Private ruling: Article 7(1) of the Country A Agreement
Date of advice: 8 August 2017
Published: November 2017
Ruling period: 1 July 2016 to 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Does the shipping and aircraft Article of the relevant Double Tax Agreement apply to the Arrangement to allocate taxing rights to the other State? | A1: Yes | Q2: Will the income derived by the entity for the services in Australia be treated as 'ordinary income’ under subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: No | Q3: Is the Arrangement subject to Australian withholding tax based on domestic legislation, and application of the Country A Agreement? | A3: No

Relevant facts and circumstances: You are operating a ship transporting goods through international waters and into Australian waters (the Arrangement). The lease of the ships is on a full basis in both international and Australian waters.


Reasons for decision: Summary: The Commissioner confirmed that the ship and aircraft article of the relevant Double Tax Agreement applies to the Arrangement such that the other State maintains sole taxing rights over profits from the Arrangement.