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 the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principles of this Article), Slovak tax paid under the law of the Slovak Republic and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in the Slovak Republic shall be allowed as a credit against Australian tax payable in respect of that income. 2.
Where a company which is a resident of the Slovak Republic and is not a resident of Australia for the purposes of Australian tax pays a dividend to a company which is a resident of Australia and which controls directly or indirectly not less than 10 per cent of the voting power of the firstmentioned company, the credit referred to in paragraph 1 shall include the Slovak tax paid by that firstmentioned company in respect of that portion of its profits out of which the dividend is paid. 3.
In the Slovak Republic, double taxation will be avoided in the following manner: the Slovak Republic, when imposing taxes on its residents, may include in the tax base upon which such taxes are imposed the items of income which according to the provisions of this Agreement may also be taxed in Australia, but shall allow as a deduction from the amount of tax computed on such a base an amount equal to the tax paid in Australia. Such deduction shall not, however, exceed that part of the Slovak tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of this Agreement, may also be taxed in Australia.
The following paragraph 2 of Article 3 of the MLI applies and supersedes the provisions of this Agreement:
ARTICLE 3 OF THE MLI - TRANSPARENT ENTITIES
[Article 23 of the Agreement] shall not apply to the extent that the provisions of [the Agreement] allow taxation by that other [Contracting State] solely because the income is also income derived by a resident of that other [Contracting State].
For information on the status and effect of the ATO Notation, see Status of the ATO Notations above.