Document ID: chunk:federal_register_of_legislation:C2004A01208:clause:1_4:p19
Version: federal_register_of_legislation:C2004A01208
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 19/22)
Character Range: 80024–82994

or credits" shall not include the recording of internal transactions between a permanent establishment and another part of the same enterprise;

    (d) the expression "any provision of the laws of a Contracting State which is designed to prevent the avoidance or evasion of taxes" includes:

       (i) measures designed to address thin capitalisation, dividend stripping and transfer pricing;

       (ii) controlled foreign company, transferor trust and foreign investment fund rules;

       (iii) measures designed to ensure that taxes can be effectively recovered (conservancy measures); and

    (e) nothing in the Convention shall be construed as restricting, in any manner, the application of any provision of the laws of a Contracting State which is designed to prevent the avoidance or evasion of taxes.

2. With reference to Article 5 (Permanent establishment),

the Contracting States agree that the term "permanent establishment" fully encompasses the concept of a "fixed base" used in other double tax treaties in the context of independent personal services.

3. With reference to Article 7 (Business profits),

the Contracting States agree that:

    (a) nothing in paragraph 3 of the Article shall permit the deduction of an expense which would not be deductible if the permanent establishment were an independent enterprise which incurred the expense; and

    (b) where:

       (i) a resident of a Contracting State is beneficially entitled, whether directly or through one or more interposed trust estates, to a share of the business profits of an enterprise carried on in the other Contracting State by the trustee of a trust estate other than a trust estate which is treated as a company for tax purposes; and

       (ii) in relation to that enterprise, that trustee would, in accordance with the principles of Article 5, have a permanent establishment in that other State,

     the enterprise carried on by the trustee shall be deemed to be a business carried on in the other State by that resident through a permanent establishment situated in that other State and that share of business profits shall be attributed to that permanent establishment.

4. With reference to Article 9 (Associated enterprises),

the Contracting States note that the expression "dealing wholly independently with one another" is included in paragraph 1 of the Article to conform to Australia's consistent treaty practice and to address Australia's concerns that the appropriate benchmark for determining the conditions operating between the associated enterprises should have regard to whether those dealings between the enterprises occurred on a truly independent basis.

5. With reference to Article 10 (Dividends),

the Contracting States agree that if the relevant law in either Contracting State at the date of signature of the Convention is varied otherwise than in minor respects so as not to affect its general character, the Contracting States shall