Document ID: chunk:federal_register_of_legislation:C2004A00987:schedule:2a:p5
Version: federal_register_of_legislation:C2004A00987
Segment Type: schedule
Provision Reference: sch 2A (pt 5/14)
Character Range: 64107–66709

a company's undistributed profits, except as provided in paragraph (8), even if the dividends paid consist wholly or partly of profits or income arising in such other State.
(8) A company which is a resident of one of the Contracting States and that has a permanent establishment in the other State or that is subject to tax in the other State on a net basis on its income or gains that may be taxed in the other State under Article 6 (Income from Real Property) or under paragraph (1) or (3) of Article 13 (Alienation of Property) may be subject in that other State to a tax in addition to the tax allowable under the other provisions of this Convention. Such tax, however, may be imposed on only the portion of the business profits of the company attributable to the permanent establishment and the portion of the income or gains referred to in the preceding sentence that is subject to tax under Article 6 (Income from Real Property) or under paragraph (1) or (3) of Article 13 (Alienation of Property) that, in the case of the United States, represents the dividend equivalent amount of such profits, income or gains and, in the case of Australia, is an amount that is analogous to the dividend equivalent amount. This paragraph shall not apply in the case of a company which:
    (a) is a qualified person by reason of sub‑paragraph (c) of paragraph (2) of Article 16 (Limitation on Benefits) of this Convention; or
    (b) is entitled to benefits with respect to the dividends under paragraph (5) of that Article.
(9) The tax referred to in paragraph (8) may not be imposed at a rate in excess of the rate specified in sub‑paragraph (a) of paragraph (2).".

ARTICLE 7
Article 11 of the Convention is omitted and the following Article is substituted:
"ARTICLE 11
Interest
(1) Interest arising in one of the Contracting States, being interest to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.
(2) However, that interest may also be taxed in the Contracting State in which it arises, and according to the law of that State, but the tax so charged shall not exceed 10 percent of the gross amount of the interest.
(3) Notwithstanding paragraph (2), interest arising in one of the Contracting States to which a resident of the other Contracting State is beneficially entitled may not be taxed in the first‑mentioned State if:
    (a) the interest is derived by one of the Contracting States or by a political or administrative sub‑division or a local authority thereof, or by any other body exercising governmental functions in a Contracting