| Disclaimer This edited version will be removed from the Database after 30 September 2025. If you believe the issues detailed in this edited version warrant retention in an alternative form, email publicguidance@ato.gov.au This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011569835826
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Australian taxation implications of proposed lease transactions
The ruling concerned the following:
1. Will country X lessor be treated as residents of the country X for the purposes of the country X Double Tax Agreement?
2. Will country X lessor be liable to pay income tax on the rent payable by the lessee to country X lessor under the proposed lease agreement pursuant to subsection 128B(5A) of the Income Tax Assessment Act 1936 (ITAA 1936)?
3. Will country X lessor be treated as having a permanent establishment in Australia for the purposes of the country X Convention and accordingly have a liability for Australian income tax in respect of the rent income?
4. Will Australian withholding tax apply to interest payable by country X lessor to country X financier under the finance lease pursuant to subparagraph 128B(2)(b)(ii) of the ITAA 1936?
5. Will Part IVA (including section 177CA) of the ITAA 1936 apply to the proposed lease transactions?
The Commissioner ruled that:
1. Yes, the country X lessor will be treated as residents of the country X for the purposes of the country X Double Tax Agreement.
2. No, the country X lessor will not be liable to pay income tax on the rent payable by the lessee to country X lessor under the proposed lease agreement pursuant to subsection 128B(5A) of the ITAA 1936.
3. No, the country X lessor will not be treated as having a permanent establishment in Australia for the purposes of the country X Convention and accordingly have a liability for Australian income tax in respect of the rent income.
4. No, the Australian withholding tax will not apply to interest payable by country X lessor to country X financier under the finance lease pursuant to subparagraph 128B(2)(b)(ii) of the ITAA 1936.
5. No, Part IVA (including section 177CA) of the ITAA 1936 will not apply to the proposed lease transactions.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
