Australian Tax Treaties
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.
Profits of an enterprise of a Contracting State derived from the operation of ships or aircraft in international traffic shall be taxable only in that State.
2.
Notwithstanding the provisions of paragraph 1, profits of an enterprise of a Contracting State derived from the operation of ships or aircraft may be taxed in the other Contracting State to the extent that they are profits derived directly or indirectly from ship or aircraft operations confined solely to places in that other State.
3.
The amount which shall be charged to tax in a Contracting State under paragraph 2 in respect of transport operations of ships shall not exceed 5 per cent of the amount paid or payable (net of rebates) in respect of carriage.
4.
The provisions of paragraph 3 shall not apply to profits from the operation of ships, where the profits are attributable to a permanent establishment of the enterprise situated in the other Contracting State.
5.
The profits to which the provisions of paragraphs 1 and 2 apply include profits from the operation of ships or aircraft derived through participation in a pool service or other profit sharing arrangement.
6.
For the purposes of this Article, profits derived from the carriage by ships or aircraft of passengers, livestock, mail, goods or merchandise which are shipped in a Contracting State and are discharged at a place in that State (without having been discharged outside that State) shall be treated as profits from ship or aircraft operations confined solely to places in that State.
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