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 (5)
(5)
With reference to subparagraphs (b) and (c) of paragraph 4 of Article 5 (Permanent Establishment) of the Convention:
(a) It is understood that an enterprise of a Contracting State shall not be considered to operate equipment in the other Contracting State where the enterprise leases equipment under a lease contract that is solely for the provision of equipment, including a bareboat lease contract.
(b) It is understood that the factors of size, quantity or value of equipment or the role of equipment in income producing activities are relevant in determining whether the equipment is substantial on the basis of the facts and circumstances of each particular case.
(c) It is understood that the term " substantial equipment " may include:
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 subparagraphs (b) and (c) of paragraph 4 of Article 5 (Permanent Establishment) of the Convention:
(a) It is understood that an enterprise of a Contracting State shall not be considered to operate equipment in the other Contracting State where the enterprise leases equipment under a lease contract that is solely for the provision of equipment, including a bareboat lease contract.
(b) It is understood that the factors of size, quantity or value of equipment or the role of equipment in income producing activities are relevant in determining whether the equipment is substantial on the basis of the facts and circumstances of each particular case.
(c) It is understood that the term " substantial equipment " may include:
(i) industrial earthmoving equipment or construction equipment used in road building, dam building or powerhouse construction;
(ii) manufacturing or processing equipment used in a factory; and
(iii) oil or drilling rigs, platforms and other structures used in the petroleum or mining industry.
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