Agreement in Principle to Revise the Convention between Japan and Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income

August 7, 2007

After negotiations since January this year, the Governments of Japan and Australia have reached an agreement in principle to revise the Convention between Japan and Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in 1970.
The new Convention contains extensive revisions of the existing Convention to modernize relevant provisions based on the international model tax convention. Reflecting close economic relations between Japan and Australia, it is intended to promote mutual investment as well as to prevent tax evasion. The new Convention reduces the limit of withholding tax rates imposed on dividends, interest and royalties paid between the two countries, and eliminates withholding taxes on certain inter-company dividends, and certain interest.
After the two governments complete the necessary procedures, the new Convention will be signed. It will be put into effect after it is approved by the Diet.

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