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Act No. 39 of 1996 as made
An Act to amend the International Tax Agreements Act 1953, and for related purposes
Originating Bill: Taxation Laws Amendment (International Tax Agreements) Bill 1996
Date of Assent 09 Oct 1996
Date of repeal 10 Mar 2016
Repealed by Amending Acts 1990 to 1999 Repeal Act 2016
 

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996
- Assented to 9 October 1996

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - TABLE OF PROVISIONS

Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1-Amendment of the International Tax
Agreements Act 1953
Schedule 2-Amendment of the Income Tax Assessment
Act 1936
Schedule 3-Amendment of the Taxation (Interest on
Overpayments and Early Payments) Act 1983

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - LONG TITLE

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

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SECT 1
1 Short title

This Act may be cited as the Taxation Laws Amendment (International Tax Agreements) Act 1996.


(Minister's second reading speech made in-
House of Representatives on 27 June 1996
Senate on 9 September 1996)

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SECT 2
2 Commencement

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

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SECT 3
3 Schedule(s)

Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SCHEDULE 1

Schedule 1-Amendment of the International Tax
Agreements Act 1953
1 Subsection 3(1)
Insert:
the Taipei agreement means:
(a) the Agreement between the Australian Commerce and Industry
Office and the Taipei Economic and Cultural Office concerning the
avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on income; and
(b) the annex to that agreement;
a copy of each of which in the English language is set out in
Schedule 41.
2 After section 11ZE
Insert:
11ZF Agreement with Taipei Economic and Cultural Office
(1) Subject to this Act, on and after the date of entry into
effect of the Taipei agreement, the provisions of the agreement, so
far as they affect Australian tax, have, and are taken to have had,
the force of law according to their tenor.
(2) For the purposes of the Assessment Act, if:
(a) a person derives income, profits or gains; and
(b) for the purposes of the Taipei agreement, the person is a
resident of the foreign territory; and
(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the
agreement, the income, profits or gains may be taxed in the
Australian territory;

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the income, profits or gains are taken to be derived from sources in
the Australian territory.
(3) For the purposes of the Assessment Act and Article 22 of the
Taipei agreement, if:
(a) a person derives income, profits or gains; and
(b) for the purposes of the agreement, the person is a resident of
the Australian territory; and
(c) under any of Articles 6 to 8, 10 to 17 and 19 to 21 of the
agreement, the income, profits or gains may be taxed in the foreign
territory;
the income, profits or gains are taken to have been derived from
sources in the foreign territory.
(4) The provisions of the Taipei agreement do not have the effect
of subjecting to Australian tax any interest or royalties paid by a
resident of the Australian territory to a resident of the foreign
territory that, apart from the agreement, would not be subject to
Australian tax.
(5) Section 170 of the Assessment Act does not prevent the
amendment of an assessment made before the commencement of this
section for the purpose of giving effect to the Taipei agreement.
(6) If:
(a) an exchange of letters takes place for the purposes of
paragraph 2 of the Annex mentioned in paragraph (b) of the
definition of Taipei agreement in subsection 3(1); and
(b) as a result of the exchange, income, profits or gains derived
by an organisation before the exchange become taxable under
paragraph 2 of the Annex solely in the Australian territory or
solely in the foreign territory; and
(c) before the exchange and whether before or after the
commencement of this section, an assessment was made in which the
income, profits or gains were not taxed in that way;
section 170 of the Assessment Act does not prevent the amendment of
the assessment for the purpose of taxing the income, profits or
gains in that way.
(7) In this section:
Australian territory means the territory mentioned in subparagraph
1(a) of Article 2 of the Taipei agreement.
foreign territory means the territory mentioned in subparagraph
1(b) of Article 2 of the Taipei agreement.
3 At the end of the Act
Add:
Schedule 41-Taipei agreement
AGREEMENT BETWEEN
THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE
AND
THE TAIPEI ECONOMIC AND CULTURAL OFFICE
CONCERNING THE AVOIDANCE OF DOUBLE TAXATION
AND
THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE AND THE TAIPEI ECONOMIC
AND CULTURAL OFFICE,
DESIRING to conclude an agreement concerning 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 territories.
Article 2
Taxes covered
1. The existing taxes to which this Agreement shall apply are:
(a) in the territory in which the taxation law administered by the
Australian Taxation Office is applied:
the income tax, and the resource rent tax in respect of offshore
projects relating to exploration for or exploitation of petroleum
resources, imposed under that law;
(b) in the territory in which the taxation law administered by the
Department of Taxation, Ministry of Finance, Taipei is applied:
the profit seeking enterprise income tax and the individual
consolidated income tax, imposed under that law.
2. This Agreement shall apply also to any identical or
substantially similar taxes on income, profits or gains which are
imposed after the date of signature of this Agreement in addition
to, or in place of, the existing taxes. The competent authorities
will notify each other as soon as practicable of any substantial
changes which have been made in the taxation laws of their
respective territories.

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Article 3
General definitions
1. In this Agreement, unless the context otherwise requires:
(a) the term "territory" means the territory referred to in
subparagraph 1(a) or 1(b) of Article 2, as the case requires;
(b) the term "person" includes an individual, a company and any
other body of persons;
(c) the term "company" means any body corporate or any entity
which is treated as a company or body corporate for tax purposes;
(d) the terms "enterprise of a territory" and "enterprise of the
other territory" mean respectively an enterprise carried on by a
resident of a territory or an enterprise carried on by a resident of
the other territory, as the context requires;
(e) the term "tax" means tax imposed under the law of a territory,
being a tax to which this Agreement applies by virtue of Article 2,
but does not include any penalty or interest imposed under that law;
(f) the term "competent authority" means, in the case of the
territory in which the taxation law administered by the Australian
Taxation Office is applied, the Commissioner of Taxation or an
authorised representative of the Commissioner and, in the case of
the territory in which the taxation law administered by the
Department of Taxation, Ministry of Finance, Taipei is applied, the
Director-General of the Department of Taxation or an authorised
representative of the Director-General.
2. As regards the application of this Agreement at any time in a
territory, any term not defined in this Agreement shall, unless the
context otherwise requires, have the meaning which it has at that
time under the law of that territory concerning the taxes to which
this Agreement applies, any meaning under the applicable tax law of
that territory prevailing over a meaning given to the term under
other laws of that territory.
Article 4
Residence
1. For the purposes of this Agreement, a person is a resident of a
territory if the person is a resident of that territory for the
purposes of its tax.
2. A person is not a resident of the territory in which the
taxation law administered by the Australian Taxation Office is
applied for the purposes of this Agreement if the person is liable
to tax in that territory in respect only of income from sources in
that territory.
3. Where by reason of the preceding provisions of this Article a
person, being an individual, is a resident of both territories, 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
territory in which a permanent home is available to the person;
(b) if a permanent home is available to the person in both
territories, or in neither of them, the person shall be deemed to be
a resident solely of the territory in which the person has an
habitual abode;
(c) if the person has an habitual abode in both territories or in
neither of them, the person shall be deemed to be a resident solely
of the territory 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 territories, then it shall
be deemed to be a resident solely of the territory in which its
place of incorporation 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;
(g) an agricultural, pastoral or forestry property;
(h) a building site or construction, installation or assembly
project which exists for more than 6 months; and
(i) the furnishing of services, including consultancy services in
a territory by an enterprise of the other territory through
employees or other personnel engaged by the enterprise for such
purpose, but only where those activities (for the same or a

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connected project) within the first-mentioned territory continue for
a period or periods aggregating more than 120 days within any twelve
month period.
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 of 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 territory and to carry on business through that permanent
establishment if:
(a) it carries on supervisory activities in that territory for
more than 6 months in connection with a building site, or a
construction, installation or assembly project, which is being
undertaken in that territory; or
(b) substantial equipment is being used in that territory by, for
or under contract with, the enterprise where that use continues for
more than 3 months.
5. A person acting in a territory on behalf of an enterprise of the
other territory - other than an agent of an independent status to
whom paragraph 6 applies - shall be deemed to be a permanent
establishment of that enterprise in the first-mentioned territory
if:
(a) the person has, and habitually exercises in that territory, 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
territory for the enterprise goods or merchandise belonging to the
enterprise.
6. An enterprise of a territory shall not be deemed to have a
permanent establishment in the other territory merely because it
carries on business in that other territory 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 territory
controls or is controlled by a company which is a resident of the
other territory, or which carries on business in that other
territory (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 an
enterprise, not being an enterprise of either territory, has a
permanent establishment in a territory.
Article 6
Income from real property
1. Income from real property may be taxed in the territory in which
the real property is situated.
2. In this Article, the term "real property":
(a) in the case of the territory in which the taxation law
administered by the Australian Taxation Office is applied, has the
meaning it has under the law of that territory, and includes:
(i) a lease of land and any other interest in or over land,
whether improved or not; and
(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 the territory in which the taxation law
administered by the Department of Taxation, Ministry of Finance,
Taipei is applied, has the meaning it has under the law of that
territory, and includes:
(i) property accessory to immovable property, livestock and

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equipment used in agriculture and forestry;
(ii) rights to which the provisions of the general law
respecting landed property apply; and
(iii) usufruct of immovable property and rights to variable or
fixed payments as consideration for the exploitation of or the right
to explore for or exploit, or in respect of the exploitation of,
mineral deposits, sources and other natural resources; but
(c) shall not include ships, boats 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 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 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 territory shall be taxable
only in that territory unless the enterprise carries on business in
the other territory through a permanent establishment situated in
that other territory. If the enterprise carries on business in that
manner, the profits of the enterprise may be taxed in the other
territory 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 territory carries on business in the other territory through a
permanent establishment situated in that other territory, there
shall be attributed to that permanent establishment in each
territory the profits which that permanent establishment 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 determining the profits of a permanent establishment, there
shall be allowed as deductions 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 territory 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 territory 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 territory is inadequate
to determine the profits to be attributed to a permanent
establishment, provided that that law shall be applied, so far as it
is practicable to do so, 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 territory relating to tax imposed on profits from insurance with
non-residents provided that if the relevant law in force in either
territory at the date of signature of this Agreement is varied
(otherwise than in minor respects so as not to affect its general
character) the parties to this Agreement shall consult each other
with a view to facilitating any amendment of this paragraph as may
be appropriate.
8. Where:
(a) a resident of a territory 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
territory 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 territory,
the enterprise carried on by the trustee shall be deemed to be a
business carried on in the other territory by that resident through
a permanent establishment situated in that other territory and that
share of business profits shall be attributed to that permanent
establishment.

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Article 8
Ships and aircraft
1. Profits derived by an enterprise of a territory from the
operation of ships or aircraft shall be taxable only in that
territory.
2. Notwithstanding the provisions of paragraph 1, such profits
shall be taxed in the other territory to the extent that they are
profits derived directly or indirectly from ship or aircraft
operations confined solely to places in that other territory.
3. The profits to which the provisions of paragraphs 1 and 2 apply
shall include profits from:
(a) the lease of ships or aircraft on a full time, voyage or
bareboat basis, and of containers and related equipment, which is
merely incidental to the international operation of ships or
aircraft by the lessor, provided that the leased ships or aircraft,
or the containers and related equipment, are used in international
operations by the lessee; and
(b) the operation of ships or aircraft derived through
participation in a pool, a joint business or 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 which are shipped in a territory and discharged at a
place in that territory shall be treated as profits from ship or
aircraft operations confined solely to places in that territory.
Article 9
Associated enterprises
1. Where
(a) an enterprise of a territory participates directly or
indirectly in the management, control or capital of an enterprise of
the other territory; or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a territory and
an enterprise of the other territory,
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 territory 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 territory is inadequate
to determine the profits 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 territory has been
charged to tax in that territory are also included, by virtue of the
provisions of paragraph 1 or 2, in the profits of an enterprise of
the other territory and charged to tax in that other territory, and
the profits so included are profits which might have been expected
to have accrued to that enterprise of the other territory 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
first-mentioned territory shall make an appropriate adjustment to
the amount of tax charged on those profits in the first-mentioned
territory. In determining such an adjustment, due regard shall be
had to the other provisions of this Agreement and for this purpose
the competent authorities shall if necessary consult each other.
Article 10
Dividends
1. Dividends paid by a company which is a resident of a territory
for the purposes of its tax, being dividends to which a resident of
the other territory is beneficially entitled, may be taxed in that
other territory.
2. However, those dividends may also be taxed in the territory of
which the company paying the dividends is a resident for the
purposes of its tax, and according to the law of that territory, but
the tax so charged shall not exceed:
(a) in the territory in which the taxation law administered by the
Australian Taxation Office is applied:
(i) 10 per cent of the gross amount of the dividends, to the
extent to which the dividends have been fully "franked" in
accordance with the federal law of that territory relating to its
income tax; and
(ii) 15 per cent of the gross amount of the dividends in all

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other cases; and
(b) in the territory in which the taxation law administered by the
Department of Taxation, Ministry of Finance, Taipei is applied:
(i) 10 per cent of the gross amount of the dividends, where the
dividends are paid to a company (other than a partnership) which
holds directly at least 25 per cent of the capital of the company
paying the dividends; and
(ii) 15 per cent of the gross amount of the dividends in all
other cases,
provided that if the relevant law in either territory at the date of
signature of this Agreement is varied, otherwise than in minor
respects so as to not affect its general character, the parties to
this Agreement shall consult each other with a view to facilitating
any amendment of this paragraph as may be appropriate.
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 territory of which the company making the
distribution is a resident for the purposes of its tax.
4. The provisions of paragraphs 1 and 2 shall not apply if the
person beneficially entitled to the dividends, being a resident of a
territory, carries on business in the other territory of which the
company paying the dividends is a resident, through a permanent
establishment situated in that other territory, or performs in that
other territory independent personal services from a fixed base
situated in that other territory, 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 Article 14, as the case may be, shall apply.
5. Dividends paid by a company which is a resident of a territory,
being dividends to which a person who is not a resident of the other
territory is beneficially entitled, shall be exempt from tax in that
other territory except 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 territory. This
paragraph shall not apply in relation to dividends paid by any
company which is a resident of the territory in which the taxation
law administered by the Australian Taxation Office is applied for
the purposes of tax imposed by that territory and which is also a
resident of the territory in which the taxation law administered by
the Department of Taxation, Ministry of Finance, Taipei is applied
for the purposes of tax imposed by that territory.
Article 11
Interest
1. Interest arising in a territory, being interest to which a
resident of the other territory is beneficially entitled, may be
taxed in that other territory.

2. However, that interest may also be taxed in the territory in
which it arises, and according to the law of that territory, 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 territory in which the income arises.
4. The provisions of paragraphs 1 and 2 shall not apply if the
person beneficially entitled to the interest, being a resident of a
territory, carries on business in the other territory, in which the
interest arises, through a permanent establishment situated in that
other territory, or performs in that other territory independent
personal services from a fixed base situated in that other
territory, 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 Article 14,
as the case may be, shall apply.
5. Interest shall be deemed to arise in a territory when the payer
is an authority of that territory or a subdivision or local
authority of that territory or a person who is a resident of that
territory for the purposes of its tax. Where, however, the person
paying the interest, whether the person is a resident of a territory
or not, has in a territory 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 territory in which the permanent establishment or fixed
base is situated.
6. Where, by reason of 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

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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 last-mentioned
amount. In that case, the excess part of the amount of the interest
paid shall remain taxable according to the law, relating to tax, of
each territory, but subject to the other provisions of this
Agreement.
Article 12
Royalties
1. Royalties arising in a territory, being royalties to which a
resident of the other territory is beneficially entitled, may be
taxed in that other territory.
2. However, those royalties may also be taxed in the territory in
which they arise, and according to the law of that territory, but
the tax so charged shall not exceed 12.5 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) of this paragraph; 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 broadcasting 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 paragraphs l and 2 shall not apply if the
person beneficially entitled to the royalties, being a resident of a
territory, carries on business in the other territory, in which the
royalties arise, through a permanent establishment situated in that
other territory, or performs in that other territory independent
personal services from a fixed base situated in that other
territory, 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 Article 14, as the case may be, shall apply.
5. Royalties shall be deemed to arise in a territory when the payer
is an authority of that territory or a subdivision or local
authority of that territory or a person who is a resident of that
territory for the purposes of its tax. Where, however, the person
paying the royalties, whether the person is a resident of a
territory or not, has in a territory 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 territory in which the permanent establishment or fixed
base is situated.
6. Where, by reason of a special relationship between the payer and
the person beneficially entitled to the royalties, or between both
of them and some other person, the amount of the royalties paid or
credited, having regard to what they are paid or credited for,
exceeds the amount which might have been expected to have been
agreed upon by the payer and the person so entitled in the absence
of such relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In that case, the excess part of
the amount of the royalties paid or credited shall remain taxable

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according to the law, relating to tax, of each territory, 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 territory
from the alienation of real property situated in the other territory
may be taxed in that other territory.
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 territory has in
the other territory or pertains to a fixed base available in that
other territory to a resident of the first-mentioned territory 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 territory.
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 territory of which the
enterprise operating those ships or aircraft is a resident.
4. Income, profits or gains derived by a resident of a territory
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 territory, may be taxed in that other
territory.
5. Nothing in this Agreement shall affect the application of a law
of a territory relating to the taxation of gains of a capital nature
derived from the alienation of any 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 territory
in respect of professional services or other activities of an
independent character shall be taxable only in that territory unless
a fixed base is regularly available to the individual in the other
territory 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 territory 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 l5
Dependent personal services
1. Subject to the provisions of Articles 16, 18 and l9, salaries,
wages and other similar remuneration derived by an individual who is
a resident of a territory in respect of an employment shall be
taxable only in that territory unless the employment is exercised in
the other territory. If the employment is so exercised, such
remuneration as is derived from that exercise may be taxed in that
other territory.
2. Notwithstanding the provisions of paragraph 1, remuneration
derived by an individual who is a resident of a territory in respect
of an employment exercised in the other territory shall be taxable
only in the first-mentioned territory if:
(a) the recipient is present in the other territory for a period
or periods not exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the year of income concerned;
and
(b) the remuneration is paid by, or on behalf of, an employer who
is not a resident of that other territory; 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 territory; and
(d) the remuneration is, or upon the application of this Article
will be, subject to tax in the first-mentioned territory.
3. Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised aboard a
ship or aircraft operated by an enterprise of a territory in
international traffic shall be taxable only in that territory.
Article 16
Directors' fees

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Directors' fees and similar payments derived by a resident of a
territory in the person's capacity as a member of the board of
directors of a company which is a resident of the other territory
may be taxed in that other territory.
Article 17
Entertainers 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) and sportspersons from their
personal activities as such may be taxed in the territory in which
these activities are exercised.
2. Where income in respect of the personal activities of an
entertainer or a sportsperson as such accrues not to that
entertainer or sportsperson but to another person, that income may,
notwithstanding the provisions of Articles 7, 14 and 15, be taxed in
the territory in which the activities of the entertainer or
sportsperson are exercised.
Article 18
Pensions and annuities
1. All pensions and annuities paid to a resident of a territory
shall be taxable only in that territory.
2. The term "annuity" means a stated sum payable periodically at
stated times during life or during a specified or ascertainable
period of time under an obligation to make the payments in return
for adequate and full consideration in money or money's worth.
Article 19
Public service
1. Salaries, wages and other similar remuneration, other than a
pension or annuity, paid by an authority administering a territory
or a subdivision of that territory or by a local authority of that
territory to any individual in respect of services rendered in the
discharge of public or administrative functions on behalf of such an
authority shall be taxable only in that territory. However, such
salaries, wages and other similar remuneration shall be taxable only
in the other territory if the services are rendered in that other
territory and the recipient is a resident of that other territory
who:
(a) is a citizen or national of that territory; or
(b) did not become a resident of that territory solely for the
purpose of performing the services.
2. The provisions of paragraph 1 shall not apply to salaries, wages
and other similar remuneration in respect of services rendered in
connection with any trade or business carried on by any authority
referred to in paragraph 1. In that case, the provisions of Article
15 or Article 16 , as the case may be, shall apply.
Article 20
Students
Where a student, who is a resident of a territory or who was a
resident of that territory immediately before visiting the other
territory and who is temporarily present in that other territory
solely for the purpose of the student's education, receives payments
from sources outside that other territory for the purpose of the
student's maintenance or education, those payments shall be exempt
from tax in that other territory.
Article 21
Other income
1. Items of income of a resident of a territory, wherever arising,
not dealt with in the foregoing Articles of this Agreement shall be
taxable only in that territory.
2. However, any such income derived by a resident of a territory
from sources in the other territory may also be taxed in that other
territory.
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 territory where that income is
effectively connected with a permanent establishment or fixed base
situated in the other territory. In that case, the provisions of
Article 7 or Article 14, as the case may be, shall apply.
Article 22
Methods of elimination of double taxation
Subject to the provisions of the law of a territory from time to
time in force relating to the allowance of a credit against tax
payable in that territory of tax paid outside that territory (which
shall not affect the general principle of this Article), tax paid
under the law of the other territory and in accordance with this
Agreement, whether directly or by deduction, in respect of income
derived by a person who is a resident of the first-mentioned
territory from sources in the other territory shall be allowed as a
credit against tax payable in the first-mentioned territory in
respect of that income. The amount of credit, however, shall not

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exceed the amount of the tax in the first-mentioned territory on
that income computed in accordance with its taxation laws and
regulations.
Article 23
Mutual agreement procedure
1. Where a person considers that the actions of the competent
authority of one or both of the territories result or will result
for the person in taxation not in accordance with this Agreement,
the person may, irrespective of the remedies provided by the
domestic law of those territories concerning taxes to which this
Agreement applies, present a case to the competent authority of the
territory of which the person is a resident. The case must be
presented within 3 years from the first notification of the action
resulting in 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 a
satisfactory solution, to resolve the case with the competent
authority of the other territory, with a view to the avoidance of
taxation which is not in accordance with this Agreement. The
solution so reached shall be implemented notwithstanding any time
limits in the domestic law of the territories.
3. The competent authorities shall jointly endeavour to resolve any
difficulties or doubts arising as to the interpretation or
application of this Agreement. They may also consult together for
the elimination of double taxation in cases not provided for in this
Agreement.
4. The competent authorities may communicate with each other
directly for the purpose of giving effect to the provisions of this
Agreement.
Article 24
Exchange of information
1. The competent authorities shall exchange such information as is
necessary for carrying out this Agreement or of the domestic law of
each of the territories concerning taxes to which this Agreement
applies insofar as the taxation under that law is not contrary to
this Agreement. Any information received by the competent authority
of a territory shall be treated as secret in the same manner as
information obtained under the domestic law of that territory and
shall be disclosed only to persons or authorities (including courts
and administrative bodies) concerned with the assessment or
collection of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes to which this
Agreement applies. Such persons or authorities shall use the
information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph 1 be construed so
as to impose on the competent authority of a territory the
obligation:
(a) to carry out administrative measures at variance with the law
or the administrative practice of that or of the other territory; or
(b) to supply information which is not obtainable under the law or
in the normal course of the administration of that or of the other
territory; 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 25
Entry into effect
This Agreement shall enter into effect on the date on which the
Australian Commerce and Industry Office and the Taipei Economic and
Cultural Office notify each other in writing that the last of such
things has been done as is necessary to give this Agreement effect
in the domestic law of the respective territories. This Agreement
shall have effect:
(a) in both territories, in respect of:
(i) withholding tax on income, profits or gains derived by a
non-resident, in relation to income, profits or gains derived on or
after the first day of the second month next following that in which
the Agreement enters into effect;
(ii) tax in relation to profits to which Article 8 applies, on
or after 1 January 1991;
(b) in respect of other tax of the territory in which the taxation
law administered by the Australian Taxation Office is applied, 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 effect;
(c) in respect of other tax of the territory in which the taxation
law administered by the Department of Taxation, Ministry of Finance,
Taipei is applied, in relation to income, profits or gains of any

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year of income beginning on or after 1 January in the calendar year
next following that in which the Agreement enters into effect.
Article 26
Termination
This Agreement shall continue in effect indefinitely, but an
authority administering either territory may, on or before 30 June
in any calendar year beginning after the expiration of 5 years from
the date of its entry into effect, give to the other written notice
of termination and, in that event, the Agreement shall cease to be
effective:
(a) in both territories, in respect of withholding tax on income,
profits or gains derived by a non-resident, in relation to income,
profits or gains derived on or after the first day of the second
month next following that in which the notice of termination is
given;
(b) in respect of other tax of the territory in which the taxation
law administered by the Australian Taxation Office is applied, 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;
(c) in respect of other tax of the territory in which the taxation
law administered by the Department of Taxation, Ministry of Finance,
Taipei is applied, in relation to income, profits or gains of any
year of income beginning on or after 1 January in the calendar year
next following that in which the notice of termination is given.
IN WITNESS WHEREOF the undersigned, being duly authorised, have
signed this Agreement.
DONE in duplicate at Canberra this 29th day of May 1996 in the
English and Chinese languages, both texts being equally authentic.
In case of any divergence of interpretation, the English text shall
prevail.
FOR THE AUSTRALIAN COMMERCE FOR THE TAIPEI ECONOMIC
AND INDUSTRY OFFICE: AND CULTURAL OFFICE:
(Signed:) (Signed:)
COLIN HESELTINE CHIEN-HSION HONG
ANNEX
THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE AND THE TAIPEI ECONOMIC
AND CULTURAL OFFICE,
HAVING REGARD to the Agreement concerning the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes
signed today at Canberra (in this Annex called "Agreement");
HAVE AGREED as follows:
1. If a subsequent agreement that is given effect under the
International Tax Agreements Act 1953 in the territory in which the
taxation law administered by the Australian Taxation Office is
applied, includes a Non-Discrimination Article, the parties to this
Annex will enter into negotiations with a view to providing the same
treatment as is provided for in the Non-Discrimination Article;
2. Income, profits or gains derived by an organisation, or its
successors, agreed by the competent authorities in an exchange of
letters for the purposes of this paragraph as carrying on activities
promoting trade, investment and cultural exchanges between the
territories, shall be taxable solely in the territory on whose
behalf the activities are carried on. The competent authorities will
also specify in their exchange of letters the date from which the
organisation shall be so taxable.
This Annex shall form an integral part of the Agreement.
IN WITNESS WHEREOF the undersigned, being duly authorised, have
signed this Annex.
DONE in duplicate at Canberra this 29th day of May 1996 in the
English and Chinese languages, both texts being equally authentic.
In case of any divergence of interpretation, the English text shall
prevail.
FOR THE AUSTRALIAN COMMERCE FOR THE TAIPEI ECONOMIC
INDUSTRY OFFICE: AND CULTURAL OFFICE:
(Signed:) (Signed:)
COLIN HESELTINE CHIEN-HSION HONG

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SCHEDULE 2

Schedule 2-Amendment of the Income Tax Assessment Act 1936
1 Subparagraph 23AF(17)(b)(ii)
Omit "between", substitute "applying to".
2 Section 317 (after subparagraph (b)(i) of the definition of
double tax agreement)
Insert:
; or (ia) concerning the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income; or
3 Application
The amendments made by this Schedule apply to an agreement that
enters into effect after the commencement of the Schedule.

TAXATION LAWS AMENDMENT (INTERNATIONAL TAX AGREEMENTS) ACT 1996 No. 39, 1996 - SCHEDULE 3

Schedule 3-Amendment of the Taxation (Interest on
Overpayments and Early Payments) Act 1983
1 Paragraphs 3A(1)(a), (2)(a) and (2)(b)
Omit "between", substitute "applying to".
2 Paragraph 3A(2)(c)
Omit "been entered into between", substitute "applied to".
3 Application
The amendments made by this Schedule apply to an agreement that
enters into effect after the commencement of the Schedule.