AUSTRALIAN TAX TREATIES

New Zealand Convention  

CONVENTION BETWEEN AUSTRALIA AND NEW ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND FRINGE BENEFITS AND THE PREVENTION OF FISCAL EVASION  

CHAPTER II - DEFINITIONS  

ARTICLE 4   Resident  

1.  
For the purposes of this Convention, the term " resident of a Contracting State " means any person who, under the laws of that State, is liable to tax as a resident of that State, and also includes that State and any political subdivision or local authority of that State. This term however, does not include any person who is liable to tax in that State in respect only of income from sources in that State.

2.  
Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then their status shall be determined as follows:


a) the individual shall be deemed to be a resident only of the State in which a permanent home is available to that individual; but if a permanent home is available in both States, or in neither of them, that individual shall be deemed to be a resident only of the State with which the individual ' s personal and economic relations are closer (centre of vital interests);


b) if the State in which the centre of vital interests is situated cannot be determined, the individual shall be deemed to be a resident only of the State in which that individual has an habitual abode;


c) if the individual has an habitual abode in both States or in neither of them, the individual shall be deemed to be a resident only of the State of which that individual is a national.

3.  
[ ATO Notation: REPLACED by paragraph 1 of Article 4 and subparagraph e) of paragraph 3 of Article 4 of the MLI] Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated. If the State in which the place of effective management is situated cannot be determined, or the place of effective management is in neither State, then the competent authorities of the Contracting States shall endeavour to determine by mutual agreement in accordance with Article 25 the Contracting State of which the person shall be deemed to be a resident for the purposes of the Convention, having regard to its places of management, the place where it is incorporated or otherwise constituted and any other relevant factors. In the absence of such agreement, such person shall not be entitled to any relief or exemption from tax provided by this Convention.

4.  
Where an item of income, profits or gains derived by an individual is exempt from tax in New Zealand by reason only of the status of that individual as a transitional resident under the laws of New Zealand, no relief or exemption from tax shall be available under this Convention in Australia in respect of that item of income, profits or gains.

5.  
Notwithstanding paragraph 3 of this Article, where by reason of paragraph 1 of this Article a company, which is a participant in a dual listed company arrangement, is a resident of both Contracting States then it shall be deemed to be a resident only of the Contracting State in which it is incorporated, provided it has its primary stock exchange listing in that State.

6.  
The term " dual listed company arrangement " as used in this Article means an arrangement pursuant to which two companies that are listed on a stock exchange specified in subsubparagraphs 1 l)(i) and (ii) of Article 3 respectively, while maintaining their separate legal entity status, shareholdings and listings, align their strategic directions and the economic interests of their respective shareholders through:


a) the appointment of common (or almost identical) boards of directors, except where the effect of the relevant regulatory requirements prevents this;


b) management of the operations of the two companies on a unified basis;


c) equalised distributions to shareholders in accordance with an equalisation ratio applying between the two companies, including in the event of a winding up of one or both of the companies;


d) the shareholders of both companies voting in effect as a single decision-making body on substantial issues affecting their combined interests; and


e) cross-guarantees as to, or similar financial support for, each other ' s material obligations or operations, except where the effect of the relevant regulatory requirements prevents such guarantees or financial support.

7.  
Notwithstanding the other provisions of this Convention, a managed investment trust which receives income (including profits and gains) arising in New Zealand shall be treated, for the purposes of applying the Convention to such income, as an individual resident of Australia and as the beneficial owner of the income it receives, but only to the extent that residents of Australia are the owners of the beneficial interests in the managed investment trust. However, if:


a) the managed investment trust has its principal class of units listed on a stock exchange specified in subsubparagraph 1 l)(i) of Article 3 and is regularly traded on one or more recognised stock exchanges; or


b) at least 80 per cent of the value of the beneficial interests in the managed investment trust is owned by residents of Australia,

the managed investment trust shall be treated as an individual resident of Australia and as the beneficial owner of all the income it receives.




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