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International Tax Agreements Amendment Act 1995

  • - C2004A04977
  • No longer in force
Act No. 127 of 1995 as made
An Act to amend the International Tax Agreements Act 1953
Administered by: Treasury
Date of Assent 14 Nov 1995
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016
 

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127, 1995

Making Information
- Assented to 14 November 1995

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - TABLE OF PROVISIONS

CONTENTS
Section
1. Short title
2. Commencement
3. Schedule
SCHEDULE
AMENDMENTS OF THE INTERNATIONAL TAX AGREEMENTS ACT 1953 RELATING
TO TAX AGREEMENT WITH THE CZECH REPUBLIC

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - LONG TITLE

An Act to amend the International Tax Agreements Act 1953

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - SECT 1
Short title

1. This Act may be cited as the International Tax Agreements Amendment Act 1995.


(Minister's second reading speech made in-
House of Representatives on 19 October 1995
Senate on 23 October 1995)

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - SECT 2
Commencement

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

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - SECT 3
Schedule

3. The Act specified in the Schedule to this Act is amended in accordance with the applicable items in the Schedule.

INTERNATIONAL TAX AGREEMENTS AMENDMENT ACT 1995 No. 127 of 1995 - SCHEDULE 1

SCHEDULE Section 3
AMENDMENTS OF THE INTERNATIONAL TAX AGREEMENTS ACT 1953 RELATING
TO TAX AGREEMENT WITH THE CZECH REPUBLIC
1. Subsection 3(1):
Insert the following definition:
"the Czech agreement means the Agreement between Australia and the
Czech Republic 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 40.".
2. After section 11ZD:
Insert:
Agreement with the Czech Republic
"11ZE. Subject to this Act, on and after the date of entry into
force of the Czech agreement, the provisions of the agreement, so far
as those provisions affect Australian tax, have the force of law
according to their tenor.".
3. After Schedule 39:
Insert:
"SCHEDULE 40 Section 3
AGREEMENT BETWEEN AUSTRALIA AND THE CZECH REPUBLIC FOR THE AVOIDANCE
OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH
RESPECT TO TAXES ON INCOME
AUSTRALIA AND THE CZECH REPUBLIC,
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 the Czech Republic:
the taxes on income.
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 the Czech Republic 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:

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(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 "Czech Republic", when used in a geographical sense
means the territory over which the Czech Republic, under Czech
legislation and in accordance with international law, may exercise its
sovereign rights;
(c) the terms "a Contracting State" and "the other Contracting State"
mean Australia or the Czech Republic, as the context requires;
(d) the term "person" includes an individual, a company and any other
body of persons;
(e) the term "company" means any body corporate or any entity which
is treated as a company or body corporate for tax purposes;
(f) the terms "enterprise of a Contracting State" and "enterprise of
the other Contracting State" mean an enterprise carried on by a
resident of Australia or an enterprise carried on by a resident of the
Czech Republic, as the context requires;
(g) the term "tax" means Australian tax or Czech tax as the context
requires, but does not include any penalty or interest imposed under
the law of either Contracting State relating to its tax;
(h) the term "Australian tax" means tax imposed by Australia, being
tax to which this Agreement applies by virtue of Article 2;
(i) the term "Czech tax" means tax imposed by the Czech Republic,
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;
(ii) in the case of the Czech Republic, 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
Resident
1. For the purposes of this Agreement, a person is a resident of a
Contracting State if that person is a resident of that State for the
purposes of its tax.
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 person shall be deemed to be a resident solely of the
Contracting State in which a permanent home is available to the person,
or 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
personal and economic relations are closer.
4. For the purposes of paragraph 3, an individual's citizenship or
nationality of a Contracting State shall be a factor in determining the
degree of the person's personal and economic relations with that State.
5. Where by reason of the provisions of paragraph 1 a person other than
an individual is a resident of both Contracting States, 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;

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(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 12 months.
3. An enterprise shall not be deemed to have a permanent establishment
merely by reason of:
(a) the use of facilities solely for the purpose of storage, display
or delivery of goods or merchandise belonging to the enterprise; or
(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of storage, display or delivery;
or
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another
enterprise; or
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise, or for collecting
information, for the enterprise; or
(e) the maintenance of a fixed place of business solely for the
purpose of activities which have a preparatory or auxiliary character
for the enterprise, such as advertising, the supplying of information,
or scientific research or similar activities.
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
12 months in connection with a building site, or a construction,
installation or assembly project, which is being undertaken in that
State; or
(b) it performs services, including consultancy or managerial
services, in that Contracting State through employees or other
personnel engaged by the enterprise for such purpose, but only where
such activities continue in that State for the same project or a
connected project for a period or periods aggregating more than 6
months within any 12 month period; or
(c) heavy 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 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
(b) in so acting, the person manufactures or processes in that State
for the enterprise goods or merchandise belonging to the enterprise.
6. An enterprise of 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 this Agreement
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 (immovable) 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 a
Contracting State, 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.

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3. The provisions of paragraph 1 shall apply to income derived from the
direct use, letting, or use in any other form of real property.
4. 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.
5. The provisions of paragraphs 1, 3 and 4 shall also apply to income
from real property of an enterprise and to income from real property
used for the performance of independent personal services.
Article 7
Business profits
1. The profits of an enterprise of a Contracting State shall be taxable
only in that State unless the enterprise carries on business in the
other Contracting State through a permanent establishment situated 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 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 that 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

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a resident of a Contracting State 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 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
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 on 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.
4. The provisions of paragraph 3 shall not apply in the case of fraud.
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. However, those dividends may also 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 laws of that State, but the
tax so charged shall not exceed:
(a) in Australia:
(i) 5 per cent of the gross amount of so much of the dividends as
has been franked (with imputed company tax payments) in accordance with
the laws of Australia relating to tax, where under those laws the rate
of tax on franked dividends paid to a non-resident by a company which
is a resident of Australia for the purposes of its tax does not exceed
5 per cent of the gross amount of the dividends;
(ii) 15 per cent of the gross amount of the dividends in all other
cases; and
(b) in the Czech Republic:
(i) 5 per cent of the gross amount of the dividends if the
dividends are paid to a company (other than a partnership) which holds
directly at least 20 per cent of the capital of the company paying the
dividends;
(ii) 15 per cent of the gross amount of the dividends in all other
cases.
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

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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 the Czech Republic for the purposes of
Czech 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
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.
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 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

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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 reception of, or the right to receive, visual images, or
sounds, or both, transmitted to the public by:
(i) satellite; or
(ii) cable, optic fibre or similar technology; or
(f) the use in connection with television or radio broadcasting, or
the right to use in connection with television broadcasting or radio
broadcasting, visual images, or sounds, or both transmitted by:
(i) satellite; or
(ii) cable, optic fibre or similar technology; or
(g) 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
(h) 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
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 (immovable 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

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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 4 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 activities of an
independent character shall be taxable only in that State unless such
services are performed in the other Contracting State and:
(a) the individual is present in that other State for a period or
periods exceeding in the aggregate 183 days within any 12 month period
commencing or ending in the year of income of that other State; or
(b) a fixed base is regularly available to the individual in that
other State for the purpose of performing the individual's activities,
in which case so much of the income as is attributable to that fixed
base may be taxed in that 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 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 any 12 month period
commencing or ending in the year of income of that other State; and
(b) the remuneration is paid by, or on behalf of, an employer who is
not a resident of that other State; and
(c) the remuneration is not deductible in determining taxable profits
of a permanent establishment or a fixed base which the employer has in
that other State.
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 or another
similar organ of a company which is a resident of the other Contracting
State may be taxed in that other State.
Article 17
Artistes and sportspersons
1. Notwithstanding the provisions of Articles 14 and 15, income derived
by entertainers (such as theatrical, motion picture, radio or
television artistes and musicians) or sportspersons 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
or sportsperson as such accrues not to that person but to another
person, that income may, notwithstanding the provisions of Articles 7,
14 and 15, be taxed in the Contracting State in which those activities
are exercised.
3. Notwithstanding the provisions of paragraph 1, income derived from
activities referred to in paragraph 1 and performed within the
framework of a cultural exchange agreed between Governments of the
Contracting States shall be exempt from tax in the Contracting State in
which these activities are exercised.
Article 18
Pensions and annuities

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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 (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 and trainees
Where a student or trainee, who is a resident of a Contracting State or
who was a resident of that State immediately before visiting the other
Contracting State and who is temporarily present in that other State
solely for the purpose of the student's or trainee's education,
receives payments from sources outside that other State for the purpose
of the student's or trainee's maintenance, education or training, those
payments shall be exempt from tax in that other State.
Article 21
Other income
1. Items of income of a resident of a Contracting State, wherever
arising, not dealt with in the foregoing Articles of this Agreement
shall be taxable only in that State.
2. 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 base
situated in the other Contracting State. In that case, the provisions
of Article 7 or 14, as the case may be, shall apply.
Article 22
Source of income
1. Income, profits or gains derived by a resident of the Czech Republic
which, under any one or more of Articles 6 to 8 and 10 to 19, may be
taxed in Australia shall for the purposes of the law of Australia
relating to Australian tax be deemed to be income from sources in
Australia.
2. Income, profits or gains derived by a resident of Australia which,
under any one or more of Articles 6 to 8 and 10 to 19, may be taxed in
the Czech Republic shall for the purposes of paragraph 1 of Article 23
and of the law of Australia relating to Australian tax be deemed to be
income from sources in the Czech Republic.
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), Czech tax paid under the law of
the Czech Republic 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 the Czech Republic shall be
allowed as a credit against Australian tax payable in respect of that
income.
2. Where a company which is a resident of the Czech Republic 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 Czech tax paid by that firstmentioned
company in respect of that portion of its profits out of which the

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dividend is paid.
3. The Czech Republic, when imposing taxes on its residents may include
in the tax base upon which those taxes are imposed the items of income
which, according to the provisions of this Agreement, may also be taxed
in Australia but shall allow as a deduction from the amount of tax
computed on that base an amount equal to that tax paid in Australia.
That deduction shall not, however, exceed that part of the Czech tax,
as computed before the deduction is given, which is appropriate to the
income which, in accordance with the provisions of those Articles, may
be taxed in Australia.
4. Where a resident of one of the Contracting States derives income
which, in accordance with the provisions of this Agreement is taxable
only in the other Contracting State, or is exempt from tax in the
firstmentioned State, that income may be taken into account in
calculating the amount of the tax payable on the remaining income of
that resident in the firstmentioned State.


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 4 years from the first
notification of the action giving rise to taxation not in accordance
with this Agreement.
2. The competent authority shall endeavour, if the claim appears to it
to be justified and if it is not itself able to arrive at an
appropriate solution, to resolve the case with the competent authority
of the other Contracting State, with a view to the avoidance of
taxation not in accordance with this Agreement. The solution so
reached shall be implemented notwithstanding any time limits in the
national laws of the Contracting States.
3. The competent authorities of the Contracting States shall jointly
endeavour to resolve any difficulties or doubts arising as to the
interpretation or application of this Agreement.
4. The competent authorities of the Contracting States may also
communicate with each other directly for any other purpose relating to
the interpretation or application of this Agreement.
Article 25
Exchange of information
1. The competent authorities of the Contracting States shall exchange
such information as is necessary for the carrying out of this Agreement
or of the national laws of the Contracting States concerning the taxes
to which this Agreement applies in so far as the taxation under those
laws is not contrary to this Agreement. The exchange of information is
not restricted by Article 1. Any information received by the competent
authority of 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
Members of diplomatic missions and consular posts
Nothing in this Agreement shall affect the fiscal privileges of members
of diplomatic missions and consular posts under the general rules of
international law or under the provisions of special international
agreements.
Article 27
Entry into force
Both Contracting States shall notify each other in writing of the
completion of their respective statutory and constitutional procedures
required for the entry into force of this Agreement. This Agreement
shall enter into force on the date of the last notification, and
thereupon the 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 January 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 the Czech Republic:
(i) in respect of tax withheld at source, in relation to income
derived on or after 1 January in the calendar year next
following that in which the Agreement enters into force;
(ii) in respect of other Czech tax, in relation to income derived
in any 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 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 January 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 the Czech Republic:
(i) in respect of tax withheld at source, in relation to income
derived on or after 1 January in the calendar year next
following that in which the notice is given;
(ii) in respect of other Czech tax, in relation to income derived
in 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 28th day of March, One thousand nine
hundred and ninety-five in the English and Czech languages, both texts
being equally authentic.
FOR AUSTRALIA: RALPH WILLIS
FOR THE CZECH REPUBLIC: IVAN KOC-RN-K".