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  

(5)  
With reference to subparagraphs (b) and (c) of paragraph 4 of Article 5 (Permanent Establishment) of the Convention:


(a) It is understood that an enterprise of a Contracting State shall not be considered to operate equipment in the other Contracting State where the enterprise leases equipment under a lease contract that is solely for the provision of equipment, including a bareboat lease contract.


(b) It is understood that the factors of size, quantity or value of equipment or the role of equipment in income producing activities are relevant in determining whether the equipment is substantial on the basis of the facts and circumstances of each particular case.


(c) It is understood that the term " substantial equipment " may include:


(i) industrial earthmoving equipment or construction equipment used in road building, dam building or powerhouse construction;

(ii) manufacturing or processing equipment used in a factory; and

(iii) oil or drilling rigs, platforms and other structures used in the petroleum or mining industry.



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