Tax treaty negotiations will be held between Australia and Norway in Canberra next week, the first formal discussions to address Australia’s Most Favoured Nation (MFN) obligations.
Australia has similar MFN obligations with France, Italy, Switzerland, Austria, Finland, the Netherlands and the Republic of Korea.
The MFN clauses in the tax treaties with these eight countries were triggered by the reduction in withholding tax rates in the Australia/US Protocol, which entered into force on 12 May 2003.
Australia now has an obligation to enter into negotiations with each of these eight countries with a view to providing similar treatment in relation to withholding tax rates as agreed with the US.
Negotiations with the eight MFN countries will also provide an opportunity to update the existing treaty with each country to accommodate modern business practice and treaty policy where necessary.
As well as the MFN countries, Australia is also continuing negotiations for updating the existing treaty with Germany.
The Department of the Treasury has already sought comments from the business community on these eight MFN countries and Germany through the Tax Treaties Advisory Panel, and would welcome comments from all taxpayers that have transactions with these countries that could be affected by changes to the respective treaties.
This consultation process is designed to ensure that the renegotiated treaties recognise the day to day needs and experiences of all those who have dealings between these countries and Australia.
Interested parties are invited to make written submissions on these nine countries to the Department of the Treasury by 24 November 2003. Submissions should be e-mailed to: taxtreatiesunitconsultation@treasury.gov.au or addressed to:
Unit Manager
Tax Treaties Unit
International Tax and Treaties Division
The Department of the Treasury
Langton Crescent
PARKES ACT 2600