Document ID: chunk:federal_register_of_legislation:C2004A04052:schedule:29:p39
Version: federal_register_of_legislation:C2004A04052
Segment Type: schedule
Provision Reference: sch 29 (pt 39/64)
Character Range: 98180–100654

resident of Australia which, under any one or more of Articles 6 to 8, Articles 10 to 19 and Article 21, may be taxed in Sri Lanka shall for the purposes of paragraph (1) of Article 23 and of the law of Australia relating to Australian tax be deemed to be income from sources in Sri Lanka.

SCHEDULE 2—continued

ARTICLE 23

Methods of Elimination of Double Taxation

(1) Subject to the provisions of the law of Australia from time to time in force which relate to the allowance of a credit against Australian tax of tax paid in a country outside Australia (which shall not affect the general principle hereof), Sri Lanka tax paid under the law of Sri Lanka and in accordance with this Agreement, whether directly or by deduction, in respect of income derived by a person who is a resident of Australia from sources in Sri Lanka (including, in the case of a dividend paid by a company which is a resident of Sri Lanka and is not a resident of Australia to a company which is a resident of Australia and which controls directly or indirectly at least 10 per cent of the voting power of the first-mentioned company, the Sri Lanka tax paid by the company in respect of profits out of which the dividend is paid) shall be allowed as a credit against Australian tax payable in respect of that income.

     (2) (a) For the purposes of paragraph (1), Sri Lanka tax paid shall include an amount equivalent to the amount of any Sri Lanka tax forgone.

      (b) For the purposes of the law of Australia relating to Australian tax, an amount of income referred to in paragraph (3) shall be increased by the amount of any Sri Lanka tax forgone in respect of that income.

(3) For the purposes of paragraph (2), the term "Sri Lanka tax forgone" means an amount which, under the laws of Sri Lanka and in accordance with this Agreement, would have been payable as Sri Lanka tax on income but for any exemption from, or reduction of, Sri Lanka tax on that income in accordance with those provisions of the law of Sri Lanka relating to Sri Lanka tax which are agreed in letters exchanged from time to time between the Treasurer of Australia and the Minister of Finance and Planning of Sri Lanka for the purposes of this paragraph.

(4) Paragraphs (2) and (3) shall apply only in relation to income derived in the first five years of income in relation to which this Agreement has effect by virtue of sub-paragraph (a) (ii) of Article 27 and in any later years of income that may be agreed