article had not entered into force and had not had effect but, so far as it is practicable to do so, in accordance with the principles of this Article.

(4) Where profits on which an enterprise of one of the Contracting States has been charged to tax in that State are also included, by virtue of paragraphs (1), (2) or (3) of this Article, in the profits of an enterprise of the other Contracting State and taxed accordingly, and the profits so included are profits which might have been expected to have accrued to that enterprise of the other State if the conditions operative between the enterprises had been those which might have been expected to have operated between independent enterprises dealing wholly independently with one another, then the first-mentioned State shall make an appropriate adjustment to the amount of tax charged on those profits in the first-mentioned State. In determining such an adjustment, due regard shall be had to the other provisions of this Agreement and for this purpose the competent authorities of the Contracting States shall if necessary consult each other.

SCHEDULE 2—continued

(5) The provisions of paragraph (4) of this Article relating to an appropriate adjustment are not applicable after the expiration of six years from the end of the year of assessment or financial year, as the case may be, in respect of which a Contracting State has charged to tax the profits to which the adjustment would relate.

ARTICLE 11

Dividends

(1) Dividends paid by a company which is a resident of Australia for the purposes of Australian tax, being dividends to which a resident of Ireland is beneficially entitled, may be taxed in Ireland. Such dividends may also be taxed in Australia, according to the law of Australia, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.

(2) (a) Dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, may be taxed in Australia.

(b) Where a resident of Australia is entitled to a tax credit in respect of a dividend under paragraph (3) of this Article, tax may also be charged in Ireland and according to the laws of Ireland on the aggregate of the amount or value of that dividend and the amount of that tax credit at a rate not exceeding 15 per cent.

(c) Except as aforesaid, dividends paid by a company which is a resident of Ireland for the purposes of Irish tax, being dividends to which a resident of Australia is beneficially entitled, shall be exempt from any tax in Ireland which is chargeable on dividends.

(3) A resident of Australia who receives dividends from a company which is a resident of Ireland shall, subject to the provisions of paragraph (4) of this Article and provided he is the beneficial owner of the dividends, be entitled to the tax credit in respect thereof to which an individual resident in Ireland would have been entitled had he received those dividends, and to the payment of any excess of that tax credit over his liability to Irish tax. Any such credit shall be treated for the purposes of Australian tax as assessable income from sources in Ireland.

(4) The provisions of paragraph (3) of this Article shall not apply where the beneficial owner of the dividends (being a company) is, or is associated with, a company which either alone or together with one or more associated companies controls directly or indirectly 10 per cent or more of the voting power in the company paying the dividends. For the purposes of this paragraph two companies shall be deemed to be associated if one controls directly or indirectly more than 50 per cent of the voting power in the other company, or a third company controls more than 50 per cent of the voting power in both of them.

(5) The term ‘dividends’ in this Article means income from shares and includes any income or distribution assimilated to income from shares under the taxation law of the Contracting State of which the company paying the dividends or income or making the distribution is a resident.

(6) Where the company paying a dividend is a resident of one of the Contracting States and the beneficial owner of the dividend, being a resident of the other Contracting State, owns 10 per cent or more of the class of shares in respect of which the dividend is paid, paragraphs (2) and (3) of this Article shall not apply to the dividend to the extent that it can have been paid only out of profits which the company paying the dividend earned or other income which it received in a period ending 12 months or more before the relevant date. For the purposes of this paragraph the term ‘relevant date’ means the date on which the beneficial owner of the dividend became the owner of 10 per cent or more of the class of shares in question: provided that this paragraph shall not apply if the shares were acquired for bona fide commercial reasons and not primarily for the purpose of securing the benefit of this Article.

(7) The provisions of paragraphs (1), (2) and (3) of this Article shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.

SCHEDULE 2—continued

(8) Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State: provided that this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Ireland for the purposes of Irish tax.

ARTICLE 12

Interest

(1) Interest arising in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such interest may be taxed in the Contracting State in which it arises, and according to the law of that State, but the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

(3) The term ‘interest’ in this Article includes interest from Government securities or from bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and interest from any other form of indebtedness as well as all other income assimilated to income from money lent by the taxation law of the Contracting State in which the income arises but does not include any income which is treated as a dividend under Article 11.

(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if the person beneficially entitled to the interest, being a resident of one of the Contracting States, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the indebtedness in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.

(5) Interest shall be deemed to arise in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State or outside both Contracting States a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(6) Where, owing to a special relationship between the payer and the person beneficially entitled to the interest or between both of them and some other person, the amount of the interest paid, having regard to the indebtedness for which it is paid, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the interest paid shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Agreement.

(7) The provisions of this Article shall not apply if the indebtedness in respect of which the interest is paid was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.

ARTICLE 13

Royalties

(1) Royalties arising in one of the Contracting States, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such royalties may be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.

(3) The term ‘royalties’ in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for—

(a) the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right;

SCHEDULE 2—continued

(b) the use of, or the right to use, any industrial, commercial or scientific equipment;

(d) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in subparagraph (a), any such equipment as is mentioned in subparagraph (b) or any such knowledge or information as is mentioned in subparagraph (c);

(e) the use of, or the right to use—

(i) motion picture films;

(ii) films or video tapes for use in connection with television; or

(iii) tapes for use in connection with radio broadcasting; or

(f) total or partial forbearance in respect of the use of a property or right referred to in this paragraph.

(4) The provisions of paragraphs (1) and (2) of this Article shall not apply if the person beneficially entitled to the royalties, being a resident of one of the Contracting States, carries on business in the other Contracting State, in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid or credited is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State or outside both Contracting States a permanent establishment or fixed base in connection with which the liability to pay the royalties was incurred, and the royalties are borne by the permanent establishment or fixed base, then the royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(6) Where, owing to a special relationship between the payer and the person beneficially entitled to the royalties or between both of them and some other person, the amount of the royalties paid or credited, having regard to what they are paid or credited for, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the royalties paid or credited shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Agreement.

(7) The provisions of this Article shall not apply if the right or property in respect of which the royalties were paid or credited was created or assigned mainly for the purpose of taking advantage of this Article and not for bona fide commercial reasons.

ARTICLE 14

Alienation of Property

(1) Income or gains from the alienation of real property may be taxed in the Contracting State in which that property is situated.

(2) For the purposes of this Article—

(a) the term ‘gains’ means, in the case of Ireland, chargeable gains as defined in the taxation law of Ireland;

(b) the term ‘real property’ shall include—

(i) a lease of land or any other interest in or over land;

(ii) rights to exploit, or to explore for, natural resources;

(iii) shares or comparable interests in a company the assets of which consist wholly or principally of interests in or over land in one of the Contracting States or of rights to exploit, or to explore for, natural resources in one of the Contracting States;

SCHEDULE 2—continued

(iv) any partnership interest, or any interest in settled property deriving its value or the greater part of its value directly or indirectly from interests in or over land in one of the Contracting States or rights to exploit, or to explore for, natural resources in one of the Contracting States; and

(v) any option, consent or embargo affecting the disposition of interests in or over land in one of the Contracting States or rights to exploit, or to explore for, natural resources in one of the Contracting States; and

(i) where it consists of interests in or over land—in the Contracting State in which the land is situated;

(ii) where it consists of rights to exploit, or to explore for, natural resources—in the Contracting State in which the natural resources are situated or the exploration may take place; and

(iii) where it consists of shares or comparable interests in a company referred to in clause (iii) of subparagraph (b) of this paragraph, a partnership interest or an interest in settled property referred to in clause (iv) of the said subparagraph, or an option, consent or embargo referred to in clause (v) of the said subparagraph—in the Contracting State in which the land or natural resources are wholly or principally situated or the exploration may take place.

(3) Subject to the provisions of paragraph (1) of this Article, income or gains from the alienation of capital assets of an enterprise of one of the Contracting States or of capital assets available to a resident of one of the Contracting States for the purpose of performing professional services or other independent activities shall be taxable only in that State, but, where those assets form the whole or part of the business property of a permanent establishment or fixed base situated in the other Contracting State, such income or gains may be taxed in that other State.

(4) Income or gains derived by an enterprise of one of the Contracting States from the alienation of ships or aircraft operated in international traffic while owned by that enterprise shall be taxable only in that State.

ARTICLE 15

Independent Personal Services

(1) Income derived by an individual who is a resident of one of the Contracting States in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to activities exercised from that fixed base.

(2) The term ‘professional services’ includes services performed in the exercise of independent scientific, literary, artistic, educational or teaching activities as well as in the exercise of the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 16

Dependent Personal Services

(1) Subject to the provisions of Articles 17, 19, 20 and 21, salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1) of this Article, remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if—

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

SCHEDULE 2—continued

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

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State.

ARTICLE 17

Directors’ Fees

Directors’ fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 18

Entertainers

(1) Notwithstanding the provisions of Articles 15 and 16, income derived by entertainers (such as theatrical, motion picture, radio or television artistes, musicians and athletes) from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

(2) Where income in respect of the personal activities of an entertainer as such accrues not to that entertainer but to another person, that income may, notwithstanding the provisions of Articles 8, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer are exercised.

ARTICLE 19

Pensions and Annuities

(1) Pensions (including government pensions) and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

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

(3) Any alimony or other maintenance payment arising in one of the Contracting States and paid to a resident of the other Contracting State shall be taxable only in the first-mentioned State.

ARTICLE 20

Government Service

(1) Remuneration (other than a pension or annuity) paid by one of the Contracting States or a political subdivision or local authority of that State to any individual in respect of services rendered in the discharge of governmental functions shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the recipient is a resident of that other State who:

(a) is a citizen of that State; or

(b) did not become a resident of that State solely for the purpose of rendering the services.

(2) The provisions of paragraph (1) of this Article shall not apply to remuneration in respect of services rendered in connection with any trade or business carried on by one of the Contracting States or a political subdivision or local authority of that State. In such a case, the provisions of Article 16 or Article 17, as the case may be, shall apply.

SCHEDULE 2—continued

ARTICLE 21

Professors and Teachers

(1) Remuneration which a professor or teacher who is a resident of one of the Contracting States and who visits the other Contracting State for a period not exceeding two years for the purpose of teaching or carrying out advanced study or research at a university, college, school or other educational institution, receives for those activities shall be taxable only in the first-mentioned State.

(2) This Article shall not apply to remuneration which a professor or teacher receives for conducting research if the research is undertaken primarily for the private benefit of a specific person or persons.

ARTICLE 22

Students

Where a student, who is a resident of one of the Contracting States or who was a resident of that State immediately before visiting the other Contracting State and who is temporarily present in that other State solely for the purpose of his education, receives payments from sources outside that other State for the purpose of his maintenance or education, those payments shall be exempt from tax in that other State.

ARTICLE 23

Income Not Expressly Mentioned

(1) Items of income of a resident of one of the Contracting States which are not expressly mentioned in the foregoing Articles of this Agreement shall be taxable only in that Contracting State.

(2) However, if such income is derived by a resident of one of the Contracting States from sources in the other Contracting State, such income may also be taxed in the Contracting State in which it arises.

(3) The provisions of paragraph (1) of this Article shall not apply to income derived by a resident of one of the Contracting States where that income is effectively connected with a permanent establishment or fixed base situated in the other Contracting State. In such a case, the provisions of Article 8 or Article 15, as the case may be, shall apply.

ARTICLE 24

Source of Income

(1) Income or gains derived by a resident of one of the Contracting States which, under any one or more of Articles 7 to 9, 11 to 19 and Article 23 may be taxed in the other Contracting State, shall for the purposes of the taxation law of the other Contracting State be deemed to be income or gains from sources in the other Contracting State.

(2) Income or gains derived by a resident of one of the Contracting States which, under any one or more of Articles 7 to 9, 11 to 19 and Article 23 may be taxed in the other Contracting State, shall for the purposes of Article 25 and of the taxation law of the first-mentioned Contracting State be deemed to be income or gains from sources in the other Contracting State.

ARTICLE 25

Methods of Elimination of Double Taxation

(1) (a)Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Irish tax paid under the law of Ireland and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Ireland (not including, in the case of a dividend, tax paid in respect of the profits out of which the dividend is paid) shall be allowed as a credit against Australian tax payable in respect of that income;

(b) in the event that Australia should cease to allow a company which is a resident of Australia a rebate in its assessment at the average rate of tax payable by the company in respect of dividends derived from sources in Ireland and included in the taxable income of the

SCHEDULE 2—continued

company, the Governments of the Contracting States will enter into negotiations in order to establish new provisions concerning the credit to be allowed by Australia against its tax on the dividends.

(2) Subject to the provisions of the law of Ireland regarding the allowance as a credit against Irish tax of tax payable in a territory outside Ireland (which shall not affect the general principle hereof):

(a) Australian tax payable under the law of Australia and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable gains from sources within Australia (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Irish tax computed by reference to the same profits, income or chargeable gains by reference to which Australian tax is computed;

(b) in the case of a dividend paid by a company which is a resident of Australia to a company which is a resident of Ireland and which controls directly or indirectly 10 per cent or more of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Australian tax creditable under the provisions of subparagraph (a) of this paragraph) the Australian tax payable by the company in respect of the profits out of which such dividend is paid.

ARTICLE 26

Mutual Agreement Procedure

(1) Where a resident of one of the Contracting States considers that the actions of the competent authority of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action giving rise to taxation not in accordance with this Agreement.

(2) The competent authority shall endeavour, if the claim appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Agreement. Notwithstanding any time limits in the national laws of the Contracting States, the solution so reached may be implemented within a period of seven years from the date of presentation of the case by the resident to the relevant competent authority in accordance with paragraph (1) of this Article.

(3) The competent authorities of the Contracting States shall jointly endeavour to resolve any difficulties or doubts arising as to the application of this Agreement.

(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of this Agreement.

ARTICLE 27

Exchange of Information

(1) The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Agreement or of the domestic laws of the Contracting States concerning the taxes to which this Agreement applies insofar as the taxation thereunder is not contrary to this Agreement. The exchange of information is not restricted by Article 1. Any information received by the competent authority of a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes to which this Agreement applies and shall be used only for such purposes.

(2) In no case shall the provisions of paragraph (1) of this Article be construed so as to impose on a Contracting State the obligation—

(a) to carry out administrative measures at variance with the laws or the administative practice of that or of the other Contracting State;

(b) to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

SCHEDULE 2—continued

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or to supply information the disclosure of which would be contrary to public policy.

ARTICLE 28

Diplomatic and Consular Officials

Nothing in this Agreement shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special international agreements.

ARTICLE 29

Entry into Force

This Agreement shall enter into force on the date on which the Government of Australia and the Government of Ireland exchange notes through the diplomatic channel notifying each other that the last of such things has been done as is necessary to give this Agreement the force of law in Australia and in Ireland, as the case may be, and thereupon this Agreement shall have effect—

(a) in Australia—

(i) with respect to withholding tax on income that is derived by a non-resident, in relation to income derived on or after 1 July in the calendar year immediately following that in which the Agreement enters into force;

(ii) with respect to other Australian tax, in relation to income of any year of income beginning on or after 1 July in the calendar year immediately following that in which the Agreement enters into force;

(b) in Ireland—

(i) with respect to income tax and capital gains tax, for any year of assessment beginning on or after 6 April in the calendar year immediately following that in which the Agreement enters into force;

(ii) with respect to corporation tax, for any financial year beginning on or after 1 January in the calendar year immediately following that in which the Agreement enters into force.

ARTICLE 30

Termination

This Agreement shall continue in effect indefinitely, but the Government of Australia or the Government of Ireland may, on or before 30 June in any calendar year beginning after the expiration of five years from the date of its entry into force, give to the other Government through the diplomatic channel written notice of termination and, in that event, this Agreement shall cease to be effective—

(a) in Australia—

(ii) with respect to other Australian tax, in relation to income of any year of income beginning on or after 1 July in the calendar year immediately following that in which the notice of termination is given;

(b) in Ireland—

(i) with respect to income tax and capital gains tax, for any year of assessment beginning on or after 6 April in the calendar year immediately following that in which the notice of termination is given;

(ii) with respect to corporation tax, for any financial year beginning on or after 1 January in the calendar year immediately following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Agreement and affixed thereto their seals.

SCHEDULE 2—continued

DONE in duplicate at Canberra this thirty-first day of May One thousand nine hundred and eighty-three in the English language.

J. S. DAWKINS JOSEPH SMALL

FOR THE GOVERNMENT FOR THE GOVERNMENT

OF AUSTRALIA OF IRELAND

——————

“SCHEDULE 21

Section 3

CONVENTION

BETWEEN

AUSTRALIA

AND

THE REPUBLIC OF ITALY

FOR

THE AVOIDANCE OF DOUBLE TAXATION

AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Australia and the Government of the Republic of Italy,

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

Have agreed as follows:

CHAPTER 1

SCOPE OF THE CONVENTION

ARTICLE 1

Personal Scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2

Taxes Covered

(1) This Convention shall apply only to taxes on income imposed on behalf of each Contracting State irrespective of the manner in which they are levied.

(2) The existing taxes to which this Convention shall apply are—

(a) in the case of Australia:

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

(b) in the case of Italy:

(i) the individual income tax (l’imposta sul reddito delle persone fisiche);

(ii) the corporate income tax (l’imposta sul reddito delle persone giuridiche);

even if they are collected by withholding taxes at the source.

(3) The Convention shall apply to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify to each other any significant changes which have been made in their laws relating to the taxes to which this Convention applies.

SCHEDULE 2—continued

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

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

(a) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes—

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Coral Sea Islands Territory; and

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

(b) the term ‘Italy’ means the Republic of Italy and includes any area beyond the territorial waters of Italy which, in accordance with the laws of Italy concerning the exploration for and exploitation of natural resources, may be designated as an area within which the rights of Italy with respect to the sea-bed and subsoil and natural resources may be exercised;

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

(d) the term ‘person’ comprises an individual, a company and any other body of persons;

(e) the term ‘company’ means any body corporate or any entity which is treated as a company or body corporate for tax purposes;

(g) the term ‘tax’ means Australian tax or Italian tax, as the context requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to which this Convention applies by virtue of Article 2;

(i) the term ‘Italian tax’ means tax imposed by Italy, being tax to which this Convention applies by virtue of Article 2;

(j) the term ‘competent authority’ means, in the case of Australia, the Commissioner of Taxation or his authorized representative, and in the case of Italy, the Ministry of Finance.

(2) In this Convention, the terms ‘Australian tax’ and ‘Italian tax’ do not include any penalty or interest imposed under the law of either Contracting State relating to the taxes to which this Convention applies by virtue of Article 2.

(3) In the application of this Convention by a Contracting State, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes to which this Convention applies.

ARTICLE 4

Residence

(1) For the purposes of this Convention, a person is a resident of one of the Contracting States—

(a) in the case of Australia, subject to paragraph (2), if the person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Italy, if the person is a resident of Italy for the purposes of Italian tax.

(2) In relation to income from sources in Italy, a person who is subject to Australian tax on income which is from sources in Australia shall not be treated as a resident of Australia unless the income from

SCHEDULE 2—continued

sources in Italy is subject to Australian tax or, if that income is exempt from Australian tax, it is so exempt solely because it is subject to Italian tax.

(3) Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident solely of the Contracting State in which he has a permanent home available to him;

(4) Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

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

(2) The term ‘permanent establishment’ shall include especially—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

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

(g) an agricultural, pastoral or forestry property;

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

(3) The term ‘permanent establishment’ shall not be deemed to include—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

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

(4) An enterprise shall be deemed to have a permanent-establishment in one of the Contracting States and to carry on business through that permanent establishment if—

(b) substantial equipment is being used in that State for more than twelve months by, for or under contract with the enterprise in exploration for, or the exploitation of, natural resources, or in activities connected with such exploration or exploitation.

(5) A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State—other than an agent of an independent status to whom paragraph (6)

SCHEDULE 2—continued

applies—shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if—

(b) in so acting, he manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise provided that this provision shall apply only in relation to the goods or merchandise so manufactured or processed.

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

(8) The principles set forth in paragraphs (1) to (7) inclusive shall be applied in determining for the purposes of this Convention whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6

Income from Real Property

(1) Income from real property may be taxed in the Contracting State in which such property is situated.

(2) The term ‘real property’ (beni immobili) shall have the meaning which it has under the laws in force in the Contracting State in which the property in question is situated. The term shall in any case include rights to royalties and other payments in respect of the operation of mines or quarries or of the exploitation of any natural resource and those rights shall be regarded as situated where the land is situated. Ships, boats or aircraft shall not be regarded as real property.

(3) The provisions of paragraph (1) shall apply to income derived from the direct use, letting, or use in any other form of real property.

(4) Income from a lease of land and income from any other direct interest in or over land, whether or not improved, shall be regarded as income from real property situated where the land is situated.

(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the income from real property of an enterprise and to income from real property used for the performance of independent personal services.

ARTICLE 7

Business Profits

SCHEDULE 2—continued

activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment or with other enterprises with which it deals.

(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

(5) Nothing in this Article shall affect the operation of any law of a Contracting State relating to taxation of profits from insurance with non-residents provided that if the relevant law in force in either State at the date of signature of this Convention is varied (otherwise than in minor respects so as not to affect its general character) the Contracting States shall consult with each other with a view to agreeing to any amendment of this paragraph that may be appropriate.

(6) For the purposes of this Article, the profits of an enterprise do not include items of income which are dealt with separately in other Articles of this Convention and the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

Shipping and Aircraft

(1) Where profits are derived by a resident of one of the Contracting States from the operation of ships and the place of the effective management of the shipping enterprise is situated in that State, those profits shall be taxable only in that State.

(2) Notwithstanding the provisions of paragraph (1), such profits may be taxed in the other Contracting State where they are profits from operations of ships confined solely to places in that other State.

(3) The provisions of paragraphs (1) and (2) shall apply in relation to the share of the profits from the operation of ships derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organization or in an international operating agency.

(4) For the purpose of this Article, profits derived from the carriage by ships of passengers, livestock, mail, goods or merchandise shipped in one of the Contracting States for discharge at another place in that State shall be treated as profits from operations of ships confined solely to places in that State.

(5) If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

(6) Nothing in this Convention shall affect the operation of the Agreement between the Governments of the Contracting States for the avoidance of double taxation of income derived from international air transport signed at Canberra on 13 April 1972.

ARTICLE 9

Associated Enterprises

Where—

(a) an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and an enterprise of the other Contracting State,

SCHEDULE 2—continued

ARTICLE 10

Dividends

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case the dividends are taxable in that other Contracting State according to its own law.

(5) Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State. Provided that this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Italy for the purposes of Italian tax.

ARTICLE 11

Interest

(1) Interest arising in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(3) Notwithstanding the provisions of paragraph (2), interest derived by the Government of one of the Contracting States or by a political or administrative sub-division or a local authority thereof or by any other body exercising public functions in, or in a part of, a Contracting State, or by a bank performing central banking functions in a Contracting State, shall be exempt from tax in the other Contracting State.

(4) The term ‘interest’ in this Article includes interest from Government securities or from bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and interest from any other form of indebtedness as well as all other income assimilated to income from money lent by the taxation law of the Contracting State in which the income arises.

(5) The provisions of paragraphs (I) and (2) shall not apply if the person beneficially entitled to the interest, being a resident of one of the Contracting States, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the indebtedness in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the interest is taxable in that other Contracting State according to its own law.

(6) Interest shall be deemed to arise in one of the Contracting States when the payer is that State itself or a political or administrative sub-division of that State or a local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the interest, whether he is a resident of one of the Contracting States or not, has in one of the Contracting

SCHEDULE 2—continued

States or outside both Contracting States a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(7) Where, owing to a special relationship between the payer and the person beneficially entitled to the interest, or between both of them and some other person, the amount of the interest paid, having regard to the indebtedness for which it is paid, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the interest paid shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE 12

Royalties

(1) Royalties arising in one of the Contracting States, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(3) The term ‘royalties’ in this Article means payments, whether periodical or not, and however described or computed, to the extent to which they are paid as consideration for the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trade-mark, or other like property or right, or industrial, commercial or scientific equipment, or for the supply of scientific, technical, industrial or commercial knowledge or information, or for the supply of any assistance of an ancillary and subsidiary nature furnished as a means of enabling the application or enjoyment of such knowledge or information or any other property or right to which this Article applies, and includes any payments to the extent to which they are paid as consideration for the use of, or the right to use, motion picture films, films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting.

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the royalties, being a resident of one of the Contracting States, carries on business in the other Contracting State, in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the royalties are taxable in that other Contracting State according to its own law.

(5) Royalties shall be deemed to arise in one of the Contracting States when the payer is that Contracting State itself or a political or administrative sub-division of that State or a local authority of that State or a person who is a resident of that State for purposes of its tax. Where, however, the person paying the royalties, whether he is a resident of one of the Contracting States or not, has in one of the Contracting States or outside both Contracting States a permanent establishment or fixed base in connection with which the liability to pay the royalties was incurred, and the royalties are borne by the permanent establishment or fixed base, then the royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(6) Where, owing to a special relationship between the payer and the person beneficially entitled to the royalties or between both of them and some other person the amount of the royalties paid, having regard to what they are paid for, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the royalties paid shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

SCHEDULE 2—continued

ARTICLE 13

Alienation of Property

(1) Income from the alienation of real property may be taxed in the Contracting State in which that property is situated.

(2) For the purposes of this Article—

(a) the term ‘real property’ shall include—

(i) a lease of land or any other direct interest in or over land;

(ii) rights to exploit, or to explore for, natural resources; and

(iii) shares or comparable interest in a company, the assets of which consist wholly or principally of direct interests in or over land in one of the Contracting States or of rights to exploit, or to explore for, natural resources in one of the Contracting States.

(b) real property shall be deemed to be situated—

(i) where it consists of direct interests in or over land—in the Contracting State in which the land is situated;

(ii) where it consists of rights to exploit, or to explore for, natural resources—in the Contracting State in which the natural resources are situated or the exploration may take place; and

(iii) where it consists of shares or comparable interests in a company, the assets of which consist wholly or principally of direct interests in or over land in one of the Contracting States or of rights to exploit, or to explore for, natural resources in one of the Contracting States—in the Contracting State in which the assets or the principal assets of the company are situated.

(3) Gains from the alienation of shares or corporate rights in a company which is a resident of Italy for the purposes of Italian tax, derived by an individual who is a resident of Australia, may be taxed in Italy.

ARTICLE 14

Independent Personal Services

(2) The term ‘professional services’ includes especially services performed in the exercise of independent scientific, literary, artistic, educational or teaching activities as well as in the exercise of the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15

Dependent Personal Services

(1) Subject to the provisions of Articles 16, 18, 19 and 20 salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if—

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

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

SCHEDULE 2—continued

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State.

(3) Notwithstanding the preceding provisions of this Article remuneration derived by a resident of one of the Contracting States in respect of an employment exercised aboard a ship or aircraft in international traffic shall be taxable only in that Contracting State.

ARTICLE 16

Directors’ Fees

ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 and 15, income derived by entertainers (such as theatrical, motion picture, radio or television artistes and musicians and athletes) from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

(2) Where income in respect of the personal activities of an entertainer as such accrues not to that entertainer but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer are exercised.

ARTICLE 18

Pensions and Annuities

(1) Pensions (including government pensions) and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

(3) Any alimony or other maintenance payment arising in a Contracting State and paid to a resident of the other Contracting State, shall be taxable only in the first-mentioned State.

ARTICLE 19

Government Service

(1) Remuneration (other than a pension or annuity) paid by one of the Contracting States or by a political or administrative sub-division of that State or by a local authority of that State to any individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the recipient is a resident of that State who:

(a) is a citizen or national of that State; or

(b) did not become a resident of that State solely for the purpose of performing the services.

(2) The provisions of paragraph (1) shall not apply to remuneration in respect of services rendered in connection with any trade or business carried on by one of the Contracting States or by a political or administrative sub-division of one of the States or by a local authority of one of the States. In such a case the provisions of Articles 15 and 16 shall apply.

ARTICLE 20

Professors and Teachers

A professor or teacher who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or carrying out advanced study or research at a university, college, school or other educational institution in that State and who immediately before that visit was a resident of the

SCHEDULE 2—continued

other Contracting State shall be exempt from tax in the first-mentioned State on any remuneration for such teaching, advanced study or research in respect of which he is, or upon the application of this Article will be, subject to tax in the other State.

ARTICLE 21

Students

Where a student, who is a resident of one of the Contracting States or who was a resident of that State immediately before visiting the other Contracting State and who is temporarily present in the other State solely for the purpose of his education, receives payments from sources outside the other State for the purpose of his maintenance or education, those payments shall be exempt from tax in the other State.

ARTICLE 22

Income of Dual Resident

Where a person, who by reason of the provisions of paragraph (1) of Article 4 is a resident of both Contracting States but by reason of the provisions of paragraph (3) or (4) of that Article is deemed for the purposes of this Convention to be a resident solely of one of the Contracting States, derives income from sources in that Contracting State or from sources outside both Contracting States, that income shall be taxable only in that Contracting State.

ARTICLE 23

Source of Income

Income derived by a resident of one of the Contracting States which, under any one or more of Articles 6 to 8 and 10 to 17 may be taxed in the other Contracting State, shall for the purposes of Article 24, and of the income tax law of that other State, be deemed to be income from sources in that other State.

CHAPTER IV

METHODS OF ELIMINATION OF DOUBLE TAXATION

ARTICLE 24

(2) If a resident of Italy owns items of income which are taxable in Australia, Italy in determining its income taxes specified in Article 2 of this Convention, may include in the basis upon which such taxes are imposed the said items of income, unless specific provisions of this Convention otherwise provide. In such a case, Italy shall deduct from the taxes so calculated the Australian tax on income, but in an amount not exceeding that proportion of the aforesaid Italian tax which such items of income bear to the entire income. On the contrary no deduction will be granted if the item of income is subjected in Italy to a final withholding tax by request of the recipient of the said income in accordance with the Italian law.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 25

Mutual Agreement Procedure

(1) Where a resident of one of the Contracting States considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he

SCHEDULE 2—continued

may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within two years from the first notification of the action.

(2) The competent authority shall endeavour, if the taxpayer’s claim appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Convention.

(3) The competent authorities of the Contracting States shall endeavour to resolve any difficulties or doubts arising as to the application of this Convention.

(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of this Convention.

ARTICLE 26

Exchange of Information

(1) The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Convention or of the domestic laws of the Contracting States concerning taxes to which this Convention applies insofar as the taxation thereunder is not contrary to this Convention, or for the prevention of fiscal evasion in relation to such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes to which this Convention applies. Such persons or authorities shall use the information only for such purposes.

(2) In no case shall the provisions of paragraph (1) be construed so as to impose on one of the Contracting States the obligation—

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b) to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or to supply information, the disclosure of which would be contrary to public policy (ordre public).

ARTICLE 27

Diplomatic and Consular Officials

Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

ARTICLE 28

Refunds

(1) Taxes withheld at the source in one of the Contracting States will be refunded by request of the taxpayer or of the State of which he is a resident if the right to collect the said taxes is affected by the provisions of this Convention.

(2) Claims for refund, that shall be produced within the time limit fixed by the law of the Contracting State which is obliged to carry out the refund, shall be accompanied by an official certificate of the Contracting State of which the taxpayer is a resident certifying the existence of the conditions required for being entitled to the application of the allowances provided for by this Convention.

(3) The competent authorities of the Contracting States shall settle the mode of application of this Article, in accordance with the provisions of Article 25 of this Convention.

SCHEDULE 2—continued

CHAPTER VI

FINAL PROVISIONS

ARTICLE 29

Entry Into Force

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

(2) The Convention shall enter into force on the date of the exchange of instruments of ratification and its provisions shall have effect—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in respect of income derived on or after 1 July 1976;

(ii) in respect of other Australian tax, for any year of income beginning on or after 1 July 1976;

(b) In Italy—

in respect of income assessable for taxable periods beginning on or after 1 July 1976.

(3) Claims for refund or credits arising in accordance with this Convention in respect of any tax payable by residents of either of the Contracting States in respect of income which is subject to tax and to which this Convention applies in accordance with paragraph (2) of this Article and which was derived before the entry into force of this Convention, shall be lodged within three years from the date of entry into force of this Convention or from the date the tax was charged whichever is later.

ARTICLE 30

Termination

This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Convention, through the diplomatic channel, not earlier than five years after its entry into force by giving notice of termination at least six months before the end of the calendar year. In such event, the Convention shall cease to be effective—

(a) in Australia—

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

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

(b) in Italy—

in respect of income assessable for taxable periods beginning on or after 1 July in the calendar year next following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed the present Convention.

Done in duplicate at Canberra the fourteenth day of December 1982 in the English and Italian languages, both texts being equally authoritative.

JOHN HOWARD SERGIO ANGELETTI

For the Government For the Government of the

of Australia Republic of Italy

PROTOCOL

The Government of Australia and

The Government of the Republic of Italy,

at the signing of the Convention between the two Governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed upon the following provisions which shall form an integral part of the Convention:

SCHEDULE 2—continued

It is understood that:

(1) With reference to Articles 7 and 9—

If the information available to the competent authority of one of the Contracting States is inadequate to determine the profits of an enterprise on which tax may be imposed in that State in accordance with Article 7 or Article 9 of the Convention, nothing in those Articles shall prevent the application of any law of that State relating to the determination of the tax liability of a person provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles applicable under Articles 7 and 9.

(2) With reference to paragraph (6) of Article 8—

The Italian taxes to which the Agreement therein referred to shall apply, with effect from the date of their entry into force, are the following—

(i) the individual income tax (l’imposta sul reddito delle persone fisiche);

(ii) the corporate income tax (l’imposta sul reddito delle persone giuridiche);

(iii) the local income tax (l’imposta locale sui redditi).

If, in Australia, a tax (not being Australian tax referred to in Article 1 of the said Agreement) is imposed on profits derived by an enterprise of Italy from the operation of aircraft in international traffic, the taxes to which the Agreement shall apply in Italy shall thereupon cease to include the local income tax (l’imposta locale sui redditi).

(3) With reference to Article 9—

Notwithstanding the provisions of Article 9, an enterprise of one of the Contracting States may be taxed by that Contracting State as if that Article had not come into effect but, so far as it is practicable to do so, in accordance with the principles applicable under that Article.

(4) With reference to Article 12—

The term ‘payments’ includes credits or any amount credited and a reference to royalties paid includes royalties credited. The term ‘royalties’ includes payments or credits for total or partial forbearance in respect of the use of a property or right referred to in paragraph (3).

(5) With reference to Article 24—

The tax paid in respect of income by way of dividend in one of the Contracting States that is to be allowed as a credit against tax payable in respect of that income in the other Contracting State shall not include tax paid in respect of the profits out of which the dividend is paid.

(6) With reference to paragraph (1) of Article 25—

The expression ‘notwithstanding the remedies provided by the national laws’ means that the mutual agreement procedure is not alternative to the national contentious proceedings which shall be, in any case, preventively initiated, when the claim is related to an assessment of Italian tax not in accordance with this Convention.

(7) With reference to Article 28—

The provisions of paragraph (3) shall not prevent the Contracting States from carrying out other practices for the allowance of the taxation reductions provided for in this Convention.

(8) If, in a Convention for the avoidance of double taxation that is subsequently made between Australia and a third State being a State that at the date of signature of this Protocol is a member of the Organisation for Economic Co-operation and Development, Australia shall agree to limit the rate of its taxation

(i) on dividends paid by a company which is a resident of Australia for the purposes of Australian tax to which a company that is a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 10; or

(ii) on interest arising in Australia to which a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 11; or

(iii) on royalties arising in Australia to which a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 12,

SCHEDULE 2—continued

the Government of Australia shall immediately inform the Government of the Republic of Italy in writing through the diplomatic channel and shall enter into negotiations with the Government of the Republic of Italy to review the provisions in sub-paragraphs (i), (ii) and (iii) above in order to provide the same treatment for Italy as that provided for the third State.

Done in duplicate at Canberra the fourteenth day of December 1982 in the English and Italian languages, both texts being equally authoritative.

JOHN HOWARD SERGIO ANGELETTI

For the Government For the Government of the

of Australia Republic of Italy

“SCHEDULE 22 Section 3

CONVENTION BETWEEN THE GOVERNMENT OF AUSTRALIA

AND THE GOVERNMENT OF

THE REPUBLIC OF KOREA

FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL

EVASION WITH RESPECT

TO TAXES ON INCOME

The Government of Australia and the Government of the Republic of Korea

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

Have agreed as follows:

CHAPTER 1

SCOPE OF THE CONVENTION

ARTICLE 1

Personal Scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are—

(a) in Korea:

(i) the income tax;

(ii) the corporation tax; and

(iii) the inhabitant tax;

(b) in Australia:

the Australian income tax, including the additional tax upon the undistributed amount of the distributable income of a private company.

SCHEDULE 2—continued

the existing taxes. At the end of each calendar year, the competent authority of each Contracting State shall notify the competent authority of the other Contracting State of any substantial changes which have been made in the laws of either State relating to the taxes to which this Convention applies.

CHAPTER II

DEFINITIONS

ARTICLE 3

General Definitions

(1) For the purposes of this Convention, unless the context otherwise requires—

(a) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes—

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Coral Sea Islands Territory; and

(b) the term ‘Korea’ means the Republic of Korea and, when used in a geographical sense, it includes any area adjacent to the territorial sea of the Republic of Korea which, in accordance with international law, has been or may hereafter be designated under the laws of the Republic of Korea as an area within which the sovereign rights of the Republic of Korea with respect to the sea-bed and subsoil and their natural resources may be exercised;

(d) the term ‘person’ means an individual, a company and any other body of persons;

(e) the term ‘company’ means any body corporate or any entity which is assimilated to a body corporate for tax purposes;

(f) the terms ‘enterprise of a Contracting State’ and ‘enterprise of the other Contracting State’ mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

(g) the term ‘tax’ means Australian tax or Korean tax, as the context requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to which this Convention applies by virtue of Article 2;

(i) the term ‘Korean tax’ means tax imposed by Korea, being tax to which this Convention applies by virtue of Article 2;

(j) the term ‘competent authority’ means, in the case of Australia, the Commissioner of Taxation or his authorized representative, and in the case of Korea, the Minister of Finance or his authorized representative; and

(k) the term ‘international traffic’, in relation to the operation of ships or aircraft by a resident of a Contracting State, means operations of ships or aircraft other than operations of ships or aircraft which are confined solely to places in the other Contracting State, and for this purpose the carriage of passengers, livestock, mail, goods or merchandise shipped in a Contracting State for discharge at another place in that State shall be treated as operations confined solely to places in that State.

(2) In this Convention, the terms ‘Australian tax’ and ‘Korean tax’ do not include any penalty or interest imposed under the law of either Contracting State relating to the taxes to which this Convention applies by virtue of Article 2.

SCHEDULE 2—continued

(3) In the application of this Convention by a Contracting State, any term not defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes to which this Convention applies.

ARTICLE 4

Residence

(1) For the purposes of this Convention, a person is, subject to paragraph (2), a resident of a Contracting State—

(a) in the case of Australia, if the person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Korea, if the person is a resident of Korea for the purposes of Korean tax.

(2) A person is not a resident of a Contracting State for the purposes of this Convention if he is liable to tax in that State in respect only of income from sources in that State.

(3) Where by reason of the preceding provisions of this Article an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules—

(a) he shall be deemed to be a resident solely of the Contracting State in which he has a permanent home available to him;

For purposes of this paragraph in determining the Contracting State with which an individual’s personal and economic relations are the closer, regard shall be given to his citizenship or nationality (if he is a citizen or national of a Contracting State).

(4) Where by reason of the provisions of paragraphs (1) and (2) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Convention, the term ‘permanent establishment’ means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term ‘permanent establishment’ includes especially—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;

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

(3) A building site or a construction, installation or assembly project constitutes a permanent establishment only if it exists for more than six months.

(4) An enterprise shall not be deemed to have a permanent establishment merely by reason of one or more of the following—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

SCHEDULE 2—continued

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise;

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

(5) An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if—

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

(6) A person acting in a Contracting State on behalf of an enterprise of the other Contracting State—other than an agent of an independent status to whom paragraph (7) applies—shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if—

(a) he has, and habitually exercises in that State, an authority to conclude contracts binding the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

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

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

(9) The principles set forth in paragraphs (1) to (8) inclusive shall also be applied in determining for the purposes of paragraph (6) of Article 11 and paragraph (5) of Article 12 of this Convention whether an enterprise of a Contracting State has a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of either Contracting State, has a permanent establishment in a Contracting State.

CHAPTER III

TAXATION OF INCOME

ARTICLE 6

Income from Real Property

(1) Income derived by a resident of a Contracting State from land (including any building or other construction) situated in the other Contracting State may be taxed in the other State.

(2) The term ‘land’ shall have the meaning which it has under the law of the Contracting State in which the land in question is situated and it shall include any lease of such land and any estate or direct interest in or over such land whether improved or not. A right to receive variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil or gas wells, quarries or other places of extraction or exploitation of natural resources shall be deemed to be an estate or direct interest in land situated in the Contracting State in which the mineral deposits, oil or gas wells, quarries or natural resources are situated.

(3) The provisions of paragraph (1) shall also apply to the income from land of an enterprise and to income from land used for the performance of professional services.

SCHEDULE 2—continued

ARTICLE 7

Business Profits

(1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

(5) Where the correct amount of profits attributable to a permanent establishment is incapable of determination or the ascertaining thereof presents exceptional difficulties, nothing in this Article shall affect the application of any law of that State relating to the determination of the tax liability of a person provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles of this Article.

(6) Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

Ships and Aircraft

(1) Profits of a resident of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

(2) The provisions of paragraph (1) shall also apply to profits derived from participation in a pool, a joint business or an international operating agency.

ARTICLE 9

Associated Enterprises

(1) Where a person subject to the taxing jurisdiction of a Contracting State and any other person are related and where conditions are operative between such related persons in their commercial or financial relations which are different from those which might be expected to operate if such persons were unrelated persons dealing wholly independently with one another, then any profits which, but for those conditions, might have been expected to accrue to one of those persons, but by reason of those conditions, have not so accrued, may be included in the profits of that person and taxed accordingly.

(2) A person is related to another person for purposes of this Convention if either person participates directly or indirectly in the management, control, or capital of the other, or if any third person or persons participates or participate directly or indirectly in the management, control, or capital of both.

(3) This Article shall apply only where both Contracting States have a tax interest.

(4) Notwithstanding the provisions of this Article, an enterprise of a Contracting State may be taxed by that State as if this Article had not come into effect but, so far as it is practicable to do so, in accordance with the principles of this Article.

SCHEDULE 2—continued

(5) Where profits on which an enterprise of a Contracting State has been charged to tax in that State are also included, by virtue of paragraph (1) or (4), in the profits of an enterprise of the other Contracting State and taxed accordingly, and the profits so included are profits which might have been expected to have accrued to that enterprise of the other State if the conditions operative between the enterprises had been those which might have been expected to have operated between independent enterprises dealing wholly independently with one another, then the first-mentioned State shall make an appropriate adjustment to the amount of tax charged on those profits in the first-mentioned State. In determining such an adjustment, due regard shall be had to the other provisions of this Convention in relation to the nature of the income, and for this purpose the competent authorities of the Contracting States shall if necessary consult each other.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of a Contracting State, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.

(3) The term ‘dividends’ in this Article means income from shares and other income which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident.

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In any such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Dividends paid by a company which is a resident of a Contracting State, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State. Provided that this paragraph shall not apply in relation to dividends paid by any company which by reason of paragraph (1) of Article 4 is a resident of Australia and which by reason of that paragraph is also a resident of Korea.

(6) Nothing in this Convention shall be construed as preventing a Contracting State from imposing on the income of a company which is a resident of the other Contracting State, tax in addition to the taxes referred to in Article 2 in relation to the first-mentioned Contracting State which are payable by a company which is a resident of the first-mentioned State, provided that any such additional tax shall not exceed 15 per cent of the amount by which the taxable income of the first-mentioned company of a year of income exceeds the tax payable on that taxable income to the first-mentioned State. Any tax payable to a Contracting State on the undistributed profits of a company which is a resident of the other Contracting State shall be calculated as if that company were not liable to the additional tax referred to in this paragraph and had paid dividends of such amount that tax equal to the amount of that additional tax would have been payable on the dividends in accordance with paragraph (2) of this Article.

ARTICLE 11

Interest

(1) Interest arising in a Contracting State, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such interest may be taxed in the Contracting State in which it arises, and according to the law of that State, but the fax so charged shall not exceed 15 per cent of the gross amount of the interest.

SCHEDULE 2—continued

(3) Interest derived by the Government of a Contracting State or by any other body exercising governmental functions in or in a part of a Contracting State, or by a bank performing central banking functions in a Contracting State, shall be exempt from tax in the other Contracting State.

(5) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the interest, being a resident of a Contracting State, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the indebtedness in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is that State itself or a political or administrative subdivision of that State or a local authority of that State or a person who, by reason of paragraph (1) of Article 4 is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State or outside both Contracting States a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(7) Where, owing to a special relationship between the payer and the person beneficially entitled to the interest, or between both of them and some other person, the amount of the interest paid, having regard to the indebtedness for which it is paid, exceeds the amount which might have been expected to have been agreed upon by the taxpayer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the interest paid shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

ARTICLE 12

Royalties

(1) Royalties arising in a Contracting State, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) Such royalties may be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the royalties.

(3) The term ‘royalties’ in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for—

(a) the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right;

(b) the use of, or the right to use, any industrial, commercial or scientific equipment;

(d) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in paragraph (a), any such equipment as is mentioned in paragraph (b) or any such knowledge or information as is mentioned in paragraph (c);

(e) the use of, or the right to use—

(i) motion picture films;

(ii) films or video tapes for use in connection with television; or

(iii) tapes for use in connection with radio broadcasting; or

(f) total or partial forbearance in respect of the use of a property or right referred to in this paragraph.

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the royalties, being a resident of a Contracting State, carries on business in the other Contracting State, in

SCHEDULE 2—continued

which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is that State itself or a political or administrative subdivision of that State or a local authority of that State or a person who, by reason of paragraph (1) of Article 4, is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State or outside both Contracting States a permanent establishment or fixed base in connection with which the liability to pay the royalties was incurred, and the royalties are borne by the permanent establishment or fixed base, then the royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(6) Where, owing to a special relationship between the payer and the person beneficially entitled to the royalties or between both of them and some other person, the amount of the royalties paid, having regard to what they are paid for, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the royalties paid shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

ARTICLE 13

Alienation of Property

(1) Income from the alienation of real property may be taxed in the Contracting State in which that property is situated.

(2) For the purposes of this Article—

(a) the term ‘real property’ shall include—

(i) a lease of land or any other direct interest in or over land;

(ii) rights to exploit, or to explore for, natural resources; and

(iii) shares or comparable interests in a company, the assets of which consist wholly or principally of direct interests in or over land in a Contracting State or of rights to exploit, or to explore for, natural resources in a Contracting State;

(b) real property shall be deemed to be situated—

(i) where it consists of direct interests in or over land—in the Contracting State in which the land is situated;

(ii) where it consists of rights to exploit, or to explore for, natural resources—in the Contracting State in which the natural resources are situated or the exploration may take place; and

(iii) where it consists of shares or comparable interests in a company, the assets of which consist wholly or principally of direct interests in or over land in a Contracting State or of rights to exploit, or to explore for, natural resources in a Contracting State—in the Contracting State in which the assets or the principal assets of the company are situated.

(3) Income derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic while owned by that enterprise or of personal property pertaining to the operation of those ships or aircraft shall be taxable only in that State.

ARTICLE 14

Independent Personal Services

(1) Income derived by an individual who is a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to activities exercised from that fixed base.

SCHEDULE 2—continued

ARTICLE 15

Dependent Personal Services

(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by an individual who is a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by an individual who is a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if—

(a) the recipient is present in that other State for a period or periods not exceeding in the aggregate 183 days in the year of income of that other State; and

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

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State.

ARTICLE 16

Directors’ Fees

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.

ARTICLE 17

Entertainers

(1) Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer (such as a theatre, motion picture, radio or television artiste, or a musician, or an athlete) from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

(2) Where income in respect of personal activities exercised by an entertainer in his capacity as such accrues not to the entertainer himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer are exercised.

(3) Notwithstanding the provisions of paragraph (1), income derived by an entertainer from his personal activities as such in a Contracting State shall be taxable only in the other Contracting State if his visit to the first-mentioned State is supported substantially from the public funds of that other State or of one of its political subdivisions or local authorities.

(4) Notwithstanding the provisions of paragraph (2), where income in respect of personal activities as such of an entertainer in a Contracting State accrues not to that entertainer himself but to another person, that income shall be taxable only in the other Contracting State if that person is supported substantially from the public funds of that other State or of one of its political subdivisions or local authorities, or if that person is a non-profit organisation of that other State.

SCHEDULE 2—continued

ARTICLE 18

Pensions and Annuities

(1) Subject to the provisions of paragraph (2) of Article 19, any pension or any annuity paid to a resident of a Contracting State shall be taxable only in that State.

ARTICLE 19

Government Service

(1) (a) Remuneration, other than a pension or annuity, paid by a Contracting State or a political subdivision or local authority of that Contracting State to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i) is a national or citizen of that State; or

(ii) did not become a resident of that State solely for the purpose of rendering the services.

(2) (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or local authority of that Contracting State to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national or citizen of, that Contracting State.

(3) The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or local authority of that Contracting State.

(4) The provisions of paragraphs (1) and (2) of this Article shall likewise apply in respect of remuneration or pensions paid, in the case of Korea, by the Bank of Korea, the Export-Import Bank of Korea, and the Korea Trade Promotion Corporation and, in the case of Australia, by the Reserve Bank of Australia.

ARTICLE 20

Professors and Teachers

An individual who is a resident of a Contracting State and who, at the invitation of any university, college, school or other recognised educational institution, visits the other Contracting State for a period not exceeding two years solely for the purpose of teaching or research or both at such educational institution shall be taxable only in the first-mentioned State on his remuneration for such teaching or research.

ARTICLE 21

Students and Trainees

Where a student or trainee, who is a resident of a Contracting State or who was a resident of that Contracting State immediately before visiting the other Contracting State and who is temporarily present in the other Contracting State solely for the purpose of his education or training, receives payments from sources outside the other Contracting State for the purpose of his maintenance or education, those payments shall be exempt from tax in the other Contracting State.

SCHEDULE 2—continued

ARTICLE 22

Income Not Expressly Mentioned

(1) Items of income of a resident of a Contracting State which are not expressly mentioned in the foregoing Articles of this Convention shall be taxable only in that Contracting State.

(2) However, if such income is derived by a resident of a Contracting State from sources in the other Contracting State, such income may also be taxed in the Contracting State in which it arises.

(3) The provisions of paragraph (1) shall not apply to income derived by a resident of a Contracting State where that income is effectively connected with a permanent establishment or fixed base situated in the other Contracting State. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

ARTICLE 23

Source of Income

Income derived by a resident of a Contracting State which, under any one or more of Articles 6 to 8 and 10 to 17 may be taxed in the other Contracting State, shall, for the purposes of Article 24 and of the income tax law of that other State, be deemed to be income from sources in that other State.

CHAPTER IV

METHODS OF ELIMINATION OF DOUBLE TAXATION

ARTICLE 24

(1) Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Korean tax paid under the law of Korea and in accordance with this Convention, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Korea shall be allowed as a credit against Australian tax payable on the income on which the Korean tax was paid. However, where the income is a dividend paid by a company which is a resident of Korea, the credit shall only take into account such tax in respect thereof as is additional to any tax payable by the company on the profits out of which the dividend is paid.

(2) In the case of a resident of Korea, double taxation shall be avoided in accordance with this paragraph. Subject to the provisions of Korean tax law regarding the allowance as a credit against Korean tax of tax payable in any country other than Korea (which shall not affect the general principle hereof) Australian tax payable (excluding in the case of a dividend tax payable in respect of the profits out of which the dividends are paid) under the laws of Australia and in accordance with this Convention, whether directly or by deduction, in respect of income from sources within Australia shall be allowed as a credit against Korean tax payable in respect of that income. The credit shall not, however, exceed that proportion of Korean tax which the income from sources within Australia bears to the entire income subject to Korean tax.

(3) (a) For the purposes of paragraph (4), the term ‘Korean tax forgone’ means—

(i) in the case of interest derived by a resident of Australia which is exempted from Korean tax in accordance with the relevant legislation, the amount which, under the law of Korea and in accordance with this Convention, would have been payable as Korean tax if the interest had not been so exempt and if the tax referred to in paragraph (2) of Article 11 were not to exceed 10 per cent of the gross amount of the interest; and

(ii) in the case of royalties derived by a resident of Australia which are exempted either wholly or partly from Korean tax in accordance with the relevant legislation, the amount or, where the royalties are partly exempt, the additional amount which, under the law of Korea and in accordance with this Convention, would have been payable as Korean tax if the royalties had not been so wholly or partly exempt, and if the tax referred to in paragraph (2) of Article 12 were not to exceed 10 per cent of the gross amount of the royalties.

SCHEDULE —continued

(b) In sub-paragraph (a), the term ‘the relevant legislation’ means those provisions of the laws of Korea relating to Korean tax which are agreed in letters exchanged from time to time between the Minister of Finance of Korea and the Treasurer of Australia for the purposes of this paragraph.

(4) (a) For the purposes of paragraph (1), an amount of Korean tax forgone shall be deemed to be an equivalent amount of Korean tax paid;

(b) For the purposes of the income tax law of Australia—

(i) an amount of interest referred to in sub-paragraph (3) (a) (i) shall be deemed to be increased by the amount of Korean tax forgone in respect of that interest; and

(ii) an amount of royalties referred to in sub-paragraph (3) (a) (ii) shall be deemed to be increased by the amount of Korean tax forgone in respect of those royalties.

(5) Paragraphs (3) and (4) shall not apply in relation to income derived in any year of income after the year of income that ends on 30 June in the calendar year fifth following the calendar year in which this Convention is signed or any later date that may be agreed by the Governments of the Contracting States in letters exchanged for this purpose.

CHAPTER V

SPECIAL PROVISIONS

ARTICLE 25

Mutual Agreement Procedure

(1) Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, notwithstanding the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of this Convention.

(2) The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any solution reached shall be implemented notwithstanding any time limits in the domestic laws of the Contracting States.

(3) The competent authorities of the Contracting States shall seek to resolve by agreement any difficulties or doubts arising as to the application or interpretation of this Convention. In particular the competent authorities of the Contracting States shall seek to agree as to with which of the Contracting States an individual described in sub-paragraph (3) (b) of Article 4 has closer personal and economic relations or in which of the Contracting States the place of effective management of a person other than an individual described in paragraph (4) of that Article is situated.

(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of this Convention.

ARTICLE 26

Exchange of Information

(1) The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning the taxes to which this Convention applies insofar as the taxation thereunder is not contrary to this Convention. The exchange of information is not restricted by Article 1. Any information received by the competent authority of a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment

SCHEDULE 2—continued

or collection of, enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes to which this Convention applies and shall be used only for such purposes.

(2) In no case shall the provisions of paragraph (1) be construed so as to impose on a Contracting State the obligation—

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

ARTICLE 27

Diplomatic Agents and Consular Officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

CHAPTER VI

FINAL PROVISIONS

ARTICLE 28

Entry Into Force

(1) Each Contracting State shall notify the other by note through the diplomatic channel of the completion of the procedure required by its law for the bringing into force of this Convention. This Convention shall enter into force on the first day of the month second following the month in which the later of these notifications is given.

(2) This Convention shall have effect—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in relation to income derived on or after 1 January in the calendar year in which this Convention is signed; and

(ii) in respect of other Australian tax, in relation to income of any year of income beginning on or after 1 July in the calendar year in which this Convention is signed;

(b) in Korea—

(i) in respect of tax withheld at source on amounts paid or credited to a non-resident, in relation to income derived on or after 1 January in the calendar year in which this Convention is signed; and

(ii) in respect of other Korean tax, in relation to income of any year of income beginning on or after 1 January in the calendar year in which this Convention is signed.

ARTICLE 29

Termination

This Convention shall remain in force indefinitely, but the Government of Australia or the Government of Korea may on or before 30 June in any calendar year after the expiration of 5 years from the date of its entry into force give to the other Government through the diplomatic channel written notice of termination and, in that event, this Convention shall cease to be effective—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in relation to income derived on or after 1 January in the calendar year next following that in which the notice of termination is given; and

SCHEDULE 2—continued

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

(b) in Korea—

(i) in respect of tax withheld at source on amounts paid or credited to a non-resident, in relation to income derived on or after 1 January in the calendar year next following that in which the notice of termination is given; and

(ii) in respect of other Korean tax, in relation to income of any year of income beginning on or after 1 January in the calendar year next following that in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have signed this Convention.

Done in duplicate at Canberra this twelfth day of July of the year one thousand nine hundred and eighty-two in the English and Korean languages, both texts being equally authoritative.

For the Government of For the Government of

Australia: the Republic of Korea:

JOHN HOWARD HA JONG YOON

PROTOCOL

THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA

HAVE AGREED AT THE SIGNING of the Convention between the two Governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income upon the following provisions which shall form an integral part of the said Convention.

(1) With reference to Article 2,

the Convention shall also apply to the Korean defence tax where charged by reference to the income tax or the corporation tax.

(2) With reference to Article 7,

the Convention shall not apply to profits of an enterprise from carrying on a business of any form of insurance, other than life insurance.

(3) With reference to paragraph (6) of Article 10,

the Governments of the Contracting States acknowledge that the additional tax referred to in that paragraph applicable at the time at which the Convention is signed is, in the case of Australia, only a tax of 5 per cent levied on the reduced taxable income of a company which is not a resident of Australia, in accordance with Section 128t of the Income Tax Assessment Act 1936.

(4) With reference to paragraph (1) of Article 24,

the Governments of the Contracting States acknowledge that a company which is a resident of Australia is, in accordance with the provisions of the taxation law of Australia in force at the date of signature of the Convention, entitled to a rebate in its assessment at the average rate of tax payable by the company in respect of dividends that are included in its taxable income and are received from a company which is a resident of Korea. In the event that Australia should cease to allow a company which is a resident of Australia a rebate in its assessment at the average rate of tax payable by the company in respect of dividends derived from sources in Korea and included in the taxable income of the company, the Governments of the Contracting States will enter into negotiations in order to establish new provisions concerning the credit to be allowed by Australia against its tax on the dividends.

(5) With reference to paragraph (2) of Article 24,

if subsequently to the signature of the Convention Korea provides relief from its tax on intercorporate dividends, or in a convention with another country agrees to give credit for the tax of the other country on profits out of which dividends are paid to a resident of Korea, it shall immediately notify Australia and enter into negotiations in order to establish new provisions concerning the credit to be allowed by Korea against its tax on dividends.

SCHEDULE 2—continued

(6) In general,

if in a convention for the avoidance of double taxation that is subsequently made between Australia and a third State Australia should agree—

(a) to reduce below 15 per cent the rate of its tax on dividends paid by a company which is a resident of Australia and to which a resident of the third State is beneficially entitled; or

(b) to include an Article dealing with non-discrimination,

the Government of Australia shall immediately inform the Government of Korea and shall enter into negotiations with the Government of Korea with a view to providing treatment in relation to Korea comparable with that provided in relation to that third State.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have signed this Protocol.

Done in duplicate at Canberra this twelfth day of July of the year one thousand nine hundred and eighty-two in the English and Korean languages, both texts being equally authoritative.

For the Government of For the Government of the

Australia: Republic of Korea:

JOHN HOWARD HA JONG YOON

“SCHEDULE 23

Section 3

CONVENTION

BETWEEN

AUSTRALIA

AND

THE KINGDOM OF NORWAY

FOR

THE AVOIDANCE OF DOUBLE TAXATION

AND

THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of Australia and the Government of the Kingdom of Norway,

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital,

Have agreed as follows:

ARTICLE 1

Personal Scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

SCHEDULE 2—continued

ARTICLE 2

Taxes Covered

(1) The existing taxes to which this Convention shall apply are—

(a) in Australia:

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

(b) in Norway:

(i) the national tax on income (inntektsskatt til staten);

(ii) the county municipal tax on income (inntektsskatt til fylkeskommunen);

(iii) the municipal tax on income (inntektsskatt til kommunen);

(iv) the national contributions to the Tax Equalisation Fund (fellesskatt til Skattefordelingsfondet);

(v) the national tax on capital (formuesskatt til staten);

(vi) the municipal tax on capital (formuesskatt til kommunen);

(vii) the national tax relating to income and capital from the exploration for and the exploitation of submarine petroleum resources and activities and work relating thereto, including pipeline transport of petroleum produced (skatt til staten vedrørende inntekt og formue i forbindelse med undersøkelse etter og utnyttelse av undersjøiske petroleumsforekomster og dertil knyttet virksomhet og arbeid, herunder rørledningstransport av utvunnet petroleum);

(viii) the national dues on remuneration to non-resident artistes (avgift til staten av honorarer som tilfaller kunstnere bosatt i utlandet);

(ix) the seamen’s tax (sjømannsskatt).

ARTICLE 3

General Definitions

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

(a) the term ‘Australia’ means the Commonwealth of Australia and, when used in a geographical sense, includes—

(i) the Territory of Norfolk Island;

(ii) the Territory of Christmas Island;

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

(iv) the Territory of Ashmore and Cartier Islands;

(v) the Coral Sea Islands Territory; and

(b) the term ‘Norway’ means the Kingdom of Norway, including any area outside the territorial waters of the Kingdom of Norway where the Kingdom of Norway, according to Norwegian legislation and in accordance with international law, may exercise her rights with respect to the sea-bed and subsoil and their natural resources; the term does not comprise Svalbard, Jan Mayen and the Norwegian dependencies (‘biland’);

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

(d) the term ‘person’ means an individual, a company and any other body of persons;

(e) the term ‘company’ means any body corporate or any entity which is treated as a company or a body corporate for tax purposes;

SCHEDULE 2—continued

(g) the term ‘tax’ means Australian tax or Norwegian tax, as the context requires;

(h) the term ‘Australian tax’ means tax imposed by Australia, being tax to which this Convention applies by virtue of Article 2;

(i) the term ‘Norwegian tax’ means tax imposed by Norway or its political subdivisions or local authorities, being tax to which this Convention applies by virtue of Article 2;

(j) the term ‘competent authority’ means, in the case of Australia, the Commissioner of Taxation or his authorised representative, and in the case of Norway, the Minister of Finance and Customs or his authorised representative.

(2) In this Convention, the terms ‘Australian tax’ and ‘Norwegian tax’ do not include any penalty or interest imposed under the law of either Contracting State relating to the taxes to which this Convention applies by virtue of Article 2.

(3) In the application of this Convention by a Contracting State, any term not defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of that State relating to the taxes to which this Convention applies.

ARTICLE 4

Residence

(1) For the purposes of this Convention, a person is a resident of one of the Contracting States—

(a) in the case of Australia, subject to the provisions of paragraph (2), if the person is a resident of Australia for the purposes of Australian tax; and

(b) in the case of Norway, if the person is liable to tax therein by reason of his domicile, residence, place of incorporation or any other criterion of a similar nature but not if he is liable to tax in Norway in respect only of income from sources therein.

(2) In relation to income from sources in Norway, a person who is subject to Australian tax on income which is from sources in Australia shall not be treated as a resident of Australia unless the income from sources in Norway is subject to Australian tax or, if that income is exempt from Australian tax, it is so exempt solely because it is subject to Norwegian tax.

(3) Where by reason of the preceding provisions of this Article an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident solely of the Contracting State in which he has a permanent home available to him;

(4) For the purposes of the last preceding paragraph, an individual’s citizenship or nationality of a Contracting State as well as his habitual abode shall be factors in determining the degree of his personal and economic relations with that Contracting State.

(5) Where by reason of the provisions of paragraph (1), a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Convention, the term ‘permanent establishment’ means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term ‘permanent establishment’ shall include especially—

(a) a place of management;

(b) a branch;

SCHEDULE 2—continued

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;

(g) an agricultural, pastoral or forestry property;

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

(3) Notwithstanding the preceding provisions of this Article, an enterprise shall not be deemed to have a permanent establishment merely by reason of—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

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

(4) An enterprise shall be deemed to have a permanent establishment in one of the Contracting States and to carry on business through that permanent establishment if—

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

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

(b) in so acting, he manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise.

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

(8) The principles set forth in paragraphs (1) to (7) inclusive shall be applied in determining for the purposes of paragraph (6) of Article 11 and paragraph (5) of Article 12 of this Convention whether there is a permanent establishment outside both Contracting States, and whether an enterprise, not being an enterprise of one of the Contracting States, has a permanent establishment in one of the Contracting States.

ARTICLE 6

Income from Real Property

(1) Income from real property may be taxed in the Contracting State in which the real property is situated.

SCHEDULE 2—continued

(2) In this Article, the term ‘real property’

(a) in the case of Australia, has the meaning which it has under the laws of Australia, and shall also include—

(i) a lease of land and any other interest in or over land, whether improved or not;

(b) in the case of Norway, means immovable property according to the laws of Norway, and shall also include—

(i) property accessory to immovable property;

(ii) rights to which the provisions of the general law respecting landed property apply;

(iii) usufruct of immovable property; and

Ships, boats and aircraft shall not be regarded as real property.

(3) A lease of land, any other interest in or over land and any right referred to in any of the sub-paragraphs of paragraph (2) shall be regarded as situated where the land, mineral deposits, oil or gas wells, quarries or natural resources, as the case may be, are situated.

(4) The provisions of paragraph (1) shall apply to income derived from the direct use, letting or use in any other form of real property.

(5) The provisions of paragraphs (1), (3) and (4) shall also apply to the income from real property of an enterprise and to income from real property used for the performance of professional services.

ARTICLE 7

Business Profits

(2) Subject to the provisions of paragraph (3), where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment or with other enterprises with which it deals.

(4) Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph (2) shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

(5) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

SCHEDULE 2—continued

(6) If the information available to the competent authority of a Contracting State is inadequate to determine the profits to be attributed to the permanent establishment of an enterprise, nothing in this Article shall affect the application of any law of that State relating to the determination of the tax liability of a person provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles of this Article.

(7) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

(8) Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

(9) Nothing in this Article shall affect the operation of any law of a Contracting State relating to taxation of profits from insurance with non-residents provided that if the relevant law in force in either State at the date of signature of this Convention is varied (otherwise than in minor respects so as not to affect its general character) the Contracting States shall consult with each other with a view to agreeing to any amendment of this paragraph that may be appropriate.

ARTICLE 8

Shipping and Air Transport

(1) Profits from the operation of ships or aircraft derived by a resident of one of the Contracting States shall be taxable only in that State.

(2) Notwithstanding the provisions of paragraph (1), such profits may be taxed in the other Contracting State where they are profits from operations of ships or aircraft confined solely to places in that other State.

(3) The provisions of paragraphs (1) and (2) shall apply in relation to the share of the profits from the operation of ships or aircraft derived by a resident of one of the Contracting States through participation in a pool service, in a joint transport operating organisation or in an international operating agency.

(5) The provisions of paragraphs (1) and (2) shall apply to profits derived by the joint Norwegian, Danish and Swedish air transport consortium Scandinavian Airlines System (SAS), but only insofar as profits derived by Det Norske Luftfartsselskap A/S (DNL), the Norwegian partner of the Scandinavian Airlines System (SAS), are in proportion to its share in that organisation.

ARTICLE 9

Associated Enterprises

(1) Where—

(a) an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and an enterprise of the other Contracting State,

SCHEDULE 2—continued

provided that that law shall be applied, so far as the information available to the competent authority permits, in accordance with the principles of this Article.

(3) Where profits on which an enterprise of one of the Contracting States has been charged to tax in that State are also included, by virtue of paragraph (1) or (2), in the profits of an enterprise of the other Contracting State and taxed accordingly, the competent authority of the first-mentioned State shall, with a view to the provision of such relief to the first-mentioned enterprise as may be appropriate, consult with the competent authority of the other State.

ARTICLE 10

Dividends

(2) However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident for the purposes of its tax, and according to the law of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

(4) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the dividends, being a resident of one of the Contracting States, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(5) Dividends paid by a company which is a resident of one of the Contracting States, being dividends to which a person who is not a resident of the other Contracting State is beneficially entitled, shall be exempt from tax in that other State except insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other State. However, this paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of Norway for the purposes of Norwegian tax.

(6) Subject to the provisions of this Convention, a Contracting State may impose on the income of a company which is a resident of the other Contracting State, tax in addition to the income tax (in this paragraph called ‘the general income tax’) payable by the company in respect of its taxable income; provided that the additional tax so imposed in respect of a year of income shall not exceed 15 per cent of the amount by which the taxable income of that year of income exceeds the general income tax payable in respect of the taxable income of that year of income.

ARTICLE 11

Interest

(1) Interest arising in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) However, such interest may also be taxed in the Contracting State in which it arises, and according to the law of that State, but the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

(3) Interest derived by the Government of a Contracting State, or by any other body exercising governmental functions in, or in a part of, a Contracting State, or by a bank performing central bank functions in a Contracting State, shall be exempt from tax in the other Contracting State.

SCHEDULE 2—continued

(4) The term ‘interest’ in this Article includes interest from Government securities or from bonds or debentures, whether or not secured by mortgage and interest from any other form of indebtedness as well as all other income assimilated to income from money lent by the taxation law of the Contracting State in which the income arises.

(5) The provisions of paragraphs (1) and (2) shall not apply if the person beneficially entitled to the interest, being a resident of one of the Contracting States, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the indebtedness in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is that State itself or a political subdivision or local authority of that State or a person who is a resident of that State for the purposes of its tax. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State or outside both Contracting States a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

(7) Where, owing to a special relationship between the payer and the person beneficially entitled to the interest, or between both of them and some other person, the amount of the interest paid, having regard to the indebtedness for which it is paid, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the interest paid shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

ARTICLE 12

Royalties

(1) Royalties arising in one of the Contracting States, being royalties to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

(2) However, such royalties may also be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.

(3) The term ‘royalties’ in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for—

(a) the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right;

(b) the use of, or the right to use, any industrial, commercial or scientific equipment;

(d) the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in sub-paragraph (a), any such equipment as is mentioned in sub-paragraph (b) or any such knowledge or information as is mentioned in sub-paragraph (c);

(e) the use of, or the right to use—

(i) motion picture films;

(ii) films or video tapes for use in connection with television; or

(iii) tapes for use in connection with radio broadcasting; or

(f) total or partial forbearance in respect of the use of a property or right referred to in this paragraph.

SCHEDULE 2—continued

permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

(6) Where, owing to a special relationship between the payer and the person beneficially entitled to the royalties or between both of them and some other person the amount of the royalties paid or credited, having regard to what they are paid or credited for, exceeds the amount which might have been expected to have been agreed upon by the payer and the person so entitled in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the amount of the royalties paid or credited shall remain taxable according to the law of each Contracting State, but subject to the other provisions of this Convention.

ARTICLE 13

Alienation of Property

(1) Income or gains from the alienation of real property or of an interest in or over land or of a right to exploit, or to explore for, a natural resource may be taxed in the Contracting State in which the real property, the land or the natural resource is situated.

(2) For the purposes of this Article, shares or comparable interests in a company, the assets of which consist wholly or principally of real property or of interests in or over land in one of the Contracting States or of rights to exploit, or to explore for, natural resources in one of the Contracting States, shall be deemed to be real property situated in the Contracting State in which the land or the natural resources are situated or in which the exploration may take place.

(3) Subject to the provisions of paragraph (1), income from the alienation of capital assets of an enterprise of one of the Contracting States or of capital assets available to a resident of one of the Contracting States for the purpose of performing professional services or other independent activities shall be taxable only in that State, but, where those assets form part of the business property of a permanent establishment or fixed base situated in the other Contracting State, such income may be taxed in that other State.

(4) Gains from the alienation of shares in a company the capital of which is wholly or partly divided into shares and which is a resident of Norway for the purposes of Norwegian tax, derived by an individual who is a resident of Australia, may be taxed in Norway.

(5) Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident.

ARTICLE 14

Independent Personal Services

(a) he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in which case the income may be taxed in the other State but only so much of it as is attributable to activities exercised from that fixed base; or

(b) he is present in the other State for a period or periods in any year of income exceeding 183 days or he is present in that State for a period or periods in any two consecutive years of income exceeding in the aggregate 183 days; in which case the income derived by the individual during such a period or periods may be taxed in the other State.

SCHEDULE 2—continued

(2) However, to the extent that the above-mentioned income is exempt from tax in the first-mentioned State, or upon the application of this Article will be exempt from tax in that State, the income may be taxed in the other State.

(3) The term ‘professional services’ includes services performed in the exercise of independent scientific, literary, artistic, educational or teaching activities as well as in the exercise of the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15

Dependent Personal Services

(1) Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by an individual who is a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if—

(a) the recipient is present in that other State for a period or periods in any year of income not exceeding in the aggregate 183 days in the year of income of that other State or he is present in that other State for a period or periods in any two consecutive years of income of that other State not exceeding in the aggregate 183 days; and

(b) the remuneration is paid by, or on behalf of, an employer who is a resident of the State of which the recipient is a resident; and

(c) the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in that other State.

However, to the extent that the above-mentioned remuneration is exempt from tax in the first-mentioned State, or upon the application of this Article will be exempt from tax in that State, the remuneration may be taxed in the other State.

(3) Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft operated in international traffic by a resident of one of the Contracting States may be taxed in that Contracting State. Where a resident of Norway derives remuneration in respect of an employment exercised aboard an aircraft operated in international traffic by the Scandinavian Airlines System (SAS) consortium, such remuneration shall be taxable only in Norway.

ARTICLE 16

Directors’ Fees

Directors’ fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors or of a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17

Entertainers

(2) Where income in respect of the personal activities of an entertainer as such accrues not to that entertainer but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer are exercised.

(3) Notwithstanding the provisions of paragraph (1) and Articles 14 and 15, income derived from activities performed in a Contracting State by entertainers shall be exempt from tax in that Contracting State if the visit to that State is substantially supported or sponsored by the other

SCHEDULE 2—continued

Contracting State and the entertainer is certified as qualifying under this provision by the competent authority of that other State.

ARTICLE 18

Pensions and Annuities

(1) Pensions (including government pensions and payments under a Social Security system) and annuities paid to a resident of one of the Contracting States shall be taxable only in that State.

(3) Any alimony or other maintenance payment arising in one of the Contracting States and paid to a resident of the other Contracting State, shall, if it is not an allowable deduction for the payer, be taxable only in the first-mentioned State.

ARTICLE 19

Government Service

(a) is a citizen or national of that State; or

(b) did not become a resident of that State solely for the purpose of performing the services.

(2) The provisions of paragraph (1) shall not apply to remuneration in respect of services rendered in connection with any trade or business carried on by one of the Contracting States or a political subdivision or local authority of that State. In such a case, the provisions of Article 15 or Article 16, as the case may be, shall apply.

ARTICLE 20

Students

Where a student, who is a resident of one of the Contracting States or who was a resident of that State immediately before visiting the other Contracting State and who is temporarily present in that other State solely for the purpose of his education, receives payments from sources outside that other State for the purpose of his maintenance or education, those payments shall be exempt from tax in that other State.

ARTICLE 21

Income Not Expressly Mentioned

(1) Items of income of a resident of one of the Contracting States which are not expressly mentioned in the foregoing Articles of this Convention shall be taxable only in that Contracting State.

(3) The provisions of paragraph (1) shall not apply to income derived by a resident of one of the Contracting States where that income is effectively connected with a permanent establishment or fixed base situated in the other Contracting State. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

SCHEDULE 2—continued

ARTICLE 22

Offshore Activities

(1) The provisions of this Article have effect notwithstanding any other provision of this Convention.

(2) A person who is a resident of one of the Contracting States and carries on activities offshore in the other Contracting State in connection with the exploration or exploitation of the sea-bed and subsoil and their natural resources situated in that other State shall, subject to paragraph (3) of this Article, be deemed in relation to those activities to be carrying on business in that other State through a permanent establishment or fixed base situated therein.

(3) The provisions of paragraph (2) shall not apply where the activities are carried on for a period not exceeding 30 days in the aggregate in any 12 months period. However, for the purposes of this paragraph:

(a) activities carried on by an enterprise associated with another enterprise shall be regarded as carried on by the enterprise with which it is associated if the activities in question are substantially the same as those carried on by the last-mentioned enterprise;

(b) two enterprises shall be deemed to be associated if one is controlled directly or indirectly by the other, or both are controlled directly or indirectly by a third person or persons.

(4) (a) Subject to sub-paragraph (b) of this paragraph, salaries, wages and similar remuneration derived by a resident of one of the Contracting States in respect of an employment connected with the exploration or exploitation of the sea-bed and subsoil and their natural resources situated in the other Contracting State shall, to the extent that the duties are performed offshore in that other State, be taxable only in that other State, provided that the employment offshore is carried on for a period exceeding 30 days in the aggregate in any 12 months period,

(b) Salaries, wages and similar remuneration derived by a resident of one of the Contracting States in respect of an employment, shall be taxable only in that Contracting State if the duties are performed, on behalf of an employer who is a resident of that State, in connection with the utilisation of petroleum reservoirs which extend across the trans-median line between a Contracting State and any other State, provided that there is an agreement between those two States for the joint exploitation of the reservoir, and the exploitation is performed simultaneously on both sides of the trans-median line.

ARTICLE 23

Source of Income

(1) Income derived by a resident of Norway which, under any one or more of Articles 6 to 8, Articles 10 to 18 and Article 21 may be taxed in Australia, shall for the purposes of the income tax law of Australia be deemed to be income from sources in Australia.

(2) Income derived by a resident of Australia which, under any one or more of Articles 6 to 8, Articles 10 to 18 and Article 21 may be taxed in Norway, shall for the purposes of paragraph (1) of Article 25 and of the income tax law of Australia be deemed to be income from sources in Norway.

ARTICLE 24

Capital

(1) Capital represented by real property as defined in Article 6, owned by a resident of Australia and situated in Norway, may be taxed in Norway.

(2) Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of Australia has in Norway or by movable property pertaining to a fixed base available to a resident of Australia in Norway for the purpose of performing independent personal services, may be taxed in Norway.

(3) Capital represented by ships and aircraft operated in international traffic by a resident of Australia and by movable property pertaining to the operation of such ships and aircraft, shall be exempt from tax in Norway.

(4) All other elements of capital of a resident of Australia shall be exempt from tax in Norway.

SCHEDULE 2—continued

(5) In the event that Australia should introduce a tax on capital, Australia shall advise Norway of the introduction of the tax and enter into negotiations with Norway with a view to agreeing to such amendments to this Article as may be appropriate.

ARTICLE 25

Methods of Elimination of Double Taxation

(1) Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Norwegian tax paid under the law of Norway and in accordance with this Convention, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Norway (not including, in the case of a dividend, tax paid in respect of the profits out of which the dividend is paid) shall be allowed as a credit against Australian tax payable in respect of that income.

(2) In the case of Norway:

(a) Where a resident of Norway derives income which, in accordance with the provisions of this Convention, may be taxed in Australia, Norway shall, subject to the provisions of paragraphs (b) and (c), exempt such income from tax;

(b) Where a resident of Norway derives items of income which, in accordance with the provisions of Articles 8, 10, 11 and 12, paragraph (2) of Article 21 and Article 22 may be taxed in Australia, Norway shall allow as a deduction from the tax on the income of that person an amount equal to the tax paid in Australia. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Australia;

(c) Where in accordance with any provision of this Convention income derived by a resident of Norway is exempt from tax in Norway, Norway may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.

ARTICLE 26

Mutual Agreement Procedure

(1) Where a resident of one of the Contracting States considers that the actions of the taxation authorities of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years from the first notification of the action giving rise to taxation not in accordance with this Convention.

(2) The competent authority shall endeavour, if the claim appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve by mutual agreement the case with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Convention. The solution so reached shall be implemented notwithstanding any time limits in the domestic laws of the Contracting States.

(3) The competent authorities of the Contracting States shall jointly endeavour to resolve by mutual agreement any difficulties or doubts arising as to the application of this Convention.

(4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of this Convention.

ARTICLE 27

Exchange of Information

(1) The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Convention or of the domestic laws of the Contracting States concerning the taxes to which this Convention applies insofar as the taxation thereunder is not contrary to this Convention. The exchange of information is not restricted by Article 1. Any information received by the competent authority of a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment

SCHEDULE 2—continued

or collection of enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes to which this Convention applies and shall be used only for such purposes.

(2) In no case shall the provisions of paragraph (1) be construed so as to impose on a Contracting State the obligation—

(a) to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

ARTICLE 28

Diplomatic and Consular Officials

Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

ARTICLE 29

Entry into Force

This Convention shall enter into force on the date on which the Government of Australia and the Government of the Kingdom of Norway exchange notes through the diplomatic channel notifying each other that the last of such constitutional processes as are necessary to bring this Convention into force in Australia and Norway, as the case may be has been completed, and thereupon this Convention shall have effect—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in relation to income derived on or after 1 July 1982;

(ii) in respect of other Australian tax, in relation to income of any year of income beginning on or after 1 July 1982;

(b) in Norway—

in respect of taxes on income or on capital relating to the 1982 and subsequent calendar years (including accounting periods ending in those years).

ARTICLE 30

Termination

This Convention shall remain in force indefinitely, but the Government of Australia or the Government of the Kingdom of Norway may, on or before 30 June in any calendar year beginning after the expiration of 5 years from the date of its entry into force, give to the other Government through the diplomatic channel written notice of termination and, in that event, this Convention shall cease to be effective—

(a) in Australia—

(i) in respect of withholding tax on income that is derived by a non-resident, in relation to income derived on or after 1 July in the calendar year immediately following that in which the notice of termination is given;

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

(b) in Norway—

in respect of taxes on income or on capital relating to the calendar year immediately following that in which the notice is given, and subsequent calendar years (including accounting periods ending in those years).

SCHEDULE 2—continued

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

DONE in duplicate at Canberra this sixth day of May One thousand nine hundred and eighty-two in the English language.

JOHN HOWARD TORLEIV ANDA

FOR THE GOVERNMENT FOR THE GOVERNMENT

OF AUSTRALIA OF THE KINGDOM OF NORWAY

PROTOCOL

The Government of Australia and

The Government of the Kingdom of Norway

Have agreed at the signing today of the Convention between the two States for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital upon the following provisions which shall form an integral part of the said Convention:

(1) With reference to Articles 10, 11 and 12, if after 26 September 1980, in a Convention for the avoidance of double taxation that is made between Australia and a third State being a State that is a member of the Organisation for Economic Co-operation and Development, Australia shall agree to limit the rate of its taxation—

(a) on dividends paid by a company which is a resident of Australia for the purposes of Australian tax to which a company that is a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 10; or

(b) on interest arising in Australia to which a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 11; or

(c) on royalties arising in Australia to which a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 12,

the Government of Australia shall immediately inform the Government of the Kingdom of Norway in writing through the diplomatic channel and shall enter into negotiations with the Government of the Kingdom of Norway to review the provisions specified in (a), (b) and (c) above in order to provide the same treatment for Norway as that provided for the third State.

(2) With reference to Article 25,

(a) if, after 26 September 1980, in a Convention for the avoidance of double taxation that is made between Norway and a third State being a State that is a member of the Organisation for Economic Co-operation and Development, Norway shall agree to give special relief (holding privilege) from its tax in respect of dividends paid by a company which is a resident of that third State to a company resident in Norway, (not being relief that represents a continuation of relief provided for in any such Convention with that State that was in force at that date) the Government of the Kingdom of Norway shall immediately inform the Government of Australia in writing through the diplomatic channel and shall enter into negotiations with the Government of Australia to review the provisions of Article 25 in order to provide the same relief in respect of dividends paid by a company which is a resident of Australia;

(b) if Norway should by note forwarded through the diplomatic channel so request, paragraph (2) of Article 25 shall be replaced by the following text, which shall enter into force on the 30th day after receipt of the note is confirmed through the diplomatic channel, and shall apply in respect of taxes on income relating to the calendar year (including accounting periods ending in such year) immediately following that in which the exchange of notes is made:

‘(2) In the case of Norway:

Where a resident of Norway derives income which in accordance with the provisions of this Convention may be taxed in Australia, Norway shall allow as a deduction from the income tax of that person an amount equal to the tax paid in Australia. Such deduction shall not, however, exceed that part of the Norwegian tax, as computed before the deduction is given, which is appropriate to the income derived from Australia.’

SCHEDULE 2—continued

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

DONE in duplicate at Canberra this sixth day of May One thousand nine hundred and eighty-two in the English language.

JOHN HOWARD TORLEIV ANDA

FOR THE GOVERNMENT FOR THE GOVERNMENT

OF AUSTRALIA OF THE KINGDOM OF NORWAY”.

NOTE

1. No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No. 88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965; No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972; Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143, 1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143 and 154, 1981.