Australian Tax Treaties
Japanese Convention
CONVENTION BETWEEN AUSTRALIA AND JAPAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
SECTION (21)
(21)
With reference to Article 26 (Non-Discrimination) of the Convention:
(a) Subdivision D of Division 2 of Part III of the ITAA 1936, to the extent those provisions do not allow tax rebates or credits to non-resident taxpayers in relation to dividends paid by a company that is a resident of Australia for the purposes of its tax;
(b) Division 6AAA of Part III of the ITAA 1936, which provides for the taxation of certain residents in relation to non-resident trust estates;
(c) Division 13 of Part III of the ITAA 1936, which deals with transfer pricing;
(d) Section 177E of Part IVA of the ITAA 1936, which addresses dividend stripping arrangements;
(e) Part X of the ITAA 1936, which provides for the taxation of certain residents with interests in controlled foreign companies;
(f) Part XI of the ITAA 1936, which provides for the taxation of certain resident investors in foreign investment funds and foreign life assurance policies;
(g) Section 122-25 of Part 3-3 of Chapter 3 of the ITAA 1997, which does not permit the deferral of tax arising on the transfer of an asset, where the subsequent transfer of the asset by the transferee would be beyond the taxing jurisdiction of Australia under its laws;
(h) Part 3-90 of Chapter 3 of the ITAA 1997, which provides for consolidation of group entities for treatment as a single entity for tax purposes;
(i) Division 820 of Part 4-5 of Chapter 4 of the ITAA 1997, which addresses thin capitalisation; and
(j) any provision adopted after the date of signature of the Convention which is substantially similar in purpose or intent to a provision covered by this paragraph, or is otherwise agreed between the Governments of the Contracting States through an exchange of diplomatic notes.
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.
With reference to Article 26 (Non-Discrimination) of the Convention:
It is understood that nothing in the Article shall be construed as restricting the application of any of the following provisions of the laws of Australia:
(a) Subdivision D of Division 2 of Part III of the ITAA 1936, to the extent those provisions do not allow tax rebates or credits to non-resident taxpayers in relation to dividends paid by a company that is a resident of Australia for the purposes of its tax;
(b) Division 6AAA of Part III of the ITAA 1936, which provides for the taxation of certain residents in relation to non-resident trust estates;
(c) Division 13 of Part III of the ITAA 1936, which deals with transfer pricing;
(d) Section 177E of Part IVA of the ITAA 1936, which addresses dividend stripping arrangements;
(e) Part X of the ITAA 1936, which provides for the taxation of certain residents with interests in controlled foreign companies;
(f) Part XI of the ITAA 1936, which provides for the taxation of certain resident investors in foreign investment funds and foreign life assurance policies;
(g) Section 122-25 of Part 3-3 of Chapter 3 of the ITAA 1997, which does not permit the deferral of tax arising on the transfer of an asset, where the subsequent transfer of the asset by the transferee would be beyond the taxing jurisdiction of Australia under its laws;
(h) Part 3-90 of Chapter 3 of the ITAA 1997, which provides for consolidation of group entities for treatment as a single entity for tax purposes;
(i) Division 820 of Part 4-5 of Chapter 4 of the ITAA 1997, which addresses thin capitalisation; and
(j) any provision adopted after the date of signature of the Convention which is substantially similar in purpose or intent to a provision covered by this paragraph, or is otherwise agreed between the Governments of the Contracting States through an exchange of diplomatic notes.
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