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Edited version of your written advice
Authorisation Number: 1051264242743
Date of advice: 08 August 2017
Ruling
Subject: Article 7(1) of the Country A Agreement
Question 1
Does the shipping and aircraft Article of the relevant Double Tax Agreement apply to the Arrangement to allocate taxing rights to the other State?
Answer
Yes
Question 2
Will the income derived by the entity for the services in Australia be treated as 'ordinary income’ under subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
No
Question 3
Is the Arrangement subject to Australian withholding tax based on domestic legislation, and application of the Country A Agreement?
Answer
No
This ruling applies for the following periods:
1 July 2016 to 30 June 2017
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You are operating a ship transporting goods through international waters and into Australian waters (the Arrangement).
The lease of the ships is on a full basis in both international and Australian waters.
Reasons for decision
The Commissioner confirmed that the ship and aircraft article of the relevant Double Tax Agreement applies to the Arrangement such that the other State maintains sole taxing rights over profits from the Arrangement.
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