DT2708 - DT: Australia: old agreement, Article 9: Interest

This Agreement applied up to 30th June 2004 for Australian and UK withholding taxes. For later periods the new Agreement applies. This can be accessed via the page Tax Treaties – in force http://www.hmrc.gov.uk/international/in_force.htm.

(9)(1) The United Kingdom tax on interest (on bonds, securities, debentures, or on any other form of indebtedness) derived and beneficially owned by an Australian resident shall not exceed 10 per cent of the gross amount of the interest.

(2) The Australian tax on interest (on bonds, securities, debentures, or on any other form of indebtedness) derived and beneficially owned by a United Kingdom resident shall not exceed 10 per cent of the gross amount of the interest.

(3) Paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the interest, being a resident of one of the territories, has in the other territory a permanent establishment and the indebtedness giving rise to the interest is effectively connected with a trade or business carried on through that permanent establishment.

(4) Any provision in the law of either of the territories relating only to interest paid to a non-resident company shall not operate so as to require such interest paid to a company which is a resident of the other territory to be treated as a distribution of or a dividend from the company paying such interest. The preceding sentence shall not apply to interest paid to a company which is a resident of one of the territories in which more than 50 per cent. of the voting power is controlled, directly or indirectly, by a person resident in the other territory.

(5) Paragraphs (1) and (2) of this Article shall not apply to interest on any form of debt- claim dealt in on a stock exchange where the beneficial owner of the interest -

(a) is not subject to tax in respect thereof in the territory of which it is a resident; and

(b) sells (or makes a contract to sell) the debt-claim from which such interest is derived within three months of the date on which such beneficial owner acquired such debt-claim.

(6) Where, owing to a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest paid exceeds the amount which would have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.