Document ID: chunk:federal_register_of_legislation:C2008A00102:schedule:6:p36
Version: federal_register_of_legislation:C2008A00102
Segment Type: schedule
Provision Reference: sch 6 (pt 36/39)
Character Range: 90500–93227

overall profits.

15.  With reference to paragraph 4 of Article 11 (Interest) of the Convention:

It is understood that the term "arrangement involving back‑to‑back loans" would cover, inter alia, any kind of arrangement structured in such a way that a financial institution which is a resident of a Contracting State receives interest arising in the other Contracting State and the financial institution pays an equivalent interest to another person who is a resident of the first‑mentioned Contracting State and, if it received the interest directly from the other Contracting State, would not be entitled to the exemption from tax with respect to that interest in that other Contracting State.

16.  With reference to paragraph 3 of Article 12 (Royalties) of the Convention:

The term "royalties" shall not include payments for the use of spectrum licences.  The provisions of Article 7 of the Convention shall apply to such payments.

17.  With reference to subparagraph e) of paragraph 3 of Article 12 (Royalties) of the Convention:

It is understood that the term "forbearance in respect of the use or supply of any property or right" applies to cases where the holder of any property or right receives a payment or provides credits, as consideration, for not making such property or right available to another person.

18.  With reference to paragraph 3 of Article 13 (Alienation of Property) of the Convention:

It is understood that where, in the case of schemes of reorganisation of companies, the laws of a Contracting State allow for the taxation of the gains arising from the disposal of shares in a company to be deferred, such gains shall be regarded as subject to tax unless any part of the deferred gains is as a result of a later disposal or reorganisation subject to a statutory exemption under the laws of that Contracting State.

19.  With reference to paragraph 1 of Article 25 (Elimination of Double Taxation) of the Convention:

For the purposes of the paragraph, the income tax and the petroleum resource rent tax referred to in subparagraph b) of paragraph 1 of Article 2 of the Convention shall be treated as a unified tax on income.

20.  With reference to Article 26 (Non‑Discrimination) of the Convention:

The provisions of the Article shall not apply to the following provisions of the laws of Australia:

a)  Subdivision A of Division 3 of Part III of the Income Tax Assessment Act 1936 (hereinafter referred to as "ITAA 1936"), which provides deductions to eligible taxpayers for research and development;

b)  Section 26‑25 of Part 2‑5 of Chapter 2 of the Income Tax Assessment Act 1997 (hereinafter referred to as "ITAA 1997"), which provides measures to ensure that taxes can be effectively