Private ruling: Withholding tax and the application of Australia's double tax agreements
Date of advice: 17 March 2017
Published: May 2017
Ruling period: Year ending 30 June 201X | Year ending 30 June 201X | Year ending 30 June 201X
Date scheme commenced: May 201X

Ruling: Q1: Are all payments received by ForeignCo from AusCo under the Facility Agreement characterized as interest or in the nature of interest for Australian income tax purposes? | A1: No, only the payments made in accordance with Clause 9 of the Facility Agreement are 'interest' within the meaning of subsection 128A(1AB) of the ITAA 1936. | Q2: Does ForeignCo have a permanent establishment in Australia as defined in Article 5 of the Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1969] ATS 14, as amended by the Protocol amending the Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1990] ATS 3 (together, the X DTA )? | A2: No. | Q3: Is the payment received by ForeignCo from AusCo under Clause 8 of the Facility Agreement for the Shared Proceeds Amount subject to withholding tax pursuant to Division 11A of the ITAA 1936? | A3: No. | Q4: Is the payment received by ForeignCo from AusCo under Clause 8 of the Facility Agreement for the Shared Proceeds open to Australian tax under Articles 9 or 16A of the X DTA? | A4: No.


Relevant legislative provisions: Income Tax Assessment Act 1936 (ITAA 1936) subsection 6(1) ITAA 1936 Division 11A of Part III | ITAA 1936 subsection 128A(1AB) | ITAA 1936 subsection 128A(1AC) | ITAA 1936 subsection 128A(1AD) | ITAA 1936 section 128B | ITAA 1936 subsection 128B(2) | ITAA 1936 subparagraph 128B(3)(a)(ii) | ITAA 1936 subparagraph 128B(3)(h)(ii) | ITAA 1936 subsection 128B(5) | Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1969] ATS 14 | Protocol amending the Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of X for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [1990] ATS 3