Australian Tax Treaties

Papua New Guinea Agreement  

AGREEMENT BETWEEN AUSTRALIA AND THE INDEPENDENT STATE OF PAPUA NEW GUINEA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME  

ARTICLE 23   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), Papua New Guinea tax paid under the law of Papua New Guinea 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 Papua New Guinea shall be allowed as a credit against Australian tax payable in respect of that income.

2.    
Where a company which is a resident of Papua New Guinea and is not a resident of Australia for the purposes of Australian tax pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than 10 per cent of the voting power of the first-mentioned company, the credit referred to in paragraph 1 shall include the Papua New Guinea tax paid by that first-mentioned company in respect of that portion of its profits out of which the dividend is paid.

3.    
For the purpose of paragraphs 1 and 2, Papua New Guinea tax paid shall include an amount equivalent to the amount of any Papua New Guinea tax forgone.

4.    
In paragraph 3, the term " Papua New Guinea tax forgone " means an amount which, under the law of Papua New Guinea relating to Papua New Guinea tax and in accordance with this Agreement, would have been payable as Papua New Guinea tax on income but for an exemption from, or a reduction of, Papua New Guinea tax on that income resulting from the operation of those provisions of the laws of Papua New Guinea which the Treasurer of Australia and the Minister for Finance and Planning of Papua New Guinea agree from time to time in letters exchanged for this purpose to be provisions to which this paragraph applies. Subject to its terms, such an agreement on applicable provisions shall be valid for as long as those provisions are not modified after the date of that agreement or have been modified only in minor respects so as not to affect their general character.

5.    
Paragraph 3 and 4 shall apply only in relation to those years of income that may be agreed by the Treasurer of Australia and the Minister for Finance and Planning of Papua New Guinea in letters exchanged for this purpose.

6.    
Subject to the provisions of the law of Papua New Guinea from time to time in force which relate to the allowance of a credit against Papua New Guinea tax of tax paid in a country outside Papua New Guinea (which shall not affect the general principle hereof), tax paid under the law of Australia and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Papua New Guinea for the purposes of the law of Papua New Guinea relating to Papua New Guinea tax from sources in Australia (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 Papua New Guinea tax payable in respect of that income.