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.
Income, profits or gains derived by a resident of a Contracting State from the alienation of real property (immovable property) situated in the other Contracting State may be taxed in that other State. 2.
Income, profits or gains from the alienation of property, other than real property, that forms part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or pertains to a fixed base available in that other State to a resident of the firstmentioned State for the purpose of performing independent personal services, including income, profits or gains from the alienation of that permanent establishment (alone or with the whole enterprise) or of that fixed base, may be taxed in that other State. 3.
Income, profits or gains from the alienation of ships or aircraft operated in international traffic, or of property (other than real property) pertaining to the operation of those ships or aircraft, shall be taxable only in the Contracting State of which the enterprise which operated those ships or aircraft is a resident. 4.
[ ATO Notation: MODIFIED by subparagraph a) of paragraph 1 of Article 9 of the MLI] Income, profits or gains derived by a resident of a Contracting State from the alienation of any shares or other interests in a company, or of an interest of any kind in a partnership, trust or other entity, where the value of the assets of such entity is principally attributable to real property situated in the other Contracting State, may be taxed in that other State. The value of the assets of such entity can be held directly or indirectly, through one or more interposed entities, such as, for example, through a chain of companies.
The following subparagraph a of paragraph 1 of Article 9 of the MLI applies to paragraph 4 of Article 13 of this Agreement:
ARTICLE 9 OF THE MLI - CAPITAL GAINS FROM ALIENATION OF SHARES OR INTERESTS OF ENTITIES DERIVING THEIR VALUE PRINCIPALLY FROM IMMOVABLE PROPERTY
[Paragraph 4 of Article 13 of the Agreement] shall apply if the relevant value threshold is met at any time during the 365 days preceding the alienation.
For information on the status and effect of the ATO Notation, see Status of the ATO Notations above.
Nothing in this Agreement affects the application of a law of a Contracting State relating to the taxation of gains of a capital nature derived from the alienation of any property other than that to which any of the preceding paragraphs of this Article apply. 6.
In this Article, the term " real property " has the same meaning as it has in Article 6. 7.
The situation of real property shall be determined for the purposes of this Article in accordance with the provisions of paragraph 3 of Article 6.
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