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.
Subject to the provisions of paragraph 2 of Article 18, pensions and annuities paid to a resident of a Contracting State shall be taxable only in that State. 2.
The term " annuity " means any stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money ' s worth. 3.
Notwithstanding anything in this Convention, any pension or allowance that is paid by a Contracting State in respect of wounds, disabilities or death caused by war, or in respect of war service, and is exempt from tax under the law of that State, to a resident of the other Contracting State shall be exempt from tax in that other State. 4.
(a) Contributions borne by an individual who is a resident of a Contracting State, and who renders services in the course of an employment in that State, to a pension scheme established and recognised for tax purposes in the other Contracting State shall, in determining the individual ' s tax payable, be treated in the first-mentioned State in the same way and subject to the same conditions and limitations as contributions made to a pension scheme that is recognised for tax purposes in that State, provided that:
(i) the individual was not a resident of that State, and was participating in the pension scheme, immediately before beginning to exercise employment in that State; and
(ii) the pension scheme is accepted by the competent authority of that State as generally corresponding to a pension scheme recognised as such for tax purposes by that State.
(b) For the purposes of subparagraph (a):
(i) the term " a pension scheme " means an arrangement in which the individual participates in order to secure retirement benefits payable in respect of the services referred to in subparagraph (a); and
(ii) a pension scheme is " recognised for tax purposes " in a State if the contributions to the scheme would qualify for tax relief in that State.