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Act No. 96 of 1991 as made
An Act to amend the Income Tax (International Agreements) Act 1953
Administered by: Treasury
Date of Assent 26 Jun 1991
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016
 

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96, 1991

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - LONG TITLE

An Act to amend the Income Tax (International Agreements) Act 1953

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SECT 1
Short title etc.

(Assented to 26 June 1991)
1. (1) This Act may be cited as the Income Tax (International Agreements) Amendment Act 1991.
(2) In this Act, "Principal Act" means the Income Tax (International Agreements) Act 1953.*1*

(Minister's second reading speech made in-
House of Representatives on 18 April 1991
Senate on 16 May 1991)
*1* No. 82, 1953, as amended. For previous amendments, see No. 25, 1958; No. 88, 1959; Nos. 19 and 29, 1960; No. 71, 1963; No. 112, 1964; No. 105, 1965; No. 17, 1966; Nos. 39 and 86, 1967; No. 3, 1968; No. 24, 1969; No. 48, 1972; Nos. 11 and 216, 1973; No. 129, 1974; No. 119, 1975; Nos. 52, 55 and 143, 1976; No. 134, 1977; No. 87, 1978; Nos. 23 and 127, 1980; Nos. 28, 110, 143 and 154, 1981; Nos. 51 and 57, 1983; Nos. 123 and 125, 1984; Nos. 168 and 173, 1985; Nos. 49, 51 and 112, 1986; No. 165, 1989; No. 121, 1990; and No. 5, 1991.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SECT 2
Commencement

2. This Act commences on the day on which it receives the Royal Assent.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SECT 3
Interpretation

3. Section 3 of the Principal Act is amended by inserting in subsection (1) the following definitions:
" `the Hungarian agreement' means the Agreement between Australia and the Republic of Hungary for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, being the agreement a copy of which in the English language is set out in Schedule 33;
`the Kiribati agreement' means the Agreement between Australia and the Republic of Kiribati for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, being the agreement a copy of which is set out in Schedule 34;".

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SECT 4

4. Before section 16 of the Principal Act the following sections are inserted:

Agreement with the Republic of Hungary
"11X. Subject to this Act, on and after the date of entry into force of the Hungarian agreement, the provisions of the agreement, so far as those provisions affect Australian tax, have the force of law according to their tenor.

Agreement with Kiribati
"11Y. Subject to this Act, on and after the date of entry into force of the Kiribati agreement, the provisions of the agreement, as far as those provisions affect Australian tax, have the force of law according to their tenor.".

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SECT 5
Schedules 33 and 34

5. The Principal Act is amended by adding at the end the Schedules set out in the Schedule to this Act.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1991 No. 96 of 1991 - SCHEDULE

SCHEDULE Section 5

SCHEDULES TO BE ADDED AT THE END OF THE PRINCIPAL ACT
"SCHEDULE 33 Section 3
AGREEMENT BETWEEN AUSTRALIA AND THE REPUBLIC OF HUNGARY
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
Australia and the Republic of Hungary,
DESIRING to conclude an Agreement for the avoidance of
double taxation and the prevention of fiscal evasion with
respect to taxes on income, and to further develop and
facilitate their economic relations,
HAVE AGREED as follows:
ARTICLE 1
Personal Scope
This Agreement shall apply to persons who are residents of
one or both of the Contracting States.
ARTICLE 2
Taxes Covered
(1) The existing taxes to which this Agreement shall apply are:
(a) in Australia -

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the income tax, and the petroleum resource rent tax in
respect of offshore projects, imposed under the federal law
of the Commonwealth of Australia;
(b) in Hungary -
the income tax on individuals and the profit taxes, imposed
under the law of the Republic of Hungary.
(2) This Agreement shall also apply to any identical or
substantially similar taxes which are imposed under the
federal law of the Commonwealth of Australia or the law of
the Republic of Hungary after the date of signature of this
Agreement in addition to, or in place of, the existing taxes.
The competent authorities of the Contracting States shall
notify each other of any substantial changes which have been
made in the laws of their respective States relating to the
taxes to which this Agreement applies within a reasonable
period of time after such changes.
(3) In this Agreement, the terms "Australian tax" and
"Hungarian tax" do not include any penalty or interest
imposed under the law of either Contracting State relating to
the taxes to which this Agreement applies.
ARTICLE 3
General Definitions
(1) In this Agreement, unless the context otherwise requires:
(a) the term "Australia", when used in a geographical
sense, excludes all external territories other than:
(i) the Territory of Norfolk Island;
(ii) the Territory of Christmas Island;
(iii) the Territory of Cocos (Keeling) Islands;
(iv) the Territory of Ashmore and Cartier Islands;
(v) the Territory of Heard Island and McDonald Islands; and
(vi) the Coral Sea Islands Territory,
and includes any area adjacent to the territorial limits
of Australia (including the Territories specified in this
subparagraph) in respect of which there is for the time being
in force, consistently with international law, a law of
Australia dealing with the exploitation of any of the natural
resources of the seabed and subsoil of the continental shelf;
(b) the term "Hungary" when used in a geographical sense
means the territory of the Republic of Hungary;
(c) the terms "a Contracting State", "one of the
Contracting States" and "other Contracting State" mean
Australia or the Republic of Hungary, as the context requires;
(d) the term "person" includes an individual, a company
and any other body of persons;
(e) the term "company" means any body corporate or any entity
which is treated as a company or body corporate for tax purposes;
(f) the terms "enterprise of a Contracting State",
"enterprise of one of the Contracting States" and
"enterprise of the other Contracting State" mean an
enterprise carried on by a resident of Australia or an
enterprise carried on by a resident of the Republic of
Hungary, as the context requires;
(g) the term "tax" means Australian tax or Hungarian
tax, as the context requires;
(h) the term "Australian tax" means tax imposed by
Australia, being tax to which this Agreement applies by
virtue of Article 2;
(i) the term "Hungarian tax" means tax imposed by the
Republic of Hungary, being tax to which this Agreement
applies by virtue of Article 2;
(j) the term "competent authority" means, in the case of
Australia, the Commissioner of Taxation or an authorised
representative of the Commissioner and, in the case of the
Republic of Hungary, the Minister of Finance, or an
authorised representative of the Minister.
(2) In the application of this Agreement by a Contracting
State, any term not defined in this Agreement shall, unless
the context otherwise requires, have the meaning which it has
under the laws of that State from time to time in force
relating to the taxes to which this Agreement applies.
ARTICLE 4
Residence
(1) For the purposes of this Agreement, a person is a
resident of one of the Contracting States:
(a) in the case of Australia, if the person is a resident
of Australia for the purposes of Australian tax; and
(b) in the case of the Republic of Hungary, if the person
is liable to tax therein by reason of domicile, residence,
place of management or any other criterion of a similar nature.
(2) A person is not a resident of a Contracting State for the

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purposes of this Agreement if the person is liable to tax in
that State in respect only of income from sources in that State.
(3) Where by reason of the preceding provisions of this
Article a person, being an individual, is a resident of both
Contracting States, then the status of the person shall be
determined in accordance with the following rules:
(a) the person shall be deemed to be a resident solely of
the Contracting State in which a permanent home is available
to the person;
(b) if a permanent home is available to the person in both
Contracting States, or in neither of them, the person shall
be deemed to be a resident solely of the Contracting State
with which the personal and economic relations of the person
are the closer (centre of vital interests).
(4) Where by reason of the provisions of paragraph (1), a
person other than an individual is a resident of both
Contracting States, then it shall be deemed to be a resident
solely of the Contracting State in which its place of
effective management is situated.
ARTICLE 5
Permanent Establishment
(1) For the purposes of this Agreement, the term "permanent
establishment" means a fixed place of business or production
through which the activities of an enterprise are wholly or
partly carried on.
(2) The term "permanent establishment" shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other
place of extraction of natural resources;
(g) a farm or forest;
(h) a building site or construction, installation or
assembly project which exists for more than 12 months.
(3) An enterprise shall not be deemed to have a permanent
establishment merely by reason of:
(a) the use of facilities solely for the purpose of
storage, display or delivery of goods or merchandise
belonging to the enterprise; or
(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
storage, display or delivery; or
(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise; or
(d) the maintenance of a fixed place of business solely
for the purpose of purchasing goods or merchandise, or for
collecting information, for the enterprise; or
(e) the maintenance of a fixed place of business solely
for the purpose of activities which have a preparatory or
auxiliary character for the enterprise; or
(f) the maintenance of a fixed place of business solely
for any combination of activities mentioned in subparagraphs
(a) to (e), provided that the overall activity of the fixed
place of business resulting from this combination is of a
preparatory or auxiliary character.
(4) An enterprise shall be deemed to have a permanent
establishment in one of the Contracting States and to carry
on business through that permanent establishment if:
(a) it carries on supervisory activities in that State for
more than 12 months in connection with a building site, or a
construction, installation or assembly project which is being
undertaken in that State; or
(b) substantial equipment is being used in that State for
more than 12 months by, for or under contract with the
enterprise in, or in respect of, the exploration for or the
exploitation of natural resources, or in respect of
activities connected with such exploration or exploitation.
(5) A person acting in one of the Contracting States on
behalf of an enterprise of the other Contracting State -
other than an agent of an independent status to whom
paragraph (6) applies - shall be deemed to be a permanent
establishment of that enterprise in the first mentioned State
if the person has, and habitually exercises in that State, an
authority to conclude contracts on behalf of the enterprise,
unless the person's activities are limited to the purchase of
goods or merchandise for the enterprise.
(6) An enterprise of one of the Contracting States shall not

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be deemed to have a permanent establishment in the other
Contracting State merely because it carries on business in
that other State through a person who is a broker, general
commission agent or any other agent of an independent status
and is acting in the ordinary course of the person's business
as such a broker or agent.
(7) The fact that a company which is a resident of a
Contracting State controls or is controlled by a company
which is a resident of the other Contracting State, or which
carries on business in that other State (whether through a
permanent establishment or otherwise), shall not of itself
make either company a permanent establishment of the other.
(8) The principles set forth in the preceding paragraphs of
this Article shall be applied in determining for the purposes
of this Agreement whether there is a permanent establishment
outside both Contracting States, and whether an enterprise,
not being an enterprise of one of the Contracting States, has
a permanent establishment in one of the Contracting States.
ARTICLE 6
Income from Real Property
(1) Income from real property may be taxed in the Contracting
State in which the real property is situated.
(2) In this Article, the term "real property", in relation
to one of the Contracting States, has the meaning which it
has under the laws of that State and includes:
(a) a lease of land and any other interest in or over
land, including a right to explore for mineral, oil or gas
deposits or other natural resources, and a right to mine such
deposits or resources; and
(b) a right to receive variable or fixed payments either
as consideration for the exploitation of or the right to
explore for or exploit, or in respect of the exploitation of,
mineral, oil or gas deposits, quarries or other places of
extraction or exploitation of natural resources.
Ships and aircraft shall not be regarded as real property.
(3) Any interest or right referred to in paragraph (2) shall
be regarded as situated where the land, mineral, oil or gas
deposits, quarries or natural resources, as the case may be,
are situated or where the exploration may take place.
(4) The provisions of paragraphs (1) and (3) shall also apply
to income from real property of an enterprise and to income
from real property used for the performance of independent
personal services.
ARTICLE 7
Business Profits
(1) The profits of an enterprise of a Contracting State shall
be taxable only in that State unless the enterprise carries
on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise
carries on business as aforesaid, the profits of the
enterprise may be taxed in the other State but only so much
of them as is attributable to that permanent establishment.
(2) Subject to the provisions of paragraph (3), where an
enterprise of a Contracting State carries on business in the
other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which
it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities
under the same or similar conditions and dealing wholly
independently with the enterprise of which it is a permanent
establishment or with other enterprises with which it deals.
(3) In the determination of the profits of a permanent
establishment, there shall be allowed as deductions expenses
of the enterprise, being expenses which are incurred for the
purposes of the permanent establishment (including executive
and general administrative expenses so incurred) and which
would be deductible if the permanent establishment were an
independent entity which paid those expenses, whether
incurred in the Contracting State in which the permanent
establishment is situated or elsewhere.
(4) No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the enterprise.
(5) Nothing in this Article shall affect the application of
any law of a Contracting State relating to the determination
of the tax liability of a person in cases where the
information available to the competent authority of that
State is inadequate to determine the profits to be attributed
to a permanent establishment, provided that that law shall be

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applied, so far as the information available to the competent
authority permits, consistently with the principles of this Article.
(6) Where profits include items of income which are dealt
with separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.

(7) For the purposes of the preceding paragraphs, the profit
to be attributed to the permanent establishment shall be
determined by the same method year by year unless there is
good and sufficient reason to the contrary.
(8) Nothing in this Article shall affect the operation of any
law of a Contracting State relating to tax imposed on profits
from insurance with non-residents, provided that if the
relevant law in force in either Contracting State at the date
of signature of this Agreement is varied (otherwise than in
minor respects so as not to affect its general character) the
Contracting States shall consult with a view to agreeing to
any amendment of this paragraph that may be appropriate.
(9) Where:
(a) 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
(b) in relation to that enterprise, that trustee would, in
accordance with the principles of Article 5, have a permanent
establishment in the other Contracting 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 therein and that
share of business profits shall be attributed to that
permanent establishment.
ARTICLE 8
Ships, Aircraft and Road Transport Vehicles
(1) Profits from the operation of ships, aircraft or road
transport vehicles derived by a resident of one of the
Contracting States shall be taxable only in that State.
(2) Notwithstanding the provisions of paragraph (1), such
profits may be taxed in the other Contracting State where
they are profits from operations of ships, aircraft or road
transport vehicles confined solely to places in that other State.
(3) The provisions of paragraphs (1) and (2) shall apply in
relation to the share of the profits from the operation of
ships, aircraft or road transport vehicles derived by a
resident of one of the Contracting States through
participation in a pool service, in a joint transport
operating organization or in an international operating agency.
(4) For the purposes of this Article, profits derived from
the carriage by ships, aircraft or road transport vehicles of
passengers, livestock, mail, goods or merchandise shipped in
a Contracting State for discharge at another place in that
State shall be treated as profits from operations of ships,
aircraft or road transport vehicles confined solely to places
in that State.
ARTICLE 9
Associated Enterprises
(1) Where:
(a) an enterprise of one of the Contracting States
participates directly or indirectly in the management,
control or capital of an enterprise of the other Contracting
State; or
(b) the same persons participate directly or indirectly in
the management, control or capital of an enterprise of one of
the Contracting States and an enterprise of the other
Contracting State; or
(c) a person, acting in a Contracting State on behalf of
an enterprise of the other Contracting State, manufactures or
processes in the first mentioned State for the enterprise,
goods or merchandise belonging to the enterprise,
and in any case conditions operate between the two
enterprises, or between an enterprise and the person, in
their commercial or financial relations which differ from
those which might be expected to operate between independent
enterprises, or between an independent enterprise and a
person, dealing wholly independently with one another, then
any profits which, but for those conditions, might have been
expected to accrue to one of the enterprises or to the person
but, by reason of those conditions, have not so accrued, may
be included in the profits of that enterprise or of the

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person and taxed accordingly.
(2) Nothing in this Article shall affect the application of
any law of a Contracting State relating to the determination
of the tax liability of a person, including determinations in
cases where the information available to the competent
authority of that State is inadequate to determine the income
to be attributed to an enterprise or a person, provided that
that law shall be applied, so far as it is practicable to do
so, consistently with the principles of this Article.
(3) Where profits on which an enterprise of one of the
Contracting States has been charged to tax in that State are
also included, by virtue of paragraph (1) or (2), in the
profits of an enterprise or of a person of the other
Contracting State and charged to tax in that other State, and
the profits so included are profits which might have been
expected to have accrued to that enterprise or to that person
of the other State if the conditions operative between the
enterprises or between an enterprise and the person had been
those which might have been expected to have operated between
independent enterprises or between an independent enterprise
and a person dealing wholly independently with one another,
then the first mentioned State shall make an appropriate
adjustment to the amount of tax charged on those profits in
the first mentioned State. In determining such an adjustment,
due regard shall be had to the other provisions of this
Agreement and for this purpose the competent authorities of
the Contracting States shall if necessary consult each other.
ARTICLE 10
Dividends
(1) Dividends paid by a company which is a resident of a
Contracting State for the purposes of its tax, being
dividends to which a resident of the other Contracting State
is beneficially entitled, may be taxed in that other State.
(2) Such dividends may be taxed in the Contracting State of
which the company paying the dividends is a resident for the
purposes of its tax, and according to the law of that State,
but the tax so charged shall not exceed 15 per cent of the
gross amount of the dividends.
(3) The term "dividends" as used in this Article means
income from shares or other rights to participate in profits
and not relating to debt claims, as well as other income
which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company
making the distribution is a resident.
(4) The provisions of paragraph (2) shall not apply if the
person beneficially entitled to 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 therein, or performs in that other State independent
personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is
effectively connected with such permanent establishment or
fixed base. In any 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 Contracting State may not impose any tax on
the dividends paid by the company, except in so far as such
dividends are beneficially owned by a resident of that other
State or in so far as the holding in respect of which the
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 tax even
if the dividends paid or the undistributed profits consist
wholly or partly of profits or income arising in that other State.
ARTICLE 11
Interest
(1) Interest arising in a Contracting State, being interest
to which a resident of the other Contracting State is
beneficially entitled, may be taxed in that other State.
(2) Such interest may 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 per cent of the gross
amount of the interest.
(3) The term "interest" in this Article means interest from
indebtedness of every kind, whether or not secured by
mortgage and whether or not carrying a right to participate
in the debtor's profits, and in particular, income from
government securities or from bonds or debentures, and all

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other income that is, by the law relating to tax of the
Contracting State in which the income arises, assimilated to
income from money lent.
(4) The provisions of paragraph (2) shall not apply if the
person beneficially entitled to the interest, being a
resident of a Contracting State, carries on business in the
other Contracting State, in which the interest arises,
through a permanent establishment situated therein, or
performs in that other State independent personal services
from a fixed base situated therein, and the indebtedness in
respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base. In
such a case, the provisions of Article 7 or Article 14, as
the case may be, shall apply.
(5) Interest shall be deemed to arise in a Contracting State
when the payer is that State itself or a political
subdivision or local authority of that State or a person who
is a resident of that State for the purposes of its tax.
Where, however, the person paying the interest, whether the
person is a resident of a Contracting State or not, has in a
Contracting State or outside both Contracting States a
permanent establishment or fixed base in connection with
which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be
deemed to arise in the State in which the permanent
establishment or fixed base is situated.
(6) Where, owing to a special relationship between the payer
and the person beneficially entitled to the interest, or
between both of them and some other person, the amount of the
interest paid, having regard to the indebtedness for which it
is paid, exceeds the amount which might have been expected to
have been agreed upon by the payer and the person so entitled
in the absence of such relationship, the provisions of this
Article shall apply only to the last mentioned amount. In
that case, the excess part of the amount of the interest paid
shall remain taxable according to the law, relating to tax,
of each Contracting State, but subject to the other
provisions of this Agreement.
(7) Interest derived from the investment of official reserves
by the Government of a Contracting State or by a bank
performing central banking functions in a Contracting State
shall be exempt from tax in the other Contracting State.
ARTICLE 12
Royalties
(1) Royalties arising in a Contracting State to which a
resident of the other Contracting State is beneficially
entitled may be taxed in that other State.
(2) Such royalties may be taxed in the Contracting State in
which they arise, and according to the law of that State, but
the tax so charged shall not exceed 10 per cent of the gross
amount of the royalties.
(3) The term "royalties" in this Article means payments or
credits, whether periodical or not, and however described or
computed, to the extent to which they are made as
consideration for:
(a) the use of, or the right to use, any copyright,
patent, design or model, plan, secret formula or process,
trademark, or other like property or right; or
(b) the use of, or the right to use, any industrial,
commercial or scientific equipment; or
(c) the supply of scientific, technical, industrial or
commercial knowledge or information; or

(d) the supply of assistance ancillary and subsidiary to
and furnished to enable the application or enjoyment of or
the use of, or the right to use or the supply of the items
referred to in subparagraphs (a), (b) and (c); or
(e) the use of, or the right to use:
(i) motion picture films; or
(ii) films or video tapes for use in connection with
television; or
(iii) tapes for use in connection with radio broadcasting; or
(f) total or partial forbearance in respect of the use or
supply of any property or right referred to in this paragraph.
(4) The provisions of paragraph (2) shall not apply if the
person beneficially entitled to the royalties, being a
resident of a Contracting State, carries on business in the
other Contracting State, in which the royalties arise,
through a permanent establishment situated therein, or
performs in that other State independent personal services

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from a fixed base situated therein, and the property or right
in respect of which the royalties are paid or credited is
effectively connected with such permanent establishment or
fixed base. In such a case, the provisions of Article 7 or
Article 14, as the case may be, shall apply.
(5) Royalties shall be deemed to arise in a Contracting State
when the payer is that State itself or a political
subdivision or local authority of that State or a person who
is a resident of that State for the purposes of its tax.
Where, however, the person paying the royalties, whether the
person is a resident of a Contracting State or not, has in
one of the Contracting States or outside both Contracting
States a permanent establishment or fixed base in connection
with which the liability to pay the royalties was incurred,
and the royalties are borne by the permanent establishment or
fixed base, then the royalties shall be deemed to arise in the State
in which the permanent establishment or fixed base is situated.
(6) Where, owing to a special relationship between the payer
and the person beneficially entitled to the royalties, or
between both of them and some other person, the amount of the
royalties paid or credited, having regard to what they are
paid or credited for, exceeds the amount which might have
been expected to have been agreed upon by the payer and the
person so entitled in the absence of such relationship, the
provisions of this Article shall apply only to the last
mentioned amount. In that case, the excess part of the amount
of the royalties paid or credited shall remain taxable
according to the law, relating to tax, of each Contracting
State, but subject to the other provisions of this Agreement.
ARTICLE 13
Alienation of Property
(1) Income or gains derived by a resident of a Contracting
State from the alienation of real property referred to in
Article 6 and, as provided in that Article, situated in the
other Contracting State may be taxed in that other State.
(2) Income or gains from the alienation of property, other
than real property referred to in Article 6, that forms part
of the business property of a permanent establishment which
an enterprise of a Contracting State has in the other
Contracting State or pertains to a fixed base available to a
resident of the first mentioned State in that other State for
the purpose of performing independent personal services,
including income or gains from the alienation of such a
permanent establishment (alone or with the whole enterprise)
or of such a fixed base, may be taxed in that other State.
(3) Income or gains from the alienation of ships, aircraft or
road transport vehicles operated in international traffic, or
of property other than real property referred to in Article 6
pertaining to the operation of those ships, aircraft or road
transport vehicles, shall be taxable only in the Contracting
State of which the enterprise which operated those ships,
aircraft or road transport vehicles is a resident.
(4) Income or gains derived by a resident of a Contracting
State from the alienation of shares or comparable interests
in a company, the assets of which consist wholly or
principally of real property in the other Contracting State
of a kind referred to in Article 6, may be taxed in that other State.
(5) Nothing in this Agreement affects the application of a
law of a Contracting State relating to the taxation of gains
of a capital nature derived from the alienation of property
other than that to which any of paragraphs (1), (2), (3) and (4) apply.

ARTICLE 14
Independent Personal Services
(1) Income derived by an individual who is a resident of a
Contracting State in respect of professional services or
other independent activities of a similar character shall be
taxable only in that State unless a fixed base is regularly
available to the individual in the other Contracting State
for the purpose of performing the individual's activities. If
such a fixed base is available to the individual, the income
may be taxed in the other State but only so much of it as is
attributable to activities exercised from that fixed base.
(2) The term "professional services" includes services
performed in the exercise of independent scientific,
literary, artistic, educational or teaching activities as
well as in the exercise of the independent activities of
physicians, dentists, lawyers, engineers, architects and accountants.
ARTICLE 15
Dependent Personal Services
(1) Subject to the provisions of Articles 16, 18, 19, 20 and

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21, salaries, wages and other similar remuneration derived by
an individual who is a resident of a Contracting State in
respect of an employment shall be taxable only in that State
unless the employment is exercised in the other Contracting
State. If the employment is so exercised, such remuneration
as is derived from that exercise may be taxed in that other State.
(2) Notwithstanding the provisions of paragraph (1),
remuneration derived by an individual who is a resident of a
Contracting State in respect of an employment exercised in
the other Contracting State shall be taxable only in the
first mentioned State if:
(a) the recipient is present in that other State for a
period or periods not exceeding in the aggregate 183 days in
the year of income of that other State;
(b) the remuneration is paid by, or on behalf of, an
employer who is not a resident of that other State; and
(c) the remuneration is not borne by a permanent establishment
or a fixed base which the employer has in that other State.
(3) Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship, aircraft or road transport vehicle operated in
international traffic by a resident of one of the Contracting
States may be taxed in that State.
ARTICLE l6
Directors' Fees
Directors' fees and similar payments derived by a person
who is a resident of one of the Contracting States in the
person's capacity as a member of the board of directors or
any similar organ of a company which is a resident of the
other Contracting State may be taxed in that other State.
ARTICLE 17
Entertainers and Athletes
(1) Notwithstanding the provisions of Articles l4 and 15,
income derived by entertainers (such as theatrical, motion
picture, radio or television artistes and musicians and
athletes) from their personal activities as such may be taxed
in the Contracting State in which these activities are exercised.
(2) Where income in respect of the personal activities of an
entertainer as such accrues not to that entertainer but to
another person, that income may, notwithstanding the
provisions of Articles 7, 14 and 15, be taxed in the Contracting
State in which the activities of the entertainer are exercised.
(3) The provisions of paragraphs (1) and (2) of this Article
shall not apply to income derived from activities performed
in a Contracting State by a non-profit organisation or by
entertainers or athletes if the visit to that Contracting
State is substantially supported by public funds and the
activities are not performed for the purposes of profit.
ARTICLE 18
Pensions and Annuities
(1) Pensions (including government pensions) and annuities
paid to a resident of a Contracting State shall be taxable
only in that State.
(2) The term "annuity" means a stated sum payable
periodically at stated times during life or during a
specified or ascertainable period of time under an obligation
to make the payments in return for adequate and full
consideration in money or money's worth.
ARTICLE 19
Government Service
(1) Remuneration, other than a pension or annuity, paid by a
Contracting State or a political subdivision or local
authority of that State to any individual in respect of
services rendered to it or to one or more of them shall be
taxable only in that State. However, such remuneration shall
be taxable only in the other Contracting State if the
services are rendered in that other State and the recipient
is a resident of that other State who:
(a) is a citizen of that State; or
(b) did not become a resident of that State solely for the
purpose of performing the services.
(2) The provisions of paragraph (1) shall not apply to
remuneration in respect of services rendered in connection
with any trade or business carried on by one of the
Contracting States or a political subdivision or local
authority of that State. In such a case, the provisions of
Article 15 or Article 16, as the case may be, shall apply.
ARTICLE 20
Professors and Teachers
(1) Where a professor or teacher who is a resident of a

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Contracting State visits the other Contracting State for a
period not exceeding two years for the purpose of teaching or
carrying out advanced study or research at a university,
college, school or other educational institution in that
other State, any remuneration the person receives for such
teaching, advanced study or research shall be exempt from tax
in that other State to the extent to which that remuneration
is, or upon the application of this Article will be, subject
to tax in the first mentioned State.
(2) This Article shall not apply to remuneration which a
professor or teacher receives for conducting research if the
research is undertaken primarily for the private benefit of a
specific person or persons.
ARTICLE 21
Students and Trainees
Where a student or trainee, who is a resident of a
Contracting State or who was a resident of that State
immediately before visiting the other Contracting State and
who is temporarily present in that other State solely for the
purpose of education or training, receives payments from
sources outside that other State for the purpose of
maintenance, education, or training, those payments shall be
exempt from tax in that other State.
ARTICLE 22
Income Not Expressly Mentioned
(1) Items of income of a resident of a Contracting State,
wherever arising, not dealt with in the foregoing Articles of
this Agreement shall be taxable only in that State.
(2) The provisions of paragraph (1) shall not apply to income
if the beneficial owner of such income, being a resident of a
Contracting State, carries on business in the other
Contracting State through a permanent establishment situated
therein, or performs in that other State independent personal
services from a fixed base situated therein, and the right or
property in respect of which the income is paid is
effectively connected with such permanent establishment or
fixed base. In such a case, the provisions of Article 7 or
Article 14, as the case may be, shall apply.
(3) Notwithstanding the provisions of paragraphs (1) and (2),
items of income of a resident of a Contracting State not
dealt with in the foregoing articles of this Agreement and
arising in the other Contracting State may be taxed in that
other State.
ARTICLE 23
Source of Income
Income, profits or gains derived by a resident of a
Contracting State which, under any one or more of Articles 6
to 8, 10 to 17, 19 and 22, may be taxed in the other
Contracting State shall, for the purposes of Article 24 and
of the income tax laws of the respective States be deemed to
be income from sources in that other State.
ARTICLE 24
Methods of Elimination of Double Taxation
(1) In the Republic of Hungary double taxation shall be
eliminated as follows:
(a) where a resident of the Republic of Hungary derives
income or gains which, in accordance with the provisions of
this Agreement may be taxed in Australia, the Republic of
Hungary shall, subject to the provisions of subparagraph (b),
exempt such income or gains from tax;
(b) where a resident of the Republic of Hungary derives
items of income which, in accordance with the provisions of
Article 10, may be taxed in Australia, the Republic of
Hungary shall allow as a deduction from the tax on the income
of that resident an amount equal to the tax paid in
Australia. Such deduction shall not, however, exceed that
part of the tax, as computed before the deduction is given
which is attributable to such items of income derived from Australia.
(2) In Australia, double taxation shall be eliminated as follows:
(a) 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), Hungarian tax paid under the law of the
Republic of Hungary 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 Hungary shall be allowed as a credit against
Australian tax payable in respect of that income;
(b) where a company which is a resident of the Republic of

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Hungary and is not a resident of Australia for the purposes
of Australian tax pays a dividend to a company which is a
resident of Australia and which controls directly or
indirectly not less than 10 per cent of the voting power of
the first mentioned company, the credit referred to in
subparagraph (a) shall include the tax paid by that first
mentioned company in respect of that portion of its profits
out of which the dividend is paid.
ARTICLE 25
Mutual Agreement Procedure
(1) Where a person who is a resident of a Contracting State
considers that the actions of the competent authority of one
or both of the Contracting States result or will result for
the person in taxation not in accordance with this Agreement,
the person may, notwithstanding the remedies provided by the
national laws of those States, present a case to the
competent authority of the Contracting State of which the
person is a resident. The case must be presented within three
years from the first notification of the action giving rise
to taxation not in accordance with this Agreement.
(2) The competent authority shall endeavour, if the claim
appears to it to be justified and if it is not itself able to
arrive at an appropriate solution, to resolve the case with
the competent authority of the other Contracting State, with
a view to the avoidance of taxation not in accordance with
this Agreement. The solution so reached shall be implemented
notwithstanding any time limits in the national laws of the
Contracting States.
(3) The competent authorities of the Contracting States shall
jointly endeavour to resolve any difficulties or doubts
arising as to the interpretation of this Agreement. In cases
which are not provided for, the competent authorities may
also consult to identify appropriate ways by which double
taxation may be eliminated through amendment of this Agreement.
(4) The competent authorities of the Contracting States may
communicate with each other directly for the purpose of
giving effect to the provisions of this Agreement.
ARTICLE 26
Exchange of Information
(1) The competent authorities of the Contracting States shall
exchange such information as is necessary for the carrying
out of this Agreement or of the domestic laws of the
Contracting States concerning the taxes to which this
Agreement applies in so far as the taxation thereunder is not
contrary to this Agreement. The exchange of information is
not restricted by Article 1. Any information received by the
competent authority of a Contracting State shall be treated
as secret in the same manner as information obtained under
the domestic laws of that State and shall be disclosed only
to persons or authorities (including courts and
administrative bodies) concerned with the assessment or
collection of, enforcement or prosecution in respect of, or
the determination of appeals in relation to, the taxes to
which this Agreement applies and shall be used only for such
purposes. Any information received will be treated as secret
on request of the Contracting State giving the information.
(2) In no case shall the provisions of paragraph (1) be
construed so as to impose on the competent authority of a
Contracting State the obligation:
(a) to carry out administrative measures at variance with
the laws or the administrative practice of that or of the
other Contracting State; or
(b) to supply particulars which are not obtainable under
the laws or in the normal course of the administration of
that or of the other Contracting State; or
(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or to supply information the disclosure of
which would be contrary to public policy.
ARTICLE 27
Diplomatic and Consular Officials
Nothing in this Agreement shall affect the fiscal
privileges of diplomatic or consular officials under the
general rules of international law or under the provisions of
special international agreements.
ARTICLE 28
Entry into Force
This Agreement shall enter into force on the date on which
the Contracting States exchange notes through the diplomatic
channel notifying each other that the last of such things has

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been done as is necessary to give this Agreement the force of
law in Australia and in the Republic of Hungary, as the case
may be, and thereupon this Agreement shall have effect:
(a) in Australia:
(i) in respect of withholding tax on income that is
derived by a non-resident, in relation to income derived on
or after 1 July in the calendar year next following that in
which the Agreement enters into force;
(ii) in respect of other Australian tax, in relation to
profits, income or gains of any year of income beginning on
or after 1 July in the calendar year next following that in
which the Agreement enters into force;
(b) in the Republic of Hungary:
(i) in respect of withholding tax on income that is
derived by a non-resident, in relation to income derived on
or after 1 January in the calendar year next following that
in which the Agreement enters into force;
(ii) in respect of other Hungarian tax, in relation to
profits, income or gains of any year of income beginning on
or after 1 January in the calendar year next following that
in which the Agreement enters into force.
ARTICLE 29
Termination
This Agreement shall continue in effect indefinitely, but
either of the Contracting States may, on or before 30 June in
any calendar year beginning after the expiration of 5 years
from the date of its entry into force, give to the other
Contracting State through the diplomatic channel written
notice of termination and, in that event, this Agreement
shall cease to be effective:
(a) in Australia:
(i) in respect of withholding tax on income that is
derived by a non-resident, in relation to income derived on
or after 1 July in the calendar year next following that in
which the notice of termination is given;
(ii) in respect of other Australian tax, in relation to
profits, income or gains of any year of income beginning on
or after 1 July in the calendar year next following that in
which the notice of termination is given;
(b) in the Republic of Hungary:
(i) in respect of withholding tax on income that is
derived by a non-resident, in relation to income derived on
or after 1 January in the calendar year next following that
in which the notice of termination is given;
(ii) in respect of other Hungarian tax, in relation to
profits, income or gains of any year of income beginning on
or after 1 January in the calendar year next following that
in which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, duly authorised
thereto, have signed this Agreement.

DONE in duplicate at CANBERRA this TWENTY-NINTH day of
NOVEMBER One thousand nine hundred and ninety in the English
and Hungarian languages, both texts being equally authentic.
PAUL KEATING GEZA JESZENSZKY
FOR AUSTRALIA FOR THE REPUBLIC OF HUNGARY
"SCHEDULE 34 Section 3
AGREEMENT BETWEEN AUSTRALIA AND THE REPUBLIC OF KIRIBATI
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
Australia and the Republic of Kiribati,
Affirming their desire to maintain and strengthen trade, investment
and private sector cooperation between the two countries, and
Desiring to conclude an Agreement for the avoidance of
double taxation and the prevention of fiscal evasion with
respect to taxes on income,
Have agreed as follows:
ARTICLE 1
Personal Scope
This Agreement shall apply to persons who are residents of
one or both of the Contracting States.
ARTICLE 2
Taxes Covered
1 The existing taxes to which this Agreement shall apply are:
(a) in Australia:
the income tax, and the resource rent tax in respect of
offshore projects relating to exploration for or exploitation
of petroleum resources, imposed under the federal law of Australia;
(b) in Kiribati, the income tax imposed under the law of Kiribati.
2 This Agreement shall also apply to any identical or
substantially similar taxes which are imposed under the

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federal law of Australia or the law of Kiribati after the
date of signature of this Agreement in addition to, or in
place of, the existing taxes. The competent authorities of
the Contracting States shall notify each other of any
substantial changes which have been made in the laws of their
respective States relating to the taxes to which this Agreement
applies within a reasonable period of time after those changes.
ARTICLE 3
General Definitions
1 In this Agreement, unless the context otherwise requires:
(a) the term "Australia", when used in a geographical
sense, excludes all external territories other than:
(i) the Territory of Norfolk Island;
(ii) the Territory of Christmas Island;
(iii) the Territory of Cocos (Keeling) Islands;
(iv) the Territory of Ashmore and Cartier Islands;
(v) the Territory of Heard Island and McDonald Islands; and
(vi) the Coral Sea Islands Territory,
and includes any area adjacent to the territorial limits of
Australia (including the Territories specified in this
subparagraph) in respect of which there is for the time being
in force, consistently with international law, a law of
Australia dealing with the exploration for or exploitation of
any of the natural resources of the seabed and subsoil of the
continental shelf;
(b) the term "Kiribati" means the Republic of Kiribati
and includes all adjacent areas which, consistently with
international law, have been, or may after the date of this
Agreement be, designated under the laws of Kiribati as areas
over which Kiribati has sovereignty, sovereign rights or
jurisdiction in relation to the exploration for and exploitation
of the resources of the sea, the seabed and its subsoil;
(c) the terms "Contracting State", "one of the
Contracting States" and "other Contracting State" mean
Australia or Kiribati, as the context requires;
(d) the term "person" includes an individual, a company
and any other body of persons;
(e) the term "company" means any body corporate or any entity
which is treated as a company or body corporate for tax purposes;
(f) the terms "enterprise of one of the Contracting
States" and "enterprise of the other Contracting State"
mean an enterprise carried on by a resident of Australia or
an enterprise carried on by a resident of Kiribati, as the
context requires;
(g) the term "tax" means Australian tax or Kiribati tax,
as the context requires, but does not include any penalty or
interest imposed under the law of either Contracting State
relating to its tax;
(h) the term "Australian tax" means tax imposed by
Australia, being tax to which this Agreement applies by
virtue of Article 2;
(i) the term "Kiribati tax" means tax imposed by the
Republic of Kiribati, being tax to which this Agreement
applies by virtue of Article 2;

(j) the term "competent authority" means, in the case of
Australia, the Commissioner of Taxation or an authorised
representative of the Commissioner and, in the case of
Kiribati, the Internal Revenue Board or an authorised
representative of the Board.
2 In the application of this Agreement by one of the
Contracting States, any term not defined in this Agreement
shall, unless the context otherwise requires, have the
meaning which it has under the laws of that State from time
to time in force relating to the taxes to which this
Agreement applies.
ARTICLE 4
Residence
1 For the purposes of this Agreement, a person is a resident
of one of the Contracting States:
(a) in the case of Australia, if the person is a resident
of Australia for the purposes of Australian tax; and
(b) in the case of Kiribati, if the person is a resident
of Kiribati for the purposes of Kiribati tax.
2 A person is not a resident of one of the Contracting States
for the purposes of this Agreement if the person is liable to
tax in that State in respect only of income from sources in that State.
3 Where by reason of the preceding provisions of this Article
a person, being an individual, is a resident of both
Contracting States, then the status of the person shall be
determined in accordance with the following rules:

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(a) the person shall be deemed to be a resident solely of
the Contracting State in which a permanent home is available
to the person;
(b) if a permanent home is available to the person in both
Contracting States, or in neither of them, the person shall
be deemed to be a resident solely of the Contracting State in
which the person has an habitual abode;
(c) if the person has an habitual abode in both
Contracting States, or if the person does not have an
habitual abode in either of them, the person shall be deemed
to be a resident solely of the Contracting State with which
the person's personal and economic relations are the closer.
4 Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting
States, then the person's status shall be determined as follows:
(a) it shall be deemed to be a resident of the Contracting
State in which it is incorporated or otherwise constituted;
(b) if it is not incorporated or otherwise constituted in
either of the Contracting States, it shall be deemed to be a
resident of the Contracting State in which its place of
effective management is situated.
ARTICLE 5
Permanent Establishment
1 For the purposes of this Agreement, the term "permanent
establishment", in relation to an enterprise, means a fixed
place of business through which the business of the
enterprise is wholly or partly carried on.
2 The term "permanent establishment" shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other
place of extraction of natural resources;
(g) an agricultural, pastoral or forestry property; and
(h) a building site or construction, installation or
assembly project which exists for more than 90 days.
3 An enterprise shall not be deemed to have a permanent
establishment merely by reason of:
(a) the use of facilities solely for the purpose of
storage, display or delivery of goods or merchandise
belonging to the enterprise; or
(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
storage, display or delivery; or
(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise; or
(d) the maintenance of a fixed place of business solely
for the purpose of purchasing goods or merchandise, or for
collecting information, for the enterprise; or
(e) the maintenance of a fixed place of business solely
for the purpose of activities which have a preparatory or
auxiliary character for the enterprise, such as advertising
or scientific research.
4 An enterprise shall be deemed to have a permanent
establishment in one of the Contracting States and to carry
on business through that permanent establishment if:
(a) it carries on supervisory activities in that State for
more than 90 days in connection with a building site, or a
construction, installation or assembly project, which is
being undertaken in that State; or
(b) services are furnished in that State, including
consultancy, management or administrative services through
employees or other personnel engaged by the enterprise or an
associated enterprise for such purposes, and those activities
continue for the same or a connected project within that
State for a period or periods aggregating more than 90 days
in any year of income or tax year, as the case may be; or
(c) substantial equipment is being used in that State by,
for or under contract with the enterprise.
5 A person acting in one of the Contracting States on behalf
of an enterprise of the other Contracting State - other than
an agent of an independent status to whom paragraph 6 applies
- shall be deemed to be a permanent establishment of that
enterprise in the firstmentioned State if:
(a) the person has, and habitually exercises in that
State, an authority to conclude contracts on behalf of the
enterprise, unless the person's activities are limited to the

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purchase of goods or merchandise for the enterprise; or
(b) notwithstanding the provisions of subparagraphs 3 (a)
and 3 (b), the person has no such authority but habitually
maintains in that State a stock of goods or merchandise from
which the person regularly delivers in that State goods or
merchandise on behalf of the enterprise; or
(c) in so acting, the person manufactures or processes in
that State for the enterprise goods or merchandise belonging
to the enterprise.
6 An enterprise of one of the Contracting States shall not be
deemed to have a permanent establishment in the other
Contracting State merely because it carries on business in
that other State through a person who is a broker, general
commission agent or any other agent of an independent status
and is acting in the ordinary course of the person's business
as such a broker or agent.
7 The fact that a company which is a resident of one of the
Contracting States controls or is controlled by a company
which is a resident of the other Contracting State, or which
carries on business in that other State (whether through a
permanent establishment or otherwise), shall not of itself
make either company a permanent establishment of the other.
8 The principles set forth in the preceding paragraphs of
this Article shall be applied in determining for the purposes
of paragraph 5 of Article 11 and paragraph 5 of Article 12
whether there is a permanent establishment outside both
Contracting States, and whether an enterprise, not being an
enterprise of one of the Contracting States, has a permanent
establishment in one of the Contracting States.
ARTICLE 6
Income from Real Property
1 Income from real property may be taxed in the Contracting
State in which the real property is situated.
2 In this Article, the term "real property", in relation to
one of the Contracting States, has the meaning which it has
under the laws of that State and includes:
(a) a lease of land and any other interest in or over
land, whether improved or not, including a right to explore
for mineral, oil or gas deposits or other natural resources,
and a right to mine those deposits or resources; and
(b) a right to receive variable or fixed payments either
as consideration for or in respect of the exploitation of, or
the right to explore for or exploit, mineral, oil or gas
deposits, quarries or other places of extraction or
exploitation of natural resources.
3 Any interest or right referred to in paragraph 2 shall be
regarded as situated where the land, mineral, oil or gas
deposits, quarries or natural resources, as the case may be,
are situated or where the exploration may take place.
4 The provisions of paragraphs 1 and 3 shall also apply to
income from real property of an enterprise and to income from
real property used for the performance of independent
personal services.
ARTICLE 7
Business Profits
1 The profits of an enterprise of one of the Contracting
States shall be taxable only in that State unless the
enterprise carries on business in the other Contracting State
through a permanent establishment situated therein. If the
enterprise carries on business as aforesaid, the profits of
the enterprise may be taxed in the other State but only so
much of them as is attributable to:
(a) that permanent establishment; or
(b) sales within that other Contracting State of goods or
merchandise of the same or a similar kind as those sold, or
other business activities within that other State of the same
or a similar kind as those carried on, through that permanent
establishment, if, on the basis of the information available
to the competent authority of that other State, it may
reasonably be concluded that those sales or business
activities would not have been made or carried on but for the
existence of that permanent establishment or the continued
provision by it of goods or services.
2 Subject to the provisions of paragraph 3, where an
enterprise of one of the Contracting States carries on
business in the other Contracting State through a permanent
establishment situated in that other State, there shall in
each Contracting State be attributed to that permanent
establishment the profits which it might be expected to make
if it were a distinct and separate enterprise engaged in the

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same or similar activities under the same or similar
conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment or with
other enterprises with which it deals.
3 In the determination of the profits of a permanent
establishment, there shall be allowed as deductions expenses
of the enterprise, being expenses which are incurred for the
purposes of the permanent establishment (including executive
and general administrative expenses so incurred) and which
would be deductible if the permanent establishment were an
independent entity which paid those expenses, whether
incurred in the Contracting State in which the permanent
establishment is situated or elsewhere.
4 No profits shall be attributed to a permanent establishment
by reason of the mere purchase by that permanent
establishment of goods or merchandise for the enterprise.
5 Nothing in this Article shall affect the application of any
law of one of the Contracting States relating to the
determination of the tax liability of a person in cases where
the information available to the competent authority of that
State is inadequate to determine the profits to be attributed
to a permanent establishment, provided that that law shall be
applied, so far as the information available to the competent
authority permits, consistently with the principles of this Article.
6 Where profits include items of income which are dealt with
separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.
7 Nothing in this Article shall affect the operation of any
law of one of the Contracting States relating to tax imposed
on profits from insurance with nonresidents provided that if
the relevant law in force in either Contracting State at the
date of signature of this Agreement is varied (otherwise than
in minor respects so as not to affect its general character)
the Contracting States shall consult with each other with a view to
agreeing to any amendment of this paragraph that may be appropriate.
8 Where:

(a) a resident of one of the Contracting States 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
(b) 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.
ARTICLE 8
Ships and Aircraft
1 Profits from the operation of aircraft derived by a
resident of one of the Contracting States shall be taxable
only in that State.
2 Profits from the operation of ships derived by a resident
of one of the Contracting States may be taxed in that
Contracting State and may also be taxed in the other State,
but the tax so charged in the other State shall be reduced by
an amount equal to one half of the amount which would be
payable in respect of those profits but for this paragraph.
3 Notwithstanding the provisions of paragraph 1, such profits
may be taxed in the other Contracting State, where they are
profits from the operation of aircraft confined solely to
places in that other State; and notwithstanding the
provisions of paragraph 2, such profits may be taxed in the
other Contracting State without reduction, where they are
profits from the operation of ships confined solely to places
in that other State.
4 The provisions of paragraphs 1, 2 and 3 shall apply in
relation to the share of profits from the operation of ships
or aircraft derived by a resident of one of the Contracting
States through participation in a pool service, in a joint
transport operating organisation or in an international
operating agency.
5 For the purposes of this Article, profits derived from the
carriage by ships or aircraft of passengers, livestock, mail,
goods or merchandise shipped in a Contracting State for
discharge at another place in that State shall be treated as

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profits from the operation of ships or aircraft confined
solely to places in that State.
ARTICLE 9
Associated Enterprises
1 Where:
(a) an enterprise of one of the Contracting States
participates directly or indirectly in the management,
control or capital of an enterprise of the other Contracting
State; or
(b) the same persons participate directly or indirectly in
the management, control or capital of an enterprise of one of
the Contracting States and an enterprise of the other
Contracting State,
and in either case conditions operate between the 2
enterprises in their commercial or financial relations which
differ from those which might be expected to operate between
independent enterprises dealing wholly independently with one
another, then any profits which, but for those conditions,
might have been expected to accrue to one of the enterprises,
but, by reason of those conditions, have not so accrued, may
be included in the profits of that enterprise and taxed accordingly.
2 Nothing in this Article shall affect the application of any
law of one of the Contracting States relating to the
determination of the tax liability of a person, including
determinations in cases where the information available to
the competent authority of that State is inadequate to
determine the income to be attributed to an enterprise,
provided that that law shall be applied, so far as it is practicable to do so, consistently with the principles of this Article.
3 Where profits on which an enterprise of one of the
Contracting States has been charged to tax in that State are
also included, by virtue of paragraph 1 or 2, in the profits
of an enterprise of the other Contracting State and charged
to tax in that other State, and the profits so included are
profits which might have been expected to have accrued to
that enterprise of the other State if the conditions
operative between the enterprises had been those which might
have been expected to have operated between independent
enterprises dealing wholly independently with one another,
then the firstmentioned State shall make an appropriate
adjustment to the amount of tax charged on those profits in
the firstmentioned State. In determining such an adjustment,
due regard shall be had to the other provisions of this
Agreement and for this purpose the competent authorities of
the Contracting States shall if necessary consult each other.
ARTICLE 10
Dividends
1 Dividends paid by a company which is a resident of one of
the Contracting States for the purposes of its tax, being
dividends to which a resident of the other Contracting State
is beneficially entitled, may be taxed in that other State.
2 Those dividends may be taxed in the Contracting State of
which the company paying the dividends is a resident for the
purposes of its tax, and according to the law of that State,
but the tax so charged shall not exceed 20 per cent of the
gross amount of the dividends.
3 The term "dividends" in this Article means income from
shares and other income assimilated to income from shares by
the law, relating to tax, of the Contracting State of which
the company making the distribution is a resident for the
purposes of its tax.
4 The provisions of paragraph 2 shall not apply if the person
beneficially entitled to the dividends, being a resident of
one of the Contracting States, 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 that case the
provisions of Article 7 or 14, as the case may be, shall apply.
5 Dividends paid by a company which is a resident of one of
the Contracting States, being dividends to which a person who
is not a resident of the other Contracting State is
beneficially entitled, shall be exempt from tax in that other
State except in so far as the holding in respect of which the
dividends are paid is effectively connected with a permanent
establishment or fixed base situated in that other State.
This paragraph shall not apply in relation to dividends paid

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by any company which is a resident of Australia for the
purposes of Australian tax and which is also a resident of
Kiribati for the purposes of Kiribati tax.
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 That interest may 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 per cent of the gross
amount of the interest.
3 The term "interest" in this Article includes interest
from Government securities or from bonds or debentures,
whether or not secured by mortgage and whether or not
carrying a right to participate in profits, interest from any
other form of indebtedness and all other income assimilated
to income from money lent by the law, relating to tax, of the
Contracting State in which the income arises.
4 The provisions of paragraph 2 shall not apply if the person
beneficially entitled to the interest, being a resident of
one of the Contracting States, carries on business in the
other Contracting State, in which the interest arises,
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 indebtedness in respect of which the interest is paid is
effectively connected with that permanent establishment or
fixed base. In that case, the provisions of Article 7 or 14,
as the case may be, shall apply.
5 Interest shall be deemed to arise in one of the Contracting
States when the payer is that State itself or a political
subdivision or local authority of that State or a person who
is a resident of that State for the purposes of its tax.
Where, however, the person paying the interest, whether the
person is a resident of one of the Contracting States or not,
has in one of the Contracting States or outside both
Contracting States a permanent establishment or fixed base in
connection with which the indebtedness on which the interest
is paid was incurred, and that interest is borne by that
permanent establishment or fixed base, then the interest
shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
6 Where, owing to a special relationship between the payer
and the person beneficially entitled to the interest, or
between both of them and some other person, the amount of the
interest paid, having regard to the indebtedness for which it
is paid, exceeds the amount which might have been expected to
have been agreed upon by the payer and the person so entitled
in the absence of that relationship, the provisions of this
Article shall apply only to the lastmentioned amount. In that
case, the excess part of the amount of the interest paid
shall remain taxable according to the law, relating to tax,
of each Contracting State, but subject to the other
provisions of this Agreement.
ARTICLE 12
Royalties
1 Royalties arising in one of the Contracting States, being
royalties to which a resident of the other Contracting State
is beneficially entitled, may be taxed in that other State.
2 Those royalties may be taxed in the Contracting State in
which they arise, and according to the law of that State, but
the tax so charged shall not exceed 15 per cent of the gross
amount of the royalties.
3 The term "royalties" in this Article means payments or
credits, whether periodical or not, and however described or
computed, to the extent to which they are made as
consideration for:
(a) the use of, or the right to use, any copyright,
patent, design or model, plan, secret formula or process,
trademark or other like property or right; or
(b) the use of, or the right to use, any industrial,
commercial or scientific equipment; or
(c) the supply of scientific, technical, industrial or
commercial knowledge or information; or
(d) the supply of any assistance that is ancillary and
subsidiary to, and is furnished as a means of enabling the
application or enjoyment of, any such property or right as is
mentioned in subparagraph (a), any such equipment as is
mentioned in subparagraph (b) or any such knowledge or

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information as is mentioned in subparagraph (c); or
(e) the use of, or the right to use:
(i) motion picture films; or
(ii) films or video tapes for use in connection with
television; or
(iii) tapes for use in connection with radio broadcasting; or
(f) total or partial forbearance in respect of the use or
supply of any property or right referred to in this paragraph.
4 The provisions of paragraph 2 shall not apply if the person
beneficially entitled to the royalties, being a resident of
one of the Contracting States, carries on business in the
other Contracting State, in which the royalties arise,
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 property or right in respect of which the royalties are
paid or credited is effectively connected with that permanent
establishment or fixed base. In that case, the provisions of
Article 7 or 14, as the case may be, shall apply.
5 Royalties shall be deemed to arise in one of the
Contracting States when the payer is that State itself or a
political subdivision or local authority of that State or a
person who is a resident of that State for the purposes of
its tax. Where, however, the person paying the royalties,
whether the person is a resident of one of the Contracting
States or not, has in one of the Contracting States or
outside both Contracting States a permanent establishment or
fixed base in connection with which the liability to pay the
royalties was incurred, and the royalties are borne by the
permanent establishment or fixed base, then the royalties
shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
6 Where, owing to a special relationship between the payer
and the person beneficially entitled to the royalties, or
between both of them and some other person, the amount of the
royalties paid or credited, having regard to what they are
paid or credited for, exceeds the amount which might have
been expected to have been agreed upon by the payer and the
person so entitled in the absence of such relationship, the
provisions of this Article shall apply only to the
lastmentioned amount. In that case, the excess part of the
amount of the royalties paid or credited shall remain taxable
according to the law, relating to tax, of each Contracting
State, but subject to the other provisions of this Agreement.
ARTICLE 13
Alienation of Property
1 Income, profits or gains derived by a resident of one of
the Contracting States from the alienation of real property
situated in the other Contracting State may be taxed in that
other State.
2 Income, profits or gains from the alienation of property,
other than real property, that forms part of the business
property of a permanent establishment which an enterprise of
one of the Contracting States has in the other Contracting
State or pertains to a fixed base available in that other
State to a resident of the firstmentioned State for the
purpose of performing independent personal services,
including income, profits or gains from the alienation of
that permanent establishment (alone or with the whole enterprise)
or of that fixed base, may be taxed in that other State.
3 Income, profits or gains from the alienation of ships or
aircraft operated in international traffic, or of property
(other than real property) pertaining to the operation of
those ships or aircraft, shall be taxable only in the
Contracting State of which the enterprise which operated
those ships or aircraft is a resident.

4 Income, profits or gains derived by a resident of one of
the Contracting States from the alienation of shares or
comparable interests in a company, the assets of which
consist wholly or principally of real property situated in
the other Contracting State, may be taxed in that other State.
5 Nothing in this Agreement affects the application of a law
of one of the Contracting States relating to the taxation of
gains of a capital nature derived from the alienation of
property other than that to which any of the preceding
paragraphs of this Article apply.
6 In this Article, the term "real property" has the same
meaning as it has in Article 6.
7 The situation of real property shall be determined for the
purposes of this Article in accordance with paragraph 3 of

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Article 6.
ARTICLE 14
Independent Personal Services
1 Income derived by an individual who is a resident of one of
the Contracting States in respect of professional services or
other independent activities of a similar character shall be
taxable only in that State unless:
(a) a fixed base is regularly available to the individual
in the other Contracting State for the purpose of performing
the individual's activities. If such a fixed base is
available to the individual, the income may be taxed in the
other State but only so much of it as is attributable to
activities exercised from that fixed base; or

(b) the income is derived from a resident of that other
Contracting State or a permanent establishment in that other
Contracting State and exceeds an amount of $A8,000 or its
equivalent in any other currency in any one 12 month period.
In that case so much of the income as is derived from that
individual's activities in that other Contracting State may
be taxed in that State; or
(c) that individual's stay in that other Contracting State
exceeds an aggregate of 90 days in any year of income or tax
year, as the case may be, of that other State. In that case
so much of the income as is derived from that individual's
activities in that other Contracting State may be taxed in
that State.
2 The Treasurer of Australia and the Minister of Finance and
Economic Planning of Kiribati may mutually determine in
letters exchanged for the purpose variations in the amount
specified in subparagraph 1 (b) and any variations so determined
shall have effect according to the tenor of the letters.
3 The term "professional services" includes services
performed in the exercise of independent scientific,
literary, artistic, educational or teaching activities as
well as in the exercise of the independent activities of physicians,
lawyers, engineers, architects, dentists and accountants.
ARTICLE 15
Dependent Personal Services
1 Subject to the provisions of Articles 16, 18 and 19,
salaries, wages and other similar remuneration derived by an
individual who is a resident of one of the Contracting States
in respect of an employment shall be taxable only in that
State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such
remuneration as is derived from that exercise may be taxed in
that other State.
2 Notwithstanding the provisions of paragraph 1, remuneration
derived by an individual who is a resident of one of the
Contracting States in respect of an employment exercised in
the other Contracting State shall be taxable only in the
firstmentioned State if:
(a) the recipient is present in that other State for a
period or periods not exceeding in the aggregate 90 days in
the year of income or tax year, as the case may be, of that
other State; and
(b) the remuneration is paid by, or on behalf of, an
employer who is not a resident of that other State; and
(c) the remuneration is not deductible in determining
taxable profits of a permanent establishment or a fixed base
which the employer has in that other State; and
(d) the remuneration is, or upon the application of this
Article will be, subject to tax in the firstmentioned State.
3 Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic by a resident
of one of the Contracting States may be taxed in that State.
ARTICLE 16
Directors' Fees
Directors' fees and similar payments derived by a resident
of one of the Contracting States as a member of the board of
directors of a company which is a resident of the other
Contracting State may be taxed in that other State.
ARTICLE 17
Entertainers
1 Notwithstanding the provisions of Articles 14 and 15,
income derived by entertainers (such as theatrical, motion
picture, radio or television artistes, and musicians and
athletes) from their personal activities as such may be taxed
in the Contracting State in which these activities are exercised.
2 Where income in respect of the personal activities of an

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entertainer as such accrues not to that entertainer but to
another person, that income may, notwithstanding the
provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer are exercised.
ARTICLE 18
Pensions and Annuities
1 Pensions (including government pensions) and annuities paid
to a resident of one of the Contracting States shall be
taxable only in that State.
2 The term "annuity" means a stated sum payable
periodically at stated times during life or during a
specified or ascertainable period of time under an obligation
to make the payments in return for adequate and full
consideration in money or money's worth.
3 Any alimony or other maintenance payment arising in one of
the Contracting States and paid to a resident of the other
Contracting State shall be taxable only in the firstmentioned State.
ARTICLE 19
Government Service
1 Remuneration, other than a pension or annuity, paid by one
of the Contracting States or a political subdivision or local
authority of that State to any individual in respect of
services rendered in the discharge of governmental functions
shall be taxable only in that State. However, such
remuneration shall be taxable only in the other Contracting
State if the services are rendered in that other State and
the receipient is a resident of that other State who:
(a) is a citizen or national of that State; or
(b) did not become a resident of that State solely for the
purpose of performing the services.
2 The provisions of paragraph 1 shall not apply to
remuneration in respect of services rendered in connection
with any trade or business carried on by one of the
Contracting States or a political subdivision or local
authority of that State. In that case, the provisions of
Article 15 or 16, as the case may be, shall apply.
ARTICLE 20
Students and Trainees
Where a student or trainee, who is a resident of one of the
Contracting States or who was a resident of that State
immediately before visiting the other Contracting State and
who is temporarily present in that other State solely for the
purpose of the student's or trainee's education or training,
receives payments from sources outside that other State for
the purpose of the student's or trainee's maintenance,
education, or training, those payments shall be exempt from
tax in that other State.
ARTICLE 21
Income Not Expressly Mentioned
1 Items of income of a resident of one of the Contracting
States which are not expressly mentioned in the foregoing
Articles of this Agreement shall be taxable only in that State.
2 However, any such income derived by a resident of one of
the Contracting States from sources in the other Contracting
State may also be taxed in that other State.
3 The provisions of paragraph 1 shall not apply to income
derived by a resident of one of the Contracting States where
that income is effectively connected with a permanent
establishment or fixed base situated in the other Contracting
State. In that case, the provisions of Article 7 or 14, as
the case may be, shall apply.
ARTICLE 22
Source of Income
1 Income, profits or gains derived by a resident of one of
the Contracting States which, under any one or more of
Articles 6 to 8, 10 to 19 and 21, may be taxed in the other
Contracting State shall for the purposes of the law of that
other Contracting State relating to its tax be deemed to be
income from sources in that other Contracting State.
2 Income, profits or gains derived by a resident of one of
the Contracting States which, under any one or more of
Articles 6 to 8, 10 to 19 and 21, may be taxed in the other
Contracting State shall for the purposes of Article 23 and of
the law of the firstmentioned Contracting State relating to
its tax be deemed to be income from sources in the other
Contracting State.
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

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against Australian tax of tax paid in a country outside
Australia (which shall not affect the general principle of
this Article), Kiribati tax paid under the law of Kiribati
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 Kiribati shall be
allowed as a credit against Australian tax payable in respect
of that income.
2 Where a company which is a resident of Kiribati and is not
a resident of Australia for the purposes of Australian tax
pays a dividend to a company which is a resident of Australia
and which controls directly or indirectly not less than 10
per cent of the voting power of the firstmentioned company,
the credit referred to in paragraph 1 shall include the
Kiribati tax paid by that firstmentioned company in respect
of that portion of its profits out of which the dividend is paid.
3 For the purpose of paragraphs 1 and 2, Kiribati tax paid
shall include an amount equivalent to any Kiribati tax forgone.
4 In paragraph 3, the term "Kiribati tax forgone" means the
amount which, under the law of Kiribati relating to Kiribati
tax and in accordance with this Agreement, would have been
payable as Kiribati tax on income or a payment but for an
exemption from, or reduction of, Kiribati tax on that income
or payment resulting from the operation of:
(a) section 82 and Schedule 8 or section 90 (4) of the
Income Tax Act 1990 in so far as those provisions were in
force on, and have not been modified since, the date of
signature of this Agreement or have been modified only in
minor respects so as not to affect their general character; or
(b) any other provision which may subsequently be made
granting an exemption from or reduction of tax which the
authorised representatives of the Government of Australia and
of the Government of Kiribati mutually determine in writing
to be of a substantially similar character, provided that
such provisions are not modified thereafter or are modified
only in minor respects so as not to affect their general character.
5 The provisions of paragraphs 3 and 4 shall not apply in
respect of income or a payment attributable to the provision
of services provided directly or indirectly to a person who
is a resident of Australia, except where the services are in
the nature of tourism or communication services or services
provided to manufacturing, mining, construction, fishing or
agricultural activities carried on in Kiribati.
6 The provisions of paragraphs 3, 4 and 5 shall apply only in
relation to income or a payment derived in any of the first
10 years of income in relation to which this Agreement has
effect by virtue of subparagraph (a) (ii) of Article 27 and
in any later year of income that may be mutually determined
in an exchange of letters for this purpose by the authorised
representatives of the Government of Australia and of the
Government of Kiribati.
7 In the case of Kiribati, subject to the provisions of the
law of Kiribati from time to time in force which relate to
the allowance of a credit against Kiribati tax of tax paid in
a country outside Kiribati (which shall not affect the
general principle of this Article), Australian tax paid under
the law of Australia and in accordance with this Agreement,
whether directly or by deduction, in respect of income
derived by a person who is a resident of Kiribati from
sources in Australia shall be allowed as a credit against
Kiribati tax payable in respect of that income.
ARTICLE 24
Mutual Agreement Procedure
1 Where a person who is a resident of one of the Contracting
States considers that the actions of the competent authority
of one or both of the Contacting States result or will result
for the person in taxation not in accordance with this
Agreement, the person may, notwithstanding the remedies
provided by the national laws of those States, present a case
to the competent authority of the Contracting State of which
the person is a resident. The case must be presented within 3
years from the first notification of the action giving rise
to taxation not in accordance with this Agreement.
2 The competent authority shall endeavour, if the claim
appears to it to be justified and if it is not itself able to
arrive at an appropriate solution, to resolve the case with
the competent authority of the other Contracting State, with
a view to the avoidance of taxation not in accordance with
this Agreement. The solution so reached shall be implemented
notwithstanding any time limits in the national laws of the

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Contracting States.
3 The competent authorities of the Contracting States shall
jointly endeavour to resolve any difficulties or doubts
arising as to the application of this Agreement.
4 The competent authorities of the Contracting States may
communicate with each other directly for the purpose of
giving effect to the provisions of this Agreement.
ARTICLE 25
Exchange of Information
1 The competent authorities of the Contracting States shall
exchange such information as is necessary for the carrying
out of this Agreement or of the national laws of the
Contracting States concerning the taxes to which this
Agreement applies in so far as the taxation under those laws
is not contrary to this Agreement. The exchange of
information is not restricted by Article 1. Any information
received by the competent authority of one of the Contracting
States shall be treated as secret in the same manner as
information obtained under the national laws of that State
and shall be disclosed only to persons or authorities
(including courts and administrative bodies) concerned with
the assessment or collection of, enforcement or prosecution
in respect of, or the determination of appeals in relation
to, the taxes to which this Agreement applies and shall be
used only for such purposes.
2 In no case shall the provisions of paragraph 1 be construed
so as to impose on the competent authority of one of the
Contracting States the obligation:
(a) to carry out administrative measures at variance with
the laws or the administrative practice of that or of the
other Contracting State; or
(b) to supply particulars which are not obtainable under
the laws or in the normal course of the administration of
that or of the other Contracting State; or
(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or to supply information the disclosure of
which would be contrary to public policy.
ARTICLE 26
Diplomatic and Consular Officials
Nothing in this Agreement shall affect the fiscal
privileges of diplomatic or consular officials under the
general rules of international law or under the provisions of
special international agreements.
ARTICLE 27
Entry into Force
This Agreement shall enter into force on the date on which
the Contracting States exchange notes through the diplomatic
channel notifying each other that the last of such things has
been done as is necessary to give this Agreement the force of
law in Australia and in Kiribati, as the case may be, and, in
that event, this Agreement shall have effect:
(a) in Australia:
(i) in respect of withholding tax on income that is
derived by a nonresident, in relation to income derived on or
after 1 July next following the date on which the Agreement
enters into force;
(ii) in respect of other Australian tax, in relation to
income, profits or gains of any year of income beginning on
or after 1 July next following the date on which the
Agreement enters into force;
(b) in Kiribati:
in respect of Kiribati tax, in relation to income, profits or
gains of any tax year beginning on or after 1 January next
following the date on which the Agreement enters into force.

ARTICLE 28
Termination
This Agreement shall continue in effect indefinitely, but
either of the Contracting States may, on or before 30 June in
any calendar year beginning after the expiration of 5 years
from the date of its entry into force, give to the other
Contracting State through the diplomatic channel written
notice of termination and, in that event, this Agreement
shall cease to be effective:
(a) in Australia:
(i) in respect of withholding tax on income that is
derived by a nonresident, in relation to income derived on or
after 1 July next following the date on which the notice of
termination is given;
(ii) in respect of other Australian tax, in relation to
income, profits or gains of any year of income beginning on
or after 1 July next following the date on which the notice
of termination is given;
(b) in Kiribati:
in respect of Kiribati tax, in relation to income, profits or
gains of any tax year beginning on or after 1 January next
following the date on which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, duly authorised
thereto, have signed this Agreement.
DONE in duplicate at CANBERRA this TWENTY-FIFTH day of MARCH
One thousand nine hundred and ninety-one in the English language.
FOR AUSTRALIA FOR THE REPUBLIC OF KIRIBATI
PAUL KEATING TEATAO TEANNAKI".