Double Taxation Agreement Australia Japan
Excellence: I have the honour of referring to the agreement signed today between Japan and Australia to avoid double taxation and the prevention of tax evasion with respect to income taxes (hereafter referred to as the “convention”) and to the protocol signed today, which is an integral part of the convention, and on behalf of the Government of Japan, the following proposals:1. It is understood that the two States Parties cooperate to avoid double taxation through the proper application of the provisions of the Convention and other necessary measures (2). Referring to Article 9 (associated companies) of the agreement, the two States Parties are deemed to commit to carrying out controls on business transfer prices and assessing requests for early pricing agreements in accordance with the transfer pricing guidelines for multinational companies and the tax administrations of the Organisation for Economic Co-operation and Development (`OECD guidelines on transfer prices`). reflect the international consensus on these issues. The national transfer pricing rules, including transfer pricing methods, of each contracting state can only be applied for the purposes of resolving transfer prices under the agreement to the extent that they comply with OECD transfer pricing guidelines. His Excellency, Hon. Stephen Smith, Minister of Foreign Affairs of Australia3. In view of Article 10, paragraph 3 (dividends) and paragraph (a) of Article 23, paragraph 3 (limitation of benefits) of the agreement, it is considered that the date on which the right to dividends is determined is: (a) in the case of Japan, the end of the settlement period for which the distribution of profits takes place; or b) in the case of Australia, the date of the dividends. If the above agreements are acceptable to the Australian government, I have the honour of proposing that this note and Your Excellency`s response on this matter be considered an agreement between the two governments on this issue, which will come into force at the same time as the Convention.
I take this opportunity to give Your Excellency the assurance of my highest esteem. Most tax treaties include a “Tiebreaker” exam in which a dual resident is considered only a resident of one of the two tax regulations. 1. Where a person believes that the actions of one or both of the contracting states occur or are for the person who does not meet the provisions of this Convention, the person may, regardless of the remedies provided by the domestic law of those contracting states, the competent authority of the State party, whose resident or, if the case falls under Article 26 , paragraph 1, whose nationality is the person. The case must not be submitted within three years of the first notification of the measure leading to taxation, in accordance with the provisions of the Convention (2). The competent authority endeavours to resolve the matter by mutual agreement with the competent authority of the other State party if the request is found to be justified and does not itself reach a satisfactory solution to resolve the matter in agreement with the competent authority of the other contracting State, in order to avoid an imposition that is not in accordance with this Convention. Any agreement reached will be implemented in the domestic law of the States Parties, regardless of the time limit.3 The competent authorities of the contracting states try to resolve by mutual agreement any difficulty or doubt about the interpretation or application of this convention.