Today, Australia and Israel have signed a new tax treaty which will open further opportunities for bilateral trade and investment. This follows the Federal Executive Council’s approval for Australia to sign the new tax treaty received earlier today.
Australia and Israel share a close friendship and longstanding trade and investment ties.
In 2017-18 total merchandise trade between Australia and Israel was worth over $1 billion, and Israel’s investment in Australia in 2017 was $301 million.
This new tax treaty will further strengthen the friendship and commercial relations between our two countries and provide greater opportunities to grow those relationships.
Key features of the treaty include:
- Reduced withholding tax rates to create a more favourable bilateral investment environment and also make it cheaper for Australian business to access foreign capital and technology;
- Rules to reduce potential double taxation, which can deter investment; and
- Providing greater tax certainty to taxpayers in both jurisdictions.
Importantly, the new treaty also includes OECD/G20 base erosion and profit shifting (BEPS) recommendations, demonstrating the Morrison Government’s continued commitment to tackling international tax avoidance practices.
The new treaty will enter into force after both countries have completed their domestic requirements and instruments of ratification have been exchanged.
Legislation will be introduced into the Australian Parliament as soon as practicable to give the treaty the force of law in Australia.
A copy of the text of the new treaty is available online.