Australian Tax Treaties
Czech Agreement
AGREEMENT BETWEEN AUSTRALIA AND THE CZECH REPUBLIC 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 of this Article), Czech tax paid under the law of the Czech Republic 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 the Czech Republic shall be allowed as a credit against Australian tax payable in respect of that income.
2.
Where a company which is a resident of the Czech Republic 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 firstmentioned company, the credit referred to in paragraph 1 shall include the Czech tax paid by that firstmentioned company in respect of that portion of its profits out of which the dividend is paid.
3.
The Czech Republic, when imposing taxes on its residents may include in the tax base upon which those taxes are imposed the items of income which, according to the provisions of this Agreement, may also be taxed in Australia but shall allow as a deduction from the amount of tax computed on that base an amount equal to that tax paid in Australia. That deduction shall not, however, exceed that part of the Czech tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of those Articles, may be taxed in Australia.
4.
Where a resident of one of the Contracting States derives income which, in accordance with the provisions of this Agreement is taxable only in the other Contracting State, or is exempt from tax in the firstmentioned State, that income may be taken into account in calculating the amount of the tax payable on the remaining income of that resident in the firstmentioned State.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) has modified the application of this tax treaty. A synthesised text of the MLI and this tax treaty is available to facilitate the understanding of how the MLI modifies this tax treaty.
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 of this Article), Czech tax paid under the law of the Czech Republic 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 the Czech Republic shall be allowed as a credit against Australian tax payable in respect of that income.
2.
Where a company which is a resident of the Czech Republic 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 firstmentioned company, the credit referred to in paragraph 1 shall include the Czech tax paid by that firstmentioned company in respect of that portion of its profits out of which the dividend is paid.
3.
The Czech Republic, when imposing taxes on its residents may include in the tax base upon which those taxes are imposed the items of income which, according to the provisions of this Agreement, may also be taxed in Australia but shall allow as a deduction from the amount of tax computed on that base an amount equal to that tax paid in Australia. That deduction shall not, however, exceed that part of the Czech tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of those Articles, may be taxed in Australia.
4.
Where a resident of one of the Contracting States derives income which, in accordance with the provisions of this Agreement is taxable only in the other Contracting State, or is exempt from tax in the firstmentioned State, that income may be taken into account in calculating the amount of the tax payable on the remaining income of that resident in the firstmentioned State.
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