AUSTRALIAN TAX TREATIES

Japanese Convention  

CONVENTION BETWEEN AUSTRALIA AND JAPAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME  

ARTICLE 4   Resident  

(1)  
For the purposes of this Convention, the term " resident of a Contracting State " means:


(a) in the case of Japan, any person who, under the laws of Japan, is liable to tax therein by reason of the person ' s domicile, residence, place of head or main office, or any other criterion of a similar nature; and


(b) in the case of Australia, a person who is a resident of Australia for the purposes of Australian tax.

The Government of a Contracting State or a political subdivision or local authority thereof is also a resident of that Contracting State for the purposes of the Convention. A person is not a resident of a Contracting State for the purposes of the Convention if the person is liable to tax in that Contracting State in respect only of income from sources in that Contracting State.

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


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


(b) if the Contracting State in which the individual ' s centre of vital interests is situated cannot be determined, the individual shall be deemed to be a resident only of the Contracting State of which that individual is a national;


(c) if the individual is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall endeavour to resolve the question by mutual agreement.

(3)  
[ ATO Notation: REPLACED by paragraph 1 and subparagraph e) of paragraph 3 of Article 4 of the MLI] [1]

Refer to text box immediately after paragraph 4 of Article 4 of the Convention.

Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of this Convention, having regard to the place of its head or main office, its place of effective management and any other relevant factors.

(4)  
[ ATO Notation: REPLACED by paragraph 1 and subparagraph e) of paragraph 3 of Article 4 of the MLI, but only to the extent that this paragraph applies to a person other than an individual] In the absence of a mutual agreement under subparagraph (c) of paragraph 2 or paragraph 3 a person who is a resident of both Contracting States by reason of the provisions of paragraph 1 shall not be considered a resident of either Contracting State for the purposes of claiming any benefits provided by this Convention, except those provided by Articles 26 and 27.

(5)  
For the purposes of applying this Convention:


(a) an item of income, profits or gains:


(i) derived from a Contracting State through an entity that is organised in the other Contracting State; and

(ii) treated as the income, profits or gains of the beneficiaries, members or participants of that entity under the tax law of that other Contracting State,
shall be eligible for the benefits of the Convention that would be granted if it were directly derived by a beneficiary, member or participant of that entity who is a resident of that other Contracting State, to the extent that such beneficiaries, members or participants are residents of that other Contracting State and satisfy any other conditions specified in the Convention, without regard to whether the income, profits or gains are treated as the income, profits or gains of such beneficiaries, members or participants under the tax law of the first-mentioned Contracting State.


(b) an item of income, profits or gains:


(i) derived from a Contracting State through an entity that is organised in the other Contracting State; and

(ii) treated as the income, profits or gains of that entity under the tax law of that other Contracting State,
shall be eligible for the benefits of the Convention that would be granted to a resident of that other Contracting State, without regard to whether the income, profits or gains are treated as the income, profits or gains of the entity under the tax law of the first-mentioned Contracting State, if such entity is a resident of that other Contracting State and satisfies any other conditions specified in the Convention.


(c) an item of income, profits or gains:


(i) derived from a Contracting State through an entity that is organised in a state other than the Contracting States; and

(ii) treated as the income, profits or gains of the beneficiaries, members or participants of that entity under the tax law of the other Contracting State,
shall be eligible for the benefits of the Convention that would be granted if it were directly derived by a beneficiary, member or participant of that entity who is a resident of that other Contracting State, to the extent that such beneficiaries, members or participants are residents of that other Contracting State and satisfy any other conditions specified in the Convention, without regard to whether the income, profits or gains are treated as the income, profits or gains of such beneficiaries, members or participants under the tax law of the first-mentioned Contracting State or such state.


(d) an item of income, profits or gains:


(i) derived from a Contracting State through an entity that is organised in a state other than the Contracting States; and

(ii) treated as the income, profits or gains of that entity under the tax law of the other Contracting State,
shall not be eligible for the benefits of the Convention.


(e) an item of income, profits or gains:


(i) derived from a Contracting State through an entity that is organised in that Contracting State; and

(ii) treated as the income, profits or gains of that entity under the tax law of the other Contracting State,
shall not be eligible for the benefits of the Convention.



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