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Entry into force of comprehensive taxation agreement between Australia and the Republic of Kiribati



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TREASURER

fr ________________

PRESS [ [ release] ) NO. 62

NO EMBARGO

STATEMENT BY THE TREASURER. JOHN KERIN. M.P

ENTRY INTO FORCE OF COMPREHENSIVE TAXATION AGREEMENT

BETWEEN AUSTRALIA AND

THE REPUBLIC OF KIRIBATI

A comprehensive taxation agreement between Australia and Kiribati entered into force on 28 June 1991, following an exchange of notes between the two countries through the

diplomatic channel indicating that the necessary procedures to give the agreement the force of law had been completed in each country.

Signature of the agreement took place in Canberra on 25 March 1991. Details of the agreement were made public at the time and legislation providing for the agreement to be given the force of law in Australia - the Income Tax (International Agreements) Amendment Act 1991 - received Royal Assent on

26 June 1991.

The agreement is a comprehensive one for the avoidance of double taxation in relation to all income flowing between Australia and Kiribati. The allocation of taxing rights between the countries under the agreement generally accords with that provided for in Australia's other modern

comprehensive taxation agreements with developing countries in this region.

The agreement will have effect in Australia for withholding tax purposes in respect of income derived on or after 1 July 1991. It will first have effect for other Australian taxes in relation to income, profits or gains of the year of income beginning on 1 July 1991. The agreement will first have effect

in Kiribati for all Kiribati taxes in relation to income, profits or gains of its tax year beginning on 1 January 1992.

The agreement limits 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. The relevant tax rate limits are 20 per cent for dividends,

15 per cent for royalties and 10 per cent for interest. 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 from Taxation Offices.

Formal notification of the entry into force of the agreement will be published in the Gazette as soon as practicable.

CANBERRA 16 July 1991

I COMMONWEALTH PARLIAMENTARY LIBRARY CONTACT OFFICER : Telephone: Ken Allen

(06) 275 1155 (Work) (06) 292 1821 (Home)

MiCAH