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Act No. 139 of 1992 as made
An Act to amend the Income Tax (International Agreements) Act 1953, and for related purposes
Administered by: Treasury
Date of Assent 23 Nov 1992
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016
 

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139, 1992

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - LONG TITLE

An Act to amend the Income Tax (International Agreements)
Act 1953, and for related purposes

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 1
Short title etc.

(Assented to 23 November 1992)
1.(1) This Act may be cited as the Income Tax (International Agreements) Amendment Act 1992.

(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 16 September 1992
Senate on 4 November 1992)
*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 Nos. 5, 96 and 214, 1991.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 2
Commencement

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

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 3
Interpretation

3. Section 3 of the Principal Act is amended:
(a) by omitting from subsection (1) the definition of "the Indian airline profits agreement";
(b) by inserting the following definitions in subsection (1):
" 'the Indonesian agreement' means the Agreement between the Government of Australia and the Government of the Republic of Indonesia 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 37;
'the Spanish agreement' means the Agreement between Australia and the Kingdom of Spain 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 39;
'the Vietnamese agreement' means the Agreement between the Government of Australia and the Government of the Socialist Republic of Vietnam 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 38;".

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 4
Repeal of section 11J (Airline profits agreement with the Republic of India)

4. Section 11J of the Principal Act is repealed.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 5

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

Agreement with the Republic of Indonesia
"11ZB. Subject to this Act, on and after the date of entry into force of the Indonesian 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 the Socialist Republic of Vietnam
"11ZC. Subject to this Act, on and after the date of entry into force of the Vietnamese 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 the Kingdom of Spain
"11ZD. Subject to this Act, on and after the date of entry into force of the Spanish agreement, the provisions of the agreement, so far as those provisions affect Australian tax, have the force of law according to their tenor.".

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 6
Repeal of Schedule 19 (Indian airline profits agreement)

6. Schedule 19 to the Principal Act is repealed.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SECT 7
Insertion of Schedules 37, 38 and 39 (Indonesian, Vietnamese and Spanish agreements)

7. 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 1992 No. 139 of 1992 - SECT 8
Savings - Indian airline profits agreement


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8. Even though section 11J of the Principal Act has been repealed by this Act, if a particular assessment of Australian tax would be affected by the repeal, the repeal is to be disregarded in making that assessment.

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1992 No. 139 of 1992 - SCHEDULE

SCHEDULE Section 7
"SCHEDULE 37 Section 3
AGREEMENT
BETWEEN
THE GOVERNMENT OF AUSTRALIA
AND
THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of Australia and the Government of the Republic of
Indonesia,
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 Indonesia:
the income tax imposed under the Undang-undang Pajak Penghasilan
1984 (Law No. 7 of 1983);
(b) 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.
2 This Agreement shall also apply to any identical or substantially
similar taxes which are imposed under the federal law of Australia or
the law of Indonesia 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 exploitation of
any of the natural resources of the seabed and subsoil of the
continental shelf;
(b) the term "Indonesia" means the territory under the sovereignty
of the Republic of Indonesia and such parts of the continental shelf
and the adjacent seas over which the Republic of Indonesia has
sovereignty, sovereign rights as well as other rights in accordance
with the 1982 United Nations Convention on the Law of the Sea;
(c) the terms "Contracting State", one of the "Contracting States"
and "other Contracting State" mean, as the context requires, Australia
or Indonesia, the Governments of which have concluded this Agreement;
(d) the term "person" includes an individual, a company and any
other body of persons;
(e) the term "company" means 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 Indonesia, as the context requires;
(g) the term "tax" means Australian tax or Indonesian tax, as the
context requires, but does not include any penalty or interest imposed

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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 "Indonesian tax" means tax imposed by Indonesia, 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 Indonesia, the Minister of Finance or
an authorised representative of the Minister.
2 The references in paragraph 4 of Article 10, paragraph 4 of Article
11, paragraph 4 of Article 12 and paragraph 3 of Article 22 to a
permanent establishment or fixed base situated in one of the
Contracting States include references to an enterprise's sales and
other business activities referred to in subparagraphs 1(b) and (c) of
Article 7 and to an individual's activities referred to in
subparagraph 1(b) of Article 14.
3 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 relating to the taxes to which this Agreement
applies in force at the time of the application.
ARTICLE 4
Residence
1 For the purposes of this Agreement, a person is a resident of one
of the Contracting States if the person is a resident of that
Contracting State under the law of that State relating to its 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:
(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 in neither of them, the person shall be deemed to be a resident
solely of the Contracting State with which the person's economic and
personal relations are 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 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", 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" includes 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 or a place of exploration for natural
resources;
(g) a farm, plantation or other place where agricultural, pastoral,
forestry or plantation activities are carried on;
(h) an installation, drilling rig or ship used for exploration for
or exploitation of natural resources, where that use continues for
more than 120 days;
(i) a building site or construction, installation or assembly
project or supervisory activities in connection with that site or
project, where that site, project or activities exist for more than
120 days;

(j) the furnishing of services, including consultancy services, by
an enterprise within one of the Contracting States through employees
or other personnel engaged by the enterprise for that purpose, if
those services are furnished, for the same or a connected project,
within that State for a period or periods aggregating more than 120
days within any 12 month period.
3 An enterprise shall not be deemed to have a permanent establishment
merely by reason of:

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(a) the use of facilities solely for the purpose of storage or
display of goods or merchandise belonging to the enterprise; or
(b) the maintenance of a stock of goods or mechandise belonging to
the enterprise solely for the purpose of storage or display; 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 preparatory or auxiliary character
for the enterprise, such as advertising or scientific research.
4 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 5 applies - shall be deemed to be
a permanent establishment of that enterprise in the firstmentioned
State if:
(a) in so acting, the person manufactures or processes in that State
for the enterprise goods or merchandise belonging to the enterprise;
or
(b) 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; or
(c) the person has no such authority, but habitually maintains in
the firstmentioned State a stock of goods or merchandise from which
the person regularly delivers goods or merchandise on behalf of the
enterprise.
5 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. However, when the
activities of such a broker or agent are carried on wholly or
principally on behalf of that enterprise itself or on behalf of that
enterprise and other enterprises controlling, or controlled by or
subject to the same common control as, that enterprise, the person
will not be considered a broker or agent of an independent status
within the meaning of this paragraph.
6 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.
7 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 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, 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.
Ships, boats 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 paragraph 1 shall also apply to income derived
from the direct use, letting or use in any other form of real
property.
5 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.

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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 in that other State. If the enterprise carries
on business in that manner, the profits of the enterprise may be taxed
in the other State but only so much of them as it attributable to:
(a) that permanent establishment; or
(b) sales in that other State of goods or merchandise of the same or
a similar kind as those sold through that permanent establishment; or
(c) other business activities carried on in that other State of the
same or a similar kind as those carried on through that permanent
establishment.
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 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. However, no such deduction
shall be allowed in respect of amounts, if any, paid (otherwise than
towards reimbursement of actual expenses) by the permanent
establishment to the head office of the enterprise or any of its other
offices, by way of royalties, fees or other similar payments in return
for the use of patents or other rights, or by way of commission, for
specific services performed or for management, or, except in the case
of a banking enterprise, by way of interest on money lent to the
permanent establishment. Likewise, no account shall be taken, in the
determination of the profits of a permanent establishment, of amounts
charged, (otherwise than towards reimbursement of actual expenses), by
the permanent establishment to the head office of the enterprise or
any of its other offices, by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission for specific services performed or for management, or,
except in the case of a banking enterprise, by way of interest on
money lent to the head office of the enterprise or any of its other
offices.
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 affects the operation of any law of one of
the Contracting States relating to tax imposed on profits derived by
nonresidents on insurance premiums collected, or from insurance
relating to risks arising or to property, in that State, whether or
not that law deems the existence of a permanent establishment in
relation to the relevant activity.
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

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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 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 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 ships or aircraft 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 or aircraft 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 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.
4 For the purposes of this Article, profits derived from the carriage
by ships or aircraft of passengers, livestock, mail, goods or
merchandise shipped in one of the Contracting States for discharge at
another place in that State shall be treated as profits from
operations 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 two 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 the 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 under the law of that State relating to 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 firstmentioned Contracting
State 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. The
competent authorities of the Contracting States shall by mutual
agreement settle the mode of application of this limitation.
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

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distribution is a resident under that law.
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 by any company which is a resident of Australia under
the law of Australia relating to its tax and which is also a resident
of Indonesia under the law of Indonesia relating to its tax.
6 Notwithstanding any other provisions of this Agreement, where a
company which is a resident of one of the Contracting States has a
permanent establishment in the other Contracting State, the profits of
the permanent establishment may be subjected to an additional tax in
that other State in accordance with its law, but the additional tax so
charged shall not exceed 15 per cent of the amount of such profits
after deducting from those profits the tax imposed on them in that
other State.
7 The provisions of paragraph 6 of this Article shall not affect the
rate of any such additional tax payable under any production sharing
contracts and contracts of work (or any other similar contracts)
relating to oil and gas or other mineral products negotiated by the
Government of Indonesia, its instrumentality, its relevant State oil
company or any other entity thereof with a person who is a resident of
Australia.
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. The
competent authorities of the Contracting States shall by mutual
agreement settle the mode of application of this limitation.
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 under the law of that State relating to its tax. Where, however,
the person paying the interest, whether the person is a resident of
one of the 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 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

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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.
7 Interest derived from the investment of official foreign exchange
reserve assets by the Government of one of the Contracting States, its
monetary institutions or a bank performing central banking functions
in that State shall be exempt from tax in the other Contracting State.
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:
(a) in the case of royalties described in subparagraphs 3(b) and (c)
and, to the extent to which they relate to those royalties, in
subparagraphs 3(d) and (f) - 10 per cent; and
(b) in all other cases - 15 per cent.
The competent authorities of the Contracting States shall by mutual
agreement settle the mode of application of these limitations.
3 The term "royalties" in this Article means payments, 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 initial application
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 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
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 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 under the law of that State relating to 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, having regard
to what they are paid 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
Agreement shall apply only to the lastmentioned amount. In that case,
the excess part of the amount of the royalties 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 In this Article, the term "payments" includes credits and the terms
"paid", "payer" and "person paying" have the corresponding meanings.
ARTICLE 13
Alienation of Property
1 Income, profits or gains derived by a resident of one of the

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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(a) In this Article, the term "real property" has the same meaning
as it has in Article 6.
(b) The situation of real property shall be determined for the
purposes of this Article in accordance with paragraph 3 of 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; in that case, so much of the income as is attributable to
activities exercised from that fixed base may also be taxed in the
other State; or
(b) the individual is present in that other State for a period or
periods exceeding 120 days in any period of 12 months; in that case,
so much of the income as is derived from the individual's activities
in that other State may also be taxed in that other State.
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, lawyers, engineers, architects, dentists and
accountants.
ARTICLE 15
Dependent Personal Services
1 Subject to the provisions of Articles 16, 18, 19 and 20, 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 120 days in any period of 12
months; 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 or any

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other similar organ 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
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 Notwithstanding the provisions of paragraphs 1 and 2, income
derived from activities referred to in paragraph 1 performed under a
cultural agreement or arrangement between the Contracting States shall
be exempt from tax in the Contracting State in which the activities
are exercised if the visit to that State is wholly or substantially
supported by funds of the other Contracting State, a local authority
or public institution of that other State.
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 Notwithstanding the provisions of paragraph 1, a pension (including
a government pension) or an annuity paid to a resident of one of the
Contracting States from sources in the other Contracting State may be
taxed in that other State but the tax so charged may not exceed 15 per
cent of the gross amount of the pension or annuity.
3 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.
4 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 to it
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 or national of that State; or
(b) did not become a resident of the 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
Professors and Teachers
1 Where a professor or teacher who is a resident of one of the
Contracting States visits the other Contracting State for a period not
exceeding 2 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 firstmentioned 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
Where a student, who is a resident of one 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 education, receives payments
from sources outside that other State for the purpose of the student's
maintenance or education, those payments shall be exempt from tax in
that other State.
ARTICLE 22
Income Not Expressly Mentioned

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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 23
Source of Income
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 22, may be taxed in the other Contracting State shall, for
the purposes of Article 24 and the law of each Contracting State
relating to its tax, be deemed to be income from sources in that other
State.
ARTICLE 24
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 against Australian
tax of tax paid in a country outside Australia (which shall not affect
the general principle of this Article), Indonesian tax paid under the
law of Indonesia 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 Indonesia shall be allowed
as a credit against Australian tax payable in respect of that income.

2 Where a company which is a resident of Indonesia and is not a
resident of Australia under the law of Australia relating to its 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 Indonesian tax paid by that
firstmentioned company in respect of that portion of its profits out
of which the dividend is paid.
3 Where a resident of Indonesia derives income from Australia which
may be taxed in Australia in accordance with the provisions of this
Agreement, the amount of Australian tax payable in respect of that
income shall be allowed as a credit against the Indonesian tax imposed
on that resident in respect of the income. The amount of credit,
however, shall not exceed that part of the Indonesian tax which is
appropriate to that income.
4 The amount of Australian tax payable on income derived by a resident
of Indonesia to whom paragraph 3 applies shall be increased, before
the application of that paragraph in that case, by an amount equal to
any amount paid by that resident under the Fringe Benefits Tax Act
1986 of Australia.
ARTICLE 25
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 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 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 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
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 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 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

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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 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
Miscellaneous
Nothing in this Agreement shall affect the operation of the Treaty
between Australia and the Republic of Indonesia on the Zone of
Cooperation in an Area between The Indonesian Province of East Timor
and Northern Australia, done over the Zone of Cooperation on 11
December 1989.
ARTICLE 29
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
Indonesia, 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 in the
calendar year next following that in 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 in
the calendar year next following that in which the Agreement enters
into force;
(b) in Indonesia:
(i) in respect of tax withheld at source, on or after 1 July in
the calendar year next following that in which the Agreement enters
into force; and
(ii) in respect of other Indonesian tax, for taxable years
beginning on or after 1 July in the calendar year next following that
in which the Agreement enters into force.
ARTICLE 30
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 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 income,
profits 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 Indonesia:
(i) in respect of tax withheld at source, on or after 1 July in
the calendar year next following that in which the notice of
termination is given;

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(ii) in respect of other Indonesian tax, for taxable years
beginning on or after 1 July 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 Jakarta this Twentysecond day of April One
thousand nine hundred and ninety two in the English language.
FOR THE GOVERNMENT OF
AUSTRALIA
FOR THE GOVERNMENT OF THE REPUBLIC OF INDONESIA
ALI ALATAS

"SCHEDULE 38 Section 3
AGREEMENT
BETWEEN
THE GOVERNMENT OF AUSTRALIA
AND
THE GOVERNMENT OF THE SOCIALIST REPUBLIC
OF VIETNAM
FOR
THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of Australia and the Government of the Socialist
Republic of Vietnam,
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 Vietnam:
(i) the income tax;
(ii) the profit tax; and
(iii) the withholding tax.
2. This Agreement shall also apply to any identical or substantially
similar taxes on income, profits or gains which are imposed under the
federal law of Australia or the law of Vietnam 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 "Vietnam" means the Socialist Republic of Vietnam, and,
when used in a geographical sense, includes national territory and any
area adjacent to the territorial waters of Vietnam and beyond the
territorial limit of Vietnam which in accordance with international
law has been designated an area within which the rights of the
Socialist Republic of Vietnam with respect to the exploration and the
exploitation of any natural resources of the seabed and subsoil and
water surface may be exercised;
(c) the term "Contracting State" means Australia or Vietnam, as the
context requires, the Governments of which have concluded this

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Agreement;
(d) the term "person" includes an individual, a company and any
other body of persons;
(e) the term "company" means any entity which is treated as a
company or body corporate for tax purposes;
(f) the terms "enterprise of a Contracting State" 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
Vietnam, as the context requires;
(g) the term "tax" means Australian tax or Vietnamese 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 ofArticle 2;
(i) the term "Vietnamese tax" means tax imposed by Vietnam, being
tax to which this Agreement applies by virtue ofArticle 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 Vietnam, 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 a
Contracting State:
(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 Vietnam, if the person is liable, under the law
of Vietnam, to tax therein by reason of the person's domicile,
residence, place of management of any other criterion of a similar
nature.
2. A person is not a resident of a Contracting State 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:
(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
person's economic and personal relations are 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 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", 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 183 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

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(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
a Contracting State and to carry on business through that permanent
establishment if:
(a) it carries on supervisory activities in that State for more than
183 days 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 by, for or
under contract with the enterprise.
5. A person acting in a Contracting State 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 concluded contracts on behalf of the enterprise, unless
the person's activities are limited to the purchasing of goods or
merchandise for the enterprise; or
(b) in so acting, the person manufactures or processes in that State
for the enterprise goods or merchandise belonging to that enterprise.
6. An enterprise of a Contracting State 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 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 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 a Contracting State, has a
permanent establishment in a Contracting State.
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":
(a) in the case of Australia, has the meaning which it has under the
laws of Australia and includes:
(i) 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
(ii) 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;
(b) in the case of Vietnam, means property which according to the
laws of Vietnam is immovable property, and includes:
(i) property accessory to immovable property;
(ii) rights to which the provisions of general law in respect of
landed property apply; and
(iii) usufruct of immovable property and rights to variable or
fixed payments as consideration for the working of, or the right to
work mineral deposits, sources, and other natural resources;
(c) does not include ships and aircraft.
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 paragraph 1 apply to income derived from the
direct use, letting or use in any other form, of real property.
5. The provisions of paragraphs 1, 3 and 4 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

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in the other Contracting State through a permanent establishment
situated in that other State. If the enterprise carries on business in
that manner, 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 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 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 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 or gains 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 a
Contracting State 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 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 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 ships or aircraft derived by a
resident of a Contracting State 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 or aircraft 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 or aircraft derived
by a resident of a Contracting State 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 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 profits from operations of
ships or aircraft confined solely to places in that State.
ARTICLE 9
Associated Enterprises
1. Where:
(a) an enterprise of a Contracting State participates directly or
indirectly in the management, control or capital of an enterprise of

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the other Contracting State; or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a Contracting State
and an enterprise of the other Contracting State,
and in either case conditions operate between the two 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
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, 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 of which an enterprise of a Contracting State 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 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. 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, in Australia, 15 per cent, and, in Vietnam, 10 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 a
Contracting State, carries on business in the other Contracting State
of which the company paying the dividends is a resident, through a
permanent establishment situated in that other State, or performs in
that other State independent personal services from a fixed base
situated in that other State, and the holding in respect of which the
dividends are paid is effectively connected with that permanent
establishment or fixed base. In 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 a Contracting
State, 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 by any company
which is a resident of Australia for the purposes of Australian tax
and which is also a resident of Vietnam for the purposes of Vietnamese
tax.
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. 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

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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 a
Contracting State, 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 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 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 a Contracting State, 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 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 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 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 a
Contracting State, 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 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 a Contracting State or outside both Contracting States a

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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 a Contracting
State 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 a Contracting State 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 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 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 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 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 Article 6.
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, 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 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 firstmentioned 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; and
(b) the remuneration is paid by, or on behalf of, an employer who

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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 a
Contracting State may be taxed in that State.
ARTICLE 16
Directors' Fees
Directors' fees and similar payments derived by a resident of a
Contracting State 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
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 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.
3. Any alimony or other maintenance payment arising in a Contracting
State 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 a
Contracting State 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 recipient 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 a Contracting State 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
Where a student, 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 the student's education, receives payments
from sources outside that other State for the purpose of the student's
maintenance or education, 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 a Contracting State 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 a Contracting
State 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, other than
income from real property as defined in paragraph 2 of Article 6,
derived by a resident of a Contracting State where that income is
effectively connected with a permanent establishment or fixed based
situated in the other Contracting State. In that case, the provision
of Article 7 or 14, as the case may be, shall apply.
ARTICLE 22

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Source of Income
1. 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 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 a Contracting
State 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 against Australian
tax of tax paid in a country outside Australia (which shall not affect
the general principle of this Article), Vietnamese tax paid under the
law of Vietnam 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 Vietnam shall be allowed as a
credit against Australian tax payable in respect of that income.
2. Where a company which is a resident of Vietnam 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 Vietnamese tax paid by that
firstmentioned company in respect of that portion of its profits out
of which the dividend is paid.
3. For the purposes of paragraphs 1 and 2, Vietnamese tax paid shall
include an amount equivalent to the amount of any Vietnamese tax
forgone.
4. In paragraph 3, the term "Vietnamese tax forgone" means an amount
which, under the law of Vietnam relating to Vietnamese tax and in
accordance with this Agreement, would have been payable as Vietnamese
tax on income but for an exemption from, or a reduction of, Vietnamese
tax on that income resulting from the operation of those provisions of
the laws of Vietnam which the Treasurer of Australia and the Minister
of Finance of Vietnam determine from time to time in letters exchanged
for this purpose to be provisions to which this paragraph applies.
Subject to its terms, such a determination of applicable provisions
shall be valid for as long as those provisions are not modified after
the date of that determination or have been modified only in minor
respects so as not to affect their general character.
5. Paragraphs 3 and 4 shall apply only in relation to those years that
may be determined by the Treasurer of Australia and the Minister of
Finance of Vietnam in letters exchanged for this purpose.
6. Where a resident of Vietnam derives income, profits or gains which
under the law of Australia and in accordance with this agreement may
be taxed in Australia, Vietnam shall allow as a credit against its tax
on the income, profits or gains an amount equal to the tax paid in
Australia.
ARTICLE 24
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 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 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

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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 a Contracting State 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 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 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
Vietnam, 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 in the
calendar year next following that in 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 in
the calendar year next following that in which the Agreement enters
into force;
(b) in Vietnam:
(i) in respect of taxes withheld at source, in relation to taxable
amounts paid on or after 1 January following the calendar year in
which the Agreement enters into force;
(ii) in respect of other Vietnamese tax, in relation to income,
profits or gains arising in the calendar year following the calendar
year in which the Agreement enters into force, and in subsequent
calendar years.
ARTICLE 28
Termination
The 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 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 income,
profits 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 Vietnam:
(i) in respect of taxes withheld at source, in relation to taxable
amounts paid on or after 1 January following the calendar year in
which the notice of termination is given;
(ii) in respect of other Vietnamese tax, in relation to income,
profits or gains arising in the calendar year following the calendar

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year in which the notice of termination is given, and in subsequent
calendar years.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have
signed this Agreement.
DONE in duplicate at Hanoi, this thirteenth day of April, One
thousand nine hundred and ninety-two in the English and Vietnamese
languages, both texts being equally authentic.
FOR THE GOVERNMENT
OF AUSTRALIA:
JOHN SYDNEY DAWKINS
Minister of State
for the Treasury
FOR THE GOVERNMENT
OF THE SOCIALIST
REPUBLIC OF VIETNAM:
HOANG QUY
Minister
of Ministry of Finance
"SCHEDULE 39 Section 3
AGREEMENT BETWEEN
AUSTRALIA
AND
THE KINGDOM OF SPAIN
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
Australia and the Kingdom of Spain,
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 the case of 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 the Commonwealth of
Australia;
(b) in the case of Spain:
(i) the Income Tax on Individuals (el Impuesto sobre la renta de
las Personas Fisicas); and
(ii) the Corporation Tax (el Impuesto sobre sociedades).
(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 Spain 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 the respective States relating to the taxes to
which this Agreement applies within a reasonable time after such
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 subparagraphs (i) to (vi)
inclusive) 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 and superjacent waters;
(b) the term "Spain" means the Spanish State and, when used
geographically, means the territory of the Spanish State including any
area outside the territorial sea in which, in accordance with
international law and domestic legislation, the Spanish State may
exercise jurisdiction or sovereign rights with respect to the seabed,
its subsoil and superjacent waters and their natural resources;
(c) the terms "Contracting State", "one of the Contracting States"
and "other Contracting State" means Australia or Spain, as the context

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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" means an enterprise
carried on by a resident of Australia or an enterprise carried on by a
resident of Spain, as the context requires;
(g) the term "tax" means Australian tax or Spanish 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 "Spanish tax" means tax imposed by Spain, being tax to
which this Agreement applies by virtue of Article 2;
(j) the term "competent authority" means:
(i) in the case of Australia, the Commissioner of Taxation or an
authorised representative of the Commissioner; and
(ii) in the case of Spain, the Minister of Economy and Finance or an
authorised representative of the Minister.
(2) In this Agreement, the terms "Australian tax" and "Spanish 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 by virtue of Article 2.
(3) 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
in force relating to the taxes to which this Agreement applies, at the
time of the application.
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 Spain, if the person is a resident of Spain for
the purposes of the law of Spain relating to Spanish taxes.
(2) A person is not a resident of a Contracting State 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 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 if in neither of them, the person shall be
deemed to be a resident solely of the Contracting State with which the
person's economic and personal relations are the closer.
For the purposes of the preceding subparagraphs, an individual's
citizenship or nationality of one of the Contracting States shall be a
factor in determining the degree of the individual's personal and
economic relations with that Contracting State.
(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", 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;
(h) a building site or construction, installation or assembly
project which exists for more than twelve 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;

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(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another
enterprise;
(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;
(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
twelve months in connection with a building site, or a construction,
installation or assembly project which is being undertaken in that
State; or
(b) a structure, installation, drilling rig, ship or other like
substantial equipment is used:
(i) for the exploration for, or exploitation of, natural
resources; or
(ii) in activities connected with that exploration or
exploitation,
in either case if used continuously or those activities continue for a
period of more than twelve months.
(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 binding the enterprise, unless the
activities of that person are limited to those mentioned in paragraph
(3) and are such that, if exercised through a fixed place of business,
would not make that fixed place of business a permanent establishment
under the provisions of that paragraph; or
(b) in so acting, the person manufactures or processes in that State
for the enterprise goods or merchandise belonging to the enterprise,
provided that this provision shall apply only in relation to the goods
or merchandise so manufactured or processed.
(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
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 paragraphs
(5) of Article 11 and paragraph (5) of Article 12 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":
(a) in the case of Australia, has the meaning which it has under the
laws of Australia, and shall also include:
(i) a lease of land and any other interest in or over land,
whether improved or not;
(ii) a right to receive variable or fixed payments as
consideration for the exploitation of or the right to explore for or
exploit, or in respect of the proceeds from the exploitation of,
mineral deposits, oil or gas wells, quarries or other places of
extraction or exploitation of natural resources; and

(b) in the case of Spain, means immovable property according to the
laws of Spain, and shall also include:
(i) property accessory to immovable property;
(ii) rights to which the provisions of the general law respecting
landed property apply;
(iii) usufruct of immovable property; and

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(iv) a right to receive variable or fixed payments as
consideration for the exploitation of or the right to explore for or
exploit, or in respect of the proceeds from the exploitation of,
mineral deposits, oil or gas wells, quarries or other places of
extraction or exploitation of natural resources.
(3) A lease of land, any other interest in or over land and any right
referred to in any of the subparagraphs of paragraph (2) shall be
regarded as situated where the land, mineral deposits, oil or gas
wells, quarries or natural resources, as the case may be, are
situated, or where the exploration may take place.
(4) The provisions of paragraph (1) shall apply to income derived from
the direct use, letting or use in any other form of real property.
(5) The provisions of paragraphs (1), (3) and (4) shall also apply to
the income from real property of an enterprise and to income from real
property used for the performance of independent personal services.
(6) Where the ownership of shares or other rights in a company or
other entity entitles the owner of such shares or rights to the
enjoyment in any manner, direct use, letting or use in any other form
of real property held by the company or other entity, the income from
such enjoyment, direct use, letting, or use in any other form of such
rights may be taxed in the Contracting State in which the real
property is situated.
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 that permanent
establishment.
(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 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 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 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 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 trusts, 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 has, in accordance
with the principles of Article 5, a permanent establishment in that
other State,
the enterprise carried on by the trustee shall be deemed to be a

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business carried on in that other State by that resident through a
permanent establishment situated therein and the resident's share of
business profits shall be attributed to that permanent establishment.
ARTICLE 8
Ships and Aircraft
(1) Profits from the operation of ships or aircraft derived by a
resident of one of the Contracting States shall be taxable only in
that State.

(2) Notwithstanding the provisions of paragraph (1), profits of the
kind referred to in that paragraph from operations of ships or
aircraft confined solely to places in the other Contracting State may
be taxed 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 or aircraft
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 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 profits from operations 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 two 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
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, 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, 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, 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" 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.
(4) In the case of Spain, paragraph (2) of this Article shall not
apply to income which under the provisions of the Spanish taxation law
relating to transparent companies (Regimen de Transparencia Fiscal) is
attributable to shareholders of such companies, whether or not
distributed to such shareholders. Such income may be taxed by Spain in
accordance with its domestic law as long as its is not subject to the

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Spanish corporation tax (Impuesto Sobre Sociedades).
(5) 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 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.
(6) Where a company which is a resident of a Contracting State derives
profits or income from the other Contracting State, that other State
may not impose any tax on the dividends paid by the company, except
insofar as such dividends are paid to a resident of that other State
or insofar 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 a tax on the company's undistributed profits,
even if the dividends paid or the undistributed profits consist wholly
or partly or profits or income arising in such other State.
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) 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 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, and interest from any other form of indebtedness as well
as 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 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.
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 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) A person is a resident of one of the Contracting States for the
purpose of paragraph (5) if the person is a resident of that State
within the operation of the law of that State relating to its tax,
irrespective of the manner in which paragraph (3) or paragraph (4), as
the case may be, of Article 4 operates in relation to that person.
(7) 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 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) 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,

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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;
(b) the use of, or the right to use, any industrial, commerical or
scientific equipment;
(c) the supply of scientific, technical, industrial or commercial
knowledge or information;
(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 information as is mentioned in
subparagraph (c);
(e) the use of, or the right to use:
(i) motion picture films;
(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 therein, or performs in that other State independent personal
services 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.
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
deemd to arise in the State in which the permanent establishment or
fixed base is situated.
(6) A person is a resident of one of the Contracting States for the
purposes of paragraph (5) if the person is a resident of that State
within the operation of the law of that State relating to its tax,
irrespective of the manner in which paragraph (3) or paragraph (4), as
the case may be, of Article 4 operates in relation to that person.

(7) 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 or gains derived by a resident of one of the Contracting
States 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 one of
the Contracting States has in the other Contracting State or pertains
to a fixed base available to a resident of the firstmentioned 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 or aircraft operated
in international traffic, or of property other than real property
referred to in Article 6 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 or gains derived by a resident of one of the Contracting

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States 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) Income or gains from the alienation of shares, or comparable
interests in a company other than those mentioned in paragraph (4) of
this Article which is a resident of one of the Contracting States may
be taxed in that Contracting State if the recipient of the income or
gains, during a 12 month period preceding such alienation, had a
participation, directly or indirectly, of at least 10 per cent in the
capital of that company.
(6) 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 the preceding paragraphs of this Article apply.
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 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, 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 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 deductible in determining taxable
profits of 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 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 person who is a
resident of one of the Contracting States in the person's capacity 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
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) Notwithstanding the provisions of paragraphs (1) and (2), income
derived by a resident of one of the Contracting States as an
entertainer, from activities as an entertainer exercised in the other
Contracting State, shall be exempt from tax in the other Contracting
State if the visit to that other State is substantially supported by
public funds of the firstmentioned State or a political subdivision or

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local authority thereof, in connection with the performance of such
activities.
ARTICLE 18
Pensions and Annuities
(1) Subject to the provisions of paragraph (2) of Article 19, 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 recipient 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)(a) Any pension paid by, or out of funds created by, a
Contracting State or a political subdivision or local authority of
that Contracting State to an individual in respect of services
rendered to that State or subdivision or authority shall be taxable
only in that State.
(b) However, such pension shall be taxable only in the other
Contracting State if the individual is a resident of, and a citizen or
national of, that State.
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
provisions of Articles 15, 16 and 18 shall apply to remuneration and
pensions in respect of services rendered in connection with a business
carried on by a Contracting State or a political subdivision or a
local authority thereof.

ARTICLE 20
Students
Where a student, 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 education of the student, receives
payments from sources outside that other State for the purpose of
maintenance or education of the student, 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 such a case, the
provisions of Article 7 or Article 14, as the case may be, shall
apply.
ARTICLE 22
Source of Income
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 17 and 21, may be taxed in the other Contracting State shall, for
the purposes of Article 23 and of the income tax laws of the
respective Contracting States, be deemed to be income from sources in
that other 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 or other
relief against Australian tax of tax paid in a country outside
Australia (which shall not affect the general principle hereof),
Spanish tax paid under the law of Spain 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
Spain shall be allowed as a credit or be relieved against Australian

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tax payable in respect of that income.
(2) Where a company which is a resident of Spain 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 Spanish tax paid by that firstmentioned company in respect
of that portion of its profits out of which the dividend is paid.
(3) In the case of Spain, double taxation will be avoided in the
following manner:
(a) where a resident of Spain derives income or gains which, in
accordance with the provisions of this Agreement, may be taxed in
Australia, Spain shall allow:
(i) as a deduction from the tax on the income of that resident, an
amount equal to the tax on income or gains paid in Australia; and
(ii) in the case of a dividend paid by a company which is a
resident of Australia to a company which is a resident of Spain and
which holds directly at least 25 per cent of the capital of the
company paying the dividend, the deduction allowable shall include, in
addition to the amount deductible under subparagraph (i) of this
paragraph, that part of the tax effectively paid by the firstmentioned
company on the profits out of which the dividend is paid, which
relates to such dividends, provided that such amount of tax is
included, for this purpose, in the taxable base of the receiving
company;
such deduction in either case shall not, however, exceed that part of
the tax on income or gains, as computed before the deduction is given,
which is attributable, as the case may be, to the income or gains
which may be taxed in Australia; and
(b) where in accordance with any provision of this Agreement income
or gains derived by a resident of Spain is exempt from tax in Spain,
Spain may nevertheless, in calculating the amount of tax on the
remaining income or gains of such resident, take into account the
exempted income or gains.
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 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
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 domestic laws of the Contracting States concerning
the taxes to which this Agreement applies insofar 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.
(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;

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(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;

(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
Spain, as the case may be, and thereupon this Agreement shall have
effect:
(a) in both Contracting States, 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;
(b) in Australia, in respect of other tax, in relation to income 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;

(c) in Spain, in respect of other taxes on income, in relation to
taxes chargeable for the taxable year beginning on or after 1 January
in the calendar year next following that in 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 3 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 both Contracting States, 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;
(b) in Australia, in respect of other Australian tax, in relation to
income 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;
(c) in Spain, in respect of other taxes on income, in relation to
taxes chargeable for any taxable year beginning on or after 1 January
in the calendar year next following that in which the notice is given.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have
signed this Agreement.
DONE in duplicate at Canberra this TWENTY FOURTH day of MARCH One
thousand nine hundred and ninety-two in the English and Spanish
languages, both texts being equally authentic.
FOR AUSTRALIA:FOR THE KINGDOM OF SPAIN:
JOHN DAWKINSJOSE LUIS PARDOS
PROTOCOL TO THE AGREEMENT
BETWEEN
AUSTRALIA
AND
THE KINGDOM OF SPAIN
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
Australia and the Kingdom of Spain,
Having regard to the Agreement between Australia and the Kingdom of
Spain for the avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income signed today at
Canberra (in this Protocol called "the Agreement"),
Have agreed as follows:
If, in an agreement for the avoidance of double taxation that may
subsequently be made between Australia and a third State, there is
included a Non-discrimination Article, Australia shall immediately
inform the Kingdom of Spain in writing through the diplomatic channel
and shall enter into negotiations with the Kingdom of Spain in order
to provide the same treatment for the Kingdom of Spain as may be
provided for the third State.
This protocol shall form an integral part of the Agreement.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have
signed this Protocol.
DONE in duplicate at Canberra this TWENTY-FOURTH day of MARCH One
thousand nine hundred and ninety-two in the English and Spanish
languages, both texts being equally authentic.
FOR AUSTRALIA: FOR THE KINGDOM OF SPAIN:
JOHN DAWKINS JOSE LUIS PARDOS.".