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.
In Australia, double taxation shall be relieved as follows:
a) subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle of this Article), Chilean tax paid under the law of Chile and in accordance with this Convention, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia shall be allowed as a credit against Australian tax payable in respect of that income; and
b) in the case of income referred to in Article 10, Chilean tax paid shall, for purposes of subparagraph a) of this paragraph, refer to the amount of the Additional Tax after the First Category Tax is deducted, or 15 per cent of the amount on which the Additional Tax is calculated, whichever is the lesser.
2.
In Chile, double taxation shall be relieved as follows:
Residents in Chile, obtaining income which has, in accordance with the provisions of this Convention, been subject to taxation in Australia, may credit the tax so paid against any Chilean tax payable in respect of the same income, subject to the applicable provisions of the law of Chile (which shall not affect the general principle of this Article). This paragraph shall apply to all income referred to in this Convention.
3.
Where, in accordance with any provision of the Convention, income derived by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on other income, take into account the exempted income.
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