Australia Publishes Synthesized Texts Of Tax Treaties With Japan, New Zealand, Poland, And The UK As Impacted By The BEPS MLI

; posted on
February 26th, 2019

The Australian Taxation Office (ATO) published the synthesized texts of the OECD multilateral instrument and Australia’s income tax treaties with Japan, New Zealand, Poland, and the United Kingdom as impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).

The Effective Dates of the MLI Provision

The provisions of the MLI (other than Article 16 (Mutual Agreement Procedure) and Part VI (Arbitration) of the MLI) have effect with respect to the Conventions:

  • January 1, 2019, for withholding taxes levied by Australia and its treaty partners;
  • July 1, 2019, for all other taxes, levied by Australia and its treaty partners.

Notwithstanding the above dates, Article 16 (mutual agreement procedure) of the MLI takes effect for a case presented to the competent authority of a contracting state on or after January 1, 2019, except for cases that were not eligible to be presented as of that date under the treaty before its modification by the MLI, without regard to the tax period to which the case relates.

Additionally, notwithstanding the above, the provisions of Part VI (arbitration) of the MLI takes effect:

  • for cases presented to the competent authority of a contracting state (as described in subparagraph 1 (a) of article 19 (mandatory binding arbitration) of the MLI), on or after January 1, 2019; and
  • for cases presented to the competent authority of a contracting state before January 1, 2019, on the date when both contracting states have notified the depositary that they have reached mutual agreement under article 19 (10) of the MLI, along with information regarding the date or dates on which such cases will be considered to have been presented to the competent authority of a contracting state (as described in subparagraph 1 (a) of article 19 of the MLI), according to the terms of that mutual agreement.

The Adoption of MLI in the Income Tax Treaty

Referring to the synthesized text that was published by the ATO, Australia did not adopt the entire article laid out in the MLI. The articles adopted also vary depending on the treaty partners.
 

Article of the MLI

United Kingdom

Poland

Japan

New Zealand

3 - transparent entity

v

v

 

v

4 - dual resident entities

v

v

v

v

6 - purpose of a covered tax agreement)

 

v

v

v

7 - prevention of treaty abuse

v

v

v

 

8 - dividend transfer transaction

 

 

 

v

9 - capital gains from alienation of shares or interests of entities deriving their value principally from immovable property

v

v

v

v

11 - application of tax agreements to restrict a party’s right to tax its own resident

v

v

 

v

13 - artificial avoidance of permanent establishment status through the specific activity exemptions

v

 

v

v

14 - splitting-up of contracts

 

 

 

v

15 - definition of a person closely related to an enterprise

v

v

v

v

16 - mutual agreement procedures

v

v

v

v

19 - arbitration

v

v

v

v


The Synthesized Texts represent the shared understanding of the respective competent authorities on the modification made by the MLI to the respective treaties. They are to be used solely for the purpose of facilitating the understanding of the application of the MLI to the treaties and do not constitute a source of law.

Source: Australian Tax Office

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