The Assistant Treasurer, Senator Rod Kemp, today announced that, following exchanges of notes through the diplomatic channels indicating that the necessary procedures to give the agreements the force of law had been completed in each country, the Australia-South Africa Double Taxation Agreement entered into force on 21 December 1999 and the Australia-Slovak Republic Double Taxation Agreement entered into force on 22 December 1999.
Signature of the South African agreement and the Slovak agreement took place in Canberra on 1 July 1999 and 24 August 1999 respectively. Details of the agreements were made public at that time and legislation providing for the agreements to be given the force of law in Australia – the International Tax Agreements Amendment Act 1999 – received Royal Assent on 11 November 1999.
These are comprehensive agreements for the avoidance of double taxation in relation to all income flowing between Australia and South Africa, and Australia and the Slovak Republic. The allocations of taxing rights between the respective countries under the agreements generally accord with those provided for in Australia’s other modern comprehensive taxation agreements.
The agreement with South Africa will have effect in Australia for withholding tax purposes in respect of income derived on or after 1 January 2000. It will first have effect for other Australian taxes in relation to income, profits or gains of any year of income beginning on or after 1 July 2000. The agreement will first have effect in South Africa for withholding tax purposes in relation to amounts paid or credited on or after 1 January 2000. For other South African taxes covered by the agreement it will first apply in respect of years of assessment beginning on or after 1 January 2000.
The agreement with the Slovak Republic will have effect in Australia for withholding tax purposes in respect of income derived on or after 1 January 2000. It will have effect for other Australian taxes in relation to income, profits or gains of any year of income beginning on or after 1 July 2000. The agreement will first have effect in the Slovak Republic for withholding tax purposes in relation to amounts derived on or after 1 January 2000. For other Slovak taxes covered by the agreement it will first apply in relation to tax chargeable for any taxable year beginning on or after 1 January 2000.
The agreements limit the withholding tax or other tax that the source country may apply on certain dividends, interest or royalties payable to residents of the other country. Details of the practical application of those tax rate limits in relation to Australian withholding tax or income tax imposed on an assessment basis are available at offices of the Australian Taxation Office.
Formal notification of the entry into force of the agreements will be published in the Gazette as soon as practicable.
MELBOURNE
30 December 1999
Media Contacts:
Richard Allsop
Assistant Treasurer’s Office
(03) 9650 7274
Ariane Pickering
Australian Taxation Office
(02) 6216 2611