Document ID: chunk:federal_register_of_legislation:C2008A00111:schedule:42a:p6
Version: federal_register_of_legislation:C2008A00111
Segment Type: schedule
Provision Reference: sch 42A (pt 6/16)
Character Range: 14454–17098

The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident through a permanent establishment situated in that other State, or performs in that other State independent personal services from a fixed base situated in that other State, and the holding in respect of which the dividends are paid is effectively connected with that permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

    5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company — being dividends beneficially owned by a person who is not a resident of the other Contracting State — except insofar as the holding in respect of which such dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State. This paragraph shall not apply in relation to dividends paid by any company which is a resident of Australia for the purposes of Australian tax and which is also a resident of South Africa for the purposes of South African tax.

    6. Notwithstanding any other provisions of the Agreement, where a company which is a resident of a Contracting State has a permanent establishment in the other Contracting State, that other State may tax the profits attributable to the permanent establishment at a rate not exceeding by more than 5 percentage points:

         (a) in the case of Australia, the rate of income tax payable on the profits of a company which is resident of Australia; and

         (b) in the case of South Africa, the rate of normal tax payable on the profits of a company which is resident of South Africa.

    7. No relief shall be available under this Article if it was the main purpose or one of the main purposes of any person concerned with assignment of the dividends, or the creation or assignment of the shares or other rights in respect of which the dividend is paid, to take advantage of this Article by means of that creation or assignment."

ARTICLE 6

Article 11 of the Agreement is omitted and the following Article is substituted:

"Article 11

Interest

    1.