What do Australia's tax treaties aim to do?

Generally, Australia's tax treaties operate to:

  • keep the right to tax certain classes of income entirely for the income earner's country of residence
  • ensure that all other income may be taxed in the country in which the income is earned
  • specify rules to resolve conflicting claims about the residential status of a taxpayer and the source of income
  • provide an avenue for a taxpayer to present a case to the relevant tax authorities if they believe the tax treatment has not been in accordance with the terms of a tax treaty – Mutual agreement procedures
  • provide for the allocation of profits between related parties on an arm's length basis
  • generally preserve the application of domestic law rules that are designed to address transfer pricing and other international avoidance practices
  • provide avenues for exchange of information between tax authorities.
    Last modified: 13 Aug 2014QC 17925