DT2709 - DT: Australia: old agreement, Article 10: Royalties

This agreement applies up to 5th April 2004 for UK income and capital gains tax, up to 31st March 2004 for UK Corporation tax and up to 30th June 2004 for Australian taxes 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.

(10)(1) The United Kingdom tax on royalties derived and beneficially owned by an Australian resident shall not exceed 10 per cent of the gross amount of the royalties.

(2) The Australian tax on royalties derived and beneficially owned by a United Kingdom resident shall not exceed 10 per cent of the gross amount of the royalties.

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

(4) Royalties paid by a company which is a resident of one of the territories to a resident of the other territory shall not be treated as a distribution of or a dividend from that company. The preceding sentence shall not apply to royalties paid to a company which is a resident of one of the territories where -

(a) the same persons participate directly or indirectly in the management or control of the company paying the royalties and the company deriving the royalties; and

(b) more than 50 per cent of the voting power in the company deriving the royalties is controlled, directly or indirectly, by a person resident in the other territory.

(5) In this Article the term 'royalties' means payments of any kind to the extent to which they are paid as consideration for the use of, or the right to use any copyright, patent, design or model, plan, secret formula or process, trademark, or other like property or right, or industrial, commercial or scientific equipment, or for the supply of scientific, technical, industrial or commercial knowledge, information or assistance, and includes any payments of any kind to the extent to which they are paid as consideration for the use of, or the right to use, motion picture films, films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but does not include royalties or other amounts paid in respect of the operation of mines or quarries or of the extraction or removal of natural resources.

(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 royalties 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.