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  • Competent Authority determination

    This list outlines the information to send with your request for a determination from an Australian Competent Authority under:

    • Article 10(3)(c) of the tax treaty between Australia and the United Kingdom (Convention between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains);
    • Article 16(5) of the tax treaty between Australia and the United States (Convention between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income) (US Convention); and
    • similar provisions in other tax treaties.

    This is not a complete list. The information required will depend on the circumstances of the applicant. Sending this information with your initial request will help achieve a quicker outcome.

    1. A copy of the global corporate structure, in particular from Australian payer company to ultimate parent.
    2. A description of activities/functions undertaken by each company interposed between the Australian payer and ultimate parent including functions performed and employee numbers etc.
    3. A broad description of the business carried on by each company in the relevant treaty country, including functions performed and employee numbers etc.    
      • This will help establish relevance of the treaty country operations to the group wide business.
    4. A history of companies from (and including) the Australian payer to ultimate parent including:    
      • dates the companies were established
      • details of any    
        • disposals or acquisitions
        • corporate restructures and liquidations
        • change of corporate residence.
      • Include any proposed changes and the commercial reason for the respective changes.
    5. An explanation of any tax consolidated/multiple entry consolidated group changes or proposed changes.
    6. Details of the capital structure of all companies in the chain from Australian payer to ultimate parent, including:    
      • each class of shares and whether any are listed and traded regularly in a recognised stock exchange, and associated rights (for example, voting, conversion and dividend rights)
      • nature of any changes to the capital structures in last three years.
    7. Any of the following:    
      • confirmation that all companies in the chain beneficially own all dividends received
      • details of any company that is a nominee, agent or conduit
      • confirmation that the company does not have a legal or equitable obligation to surrender the dividends to another party.
    8. If the applicant has become the beneficial owner of the dividends or is no longer the beneficial owner of the dividends, provide details including commercial reasons of any:    
      • corporate restructure
      • new incorporation
      • interposition
      • acquisition
      • change of residency, or
      • other changes.
    9. History of dividends – confirming the amounts and use of funds:    
      • paid by the Australian company
      • received by the applicant (including from other companies)
      • paid by the applicant up the corporate chain.
      • Include each period of time the recipient of the dividend beneficially owned the dividend.
    10. Details of the company's/group of companies':    
      • capital management policy, or
      • dividend policy.
    11. A copy of the financial statements for the current and prior three years for both the:    
      • Australian company
      • applicant.
    12. An explanation of the source of the income generating the unfranked dividend, including details of when the Australian payer receives from its subsidiaries either:    
      • a return of capital
      • other distributions.
    13. Confirmation of the residency of the applicant issued by the revenue authority of the treaty country.
    14. Confirmation that the applicant does not carry on a business through a permanent establishment in Australia.
    15. An explanation of the tax treatment of dividend flows from Australian payer to ultimate parent.
    16. An explanation as to why the applicant does not satisfy the treaty conditions for relief under Article 10(3)(a) or (b) and needs to seek the determination from the Competent Authority.
    17. Details of the commercial purpose for a creation or assignment of the shares or other rights for which the dividend is paid.    
      • Including details of any tax benefit or tax saving that arises as a result.

    Competent Authority determination under Article 4(1) of the Multilateral Convention (the MLI)

    Australia’s tax treaty with New Zealand

    In recognition of the Single Economic Market (SEM) agenda between Australia and New Zealand, which seeks to create a seamless trans-Tasman business environment, and the fact that our respective tax systems and administrations are comparable and both are committed to adopting measures to address BEPS risks, the ATO and New Zealand Inland Revenue are in the process of formalising a practical administrative approach for Australia/New Zealand non-individual dual residents impacted by Article 4(1) of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI).

    This administrative approach will apply to non-individual dual residents that meet certain eligibility criteria. It will include appropriate carve outs and integrity rules to ensure it does not apply to arrangements involving tax avoidance. It represents a measured risk-based approach that seeks to provide certainty and minimise compliance costs for taxpayers. It will also enable each of the tax administrations to focus their resources on addressing tax avoidance arrangements that MLI Article 4(1) is designed to counter.

    It is envisaged that, at this stage, this practical administrative process will only be implemented between Australia and New Zealand. The process will not apply to Australia’s other tax treaties modified by Article 4(1) of the MLI (refer below).

    Once finalised the eligibility criteria and further guidance will be published on this webpage.

    Australia’s other tax treaties

    Non-individual taxpayers that are dual residents under Australia’s other tax treaties which are modified by Article 4(1) of the MLI (excluding Australia’s treaty with New Zealand) will need to apply to either Competent Authority for a determination of their residency for the purposes of the treaty.

    You can lodge an application for a determination via the APA/MAP Program Management Unit (see Next Step). A list of required supporting documentation is being finalised and taxpayers are encouraged to regularly check this webpage for updates. Taxpayers can also subscribe to ATO website update alerts here.

    Next step:

    • Mail your application to:

    APA/MAP Program Management Unit
    Public Groups and International
    Australian Taxation Office
    GPO Box 9977

    You should be aware that the internet is not a secure environment. We do not control the path of inbound and outbound emails, so the privacy of personal information sent by email cannot be guaranteed. You should be aware of this risk if you choose email to communicate with the ATO and those communications include your personal details.

    See also:

      Last modified: 18 Dec 2018QC 53148