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  • New Australia-Israel tax treaty

    Australia and IsraelExternal Link have signed a tax treaty which, following its entry into force, will be the first tax treaty between the two jurisdictions. The treaty, signed on 28 March 2019, is titled the Convention between the Government of Australia and the Government of the State of Israel for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and its associated Protocol.

    The objectives of the treaty are to:

    • promote closer economic cooperation between Australia and Israel by reducing taxation barriers such as the double taxation of income derived by residents of either country
    • improve the integrity of the tax system by providing the framework through which the tax administrations of Australia and Israel can cooperate to prevent tax avoidance and evasion.

    The treaty includes the Organisation for Economic Co-operation and Development (OECD) base erosion and profit shifting recommendations to mitigate tax evasion and avoidance through tax treaties.

    The legislation to incorporate the treaty into the International Tax Agreements Act 1953 received royal assent on 28 November 2019. The treaty will enter into force once each jurisdiction has completed its domestic requirements and notified each other of this through the diplomatic channels. If this occurs before 1 January 2020 then the DTA will take effect in Australia as follows:

    • for withholding taxes – on income derived on or after 1 January 2020
    • for fringe benefits tax – on benefits provided on or after 1 April 2020
    • for all other taxes – for income years starting on or after 1 July 2020.

    See also:

    Last modified: 04 Dec 2019QC 60826