Protocol Amending the Convention Between Canada and Australia

Status of Negotiations

For the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

The Government of Canada and the Government of Australia,

DESIRING to amend the Convention between Canada and Australia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed at Canberra on 21 May 1980 (in this Protocol referred to as the "Convention"),

HAVE AGREED as follows:

Article 2 of the Convention shall be deleted and replaced by the following:

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

2. This Convention shall apply also to any identical or substantially similar taxes which are imposed under the federal law of Australia or the law of Canada 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 each other of any substantial changes which have been made in the law of their respective States relating to the taxes to which this Convention applies within a reasonable period of time after those changes."

1. Subparagraphs (a) and (k) of paragraph 1 of Article 3 of the Convention shall be deleted and respectively replaced by the following:
2. Paragraph 3 of Article 3 of the Convention shall be deleted and replaced by the following:
Paragraphs 1 and 2 of Article 4 of the Convention shall be deleted and replaced by the following:
Subparagraph (b) of paragraph 4 of Article 5 of the Convention shall be deleted and replaced by the following:

Article 6 of the Convention shall be deleted and replaced by the following:

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

2. For the purposes of this Convention, the term "real property" in relation to a Contracting State, shall have the meaning which it has under the law of that State and shall include:

3. Any interest or right referred to in paragraph 2 shall be regarded as situated where the land, mineral, oil or gas deposits, quarries or natural resources, as the case may be, are situated or where the exploration may take place.

4. The provisions of paragraphs 1 and 3 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.".

1. Paragraph 6 of Article 7 of the Convention shall be deleted and replaced by the following:
2. A new paragraph 8 shall be added to Article 7 of the Convention as follows:
Paragraph 4 of Article 8 of the Convention shall be deleted and replaced by the following:
1. Paragraphs 2, 4 and 6 of Article 10 of the Convention shall be deleted and respectively replaced by the following:

2. The reference in paragraph 7 of Article 10 of the Convention to "15 per cent" shall be deleted and replaced by a reference to "5 per cent".

The reference in paragraph 2 of Article 11 of the Convention to "15 per cent" shall be deleted and replaced by a reference to "10 per cent".

1. Paragraph 3 of Article 12 of the Convention shall be deleted and replaced by the following:
2. A new paragraph 7 shall be added to Article 12 of the Convention as follows:
3. A new paragraph 8 shall be added to Article 12 of the Convention as follows:

Article 13 of the Convention shall be deleted and replaced by the following:

1. Income, profits or gains derived by a resident of a Contracting State from the alienation of real property situated in the other Contracting State may be taxed in that other State.

2. Income, profits or gains from the alienation of property, other than real property, that forms part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or pertains to a fixed base available in that other State to a resident of the first-mentioned State for the purpose of performing independent personal services, including income, profits or gains from the alienation of that permanent establishment (alone or with the whole enterprise) or of that fixed base, may be taxed in that other State.

3. Income, profits or gains from the alienation of ships or aircraft operated in international traffic, or of property, other than real property, pertaining to the operation of those ships or aircraft, shall be taxable only in the Contracting State of which the enterprise alienating such ships, aircraft, or other property is a resident.

4. Income, profits or gains derived by a resident of a Contracting State from the alienation of any shares or other interests in a company, or of an interest of any kind in a partnership, trust or other entity, where the value of the assets of such entity is derived principally, whether directly or indirectly (including through one or more interposed entities, such as, for example, through a chain of companies), from real property situated in the other Contracting State, may be taxed in that other State.

5. Nothing in this Convention shall affect the application of a law of a Contracting State relating to the taxation of gains of a capital nature derived from the alienation of any property other than that to which any of the preceding paragraphs of this Article apply.

6. Where an individual who ceases to be a resident of a Contracting State, and immediately thereafter becomes a resident of the other Contracting State, is treated for the purposes of taxation in the first-mentioned State as having alienated a property and is taxed in that State by reason thereof, the individual may elect to be treated for the purposes of taxation in the other State as if the individual had, immediately before becoming a resident of that State, disposed of and re-acquired the property for an amount equal to its fair market value at that time.".

1. Paragraphs 2 and 3 of Article 15 of the Convention shall be deleted and replaced by the following:

"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:

2. Paragraph 4 of Article 15 of the Convention shall be renumbered as paragraph 3.

Article 22 of the Convention shall be deleted and replaced by the following:

1. Income, profits or gains derived by a resident of a Contracting State which, under any one or more of Articles 6 to 8 and 10 to 19, may be taxed in the other Contracting State, shall for the purposes of the law of that other Contracting State relating to its tax be deemed to be income from sources in that other Contracting State.

2. Income, profits or gains derived by a resident of a Contracting State which, under any one or more of Articles 6 to 8 and 10 to 19, may be taxed in the other Contracting State, shall for the purposes of Article 23 and of the law of the first-mentioned Contracting State relating to its tax be deemed to be income from sources in the other Contracting State.".

Article 23 of the Convention shall be deleted and replaced by the following:

1. In the case of Australia, double taxation shall be avoided as follows:
2. In the case of Canada, double taxation shall be avoided as follows:
A new paragraph 6 shall be added to Article 24 of the Convention as follows:

A new Article 26A shall be added to the Convention immediately after Article 26 as follows:

Nothing in this Convention shall be construed as preventing Canada from imposing a tax on amounts included in the income of a resident of Canada with respect to a partnership, trust, or controlled foreign affiliate, in which that resident has an interest.".

The Government of Australia and the Government of Canada shall notify each other through the diplomatic channel of the completion of their respective internal procedures required for the bringing into force of this Protocol which shall form an integral part of the Convention. The Protocol shall enter into force on the date of the later of these notifications and its provisions shall thereupon have effect:

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

DONE at Canberra, this 23rd day of January 2002, in the English and French languages, the two versions being equally authentic.

Jean Fournier
High Commissioner

FOR THE GOVERNMENT OF CANADA

Helen Coonan
Minister for Revenue

FOR THE GOVERNMENT OF AUSTRALIA

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: