New Zealand - Austria Tax Treaty

Reprint as at 23 March 2007

Double Taxation Relief (Austria) Order 2007 (SR 2007/76)

Anand Satyanand, GovernorGeneral

Order in Council At Wellington this 19th day of March 2007 Present: His Excellency the GovernorGeneral in Council Pursuant to section BH 1 of the Income Tax Act 2004, His Excellency the GovernorGeneral, acting on the advice and with the consent of the Executive Council, makes the following order.

Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint. A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint. The Double Taxation Relief (Austria) Order 2007 is administered by the Inland Revenue Department. 1

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Title Commencement of order Commencement of agreement Purposes Arrangements have effect Schedule Agreement between New Zealand and the Republic of Austria with respect to taxes on income and on capital

Order 1

Title This order is the Double Taxation Relief (Austria) Order 2007.

Commencement of order This order comes into force on the 28th day after the date of its notiﬁcation in the Gazette.

Commencement of agreement The agreement set out in the Schedule comes into force on the date referred to in Article 27 of the agreement.

Purposes The arrangements speciﬁed in the agreement set out in the Schedule have been negotiated with the Republic of Austria for 1 or more of the purposes set out in section BH 1(2) of the Income Tax Act 2004.

Arrangements have effect The arrangements speciﬁed in the agreement set out in the Schedule have effect according to the agreement.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

Schedule cls 3, 4, 5 Agreement between New Zealand and the Republic of Austria with respect to taxes on income and on capital New Zealand and the Republic of Austria, desiring to conclude an Agreement with respect to taxes on income and on capital, Have agreed as follows:

Article 1 PERSONS COVERED This Agreement shall apply to persons who are residents of one or both of the Contracting States.

Article 2 TAXES COVERED 1.

This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political sub divisions, irrespective of the manner in which they are levied. There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elem ents of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation. The existing taxes to which the Agreement shall apply are in particular: (a) in Austria: (i) the income tax (die Einkommensteuer); (ii) the corporation tax (die Körperschaftsteuer); (iii) the land tax (die Grundsteuer); (iv) the tax on agricultural and forestry enterprises (die Abgabe von land und forstwirtschaftlichen Betrieben); (v) the tax on the value of vacant plots (die Abgabe vom Bodenwert bei unbebauten Grundstücken); (b) in New Zealand: 3

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

the income tax. The Agreement shall apply also to any identical or substan tially similar taxes that are imposed after the date of signa ture of the Agreement in addition to, or in place of, the exist ing taxes. The competent authorities of the Contracting States shall notify each other within a reasonable period of time of any signiﬁcant changes that have been made in their taxation laws.

Article 3 GENERAL DEFINITIONS 1.

For the purposes of this Agreement, unless the context other wise requires: (a) the term “person” includes an individual, a company and any other body of persons; (b) the term “company” means any body corporate or any entity that is treated as a body corporate for tax pur poses; (c) the term “enterprise” applies to the carrying on of any business; (d) the terms “enterprise of a Contracting State” and “enter prise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; (e) the term “international trafﬁc” means any transport by a ship or aircraft operated by an enterprise that has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely be tween places in the other Contracting State; (f) the term “competent authority” means: (i) in Austria: the Federal Minister of Finance or an authorised representative; (ii) in New Zealand: the Commissioner of Inland Revenue or an authorised representative; (g) the term “national”, in relation to a Contracting State, means:

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

(i)

(h)

(i)

any individual possessing the nationality or citi zenship of that Contracting State; and (ii) any legal person, partnership or association de riving its status as such from the laws in force in that Contracting State; the term “business” includes the performance of profes sional services and of other activities of an independent character; the terms “a Contracting State” and “the other Contract ing State” mean Austria or New Zealand as the context requires;

(j) (i)

the term “Austria” means the Republic of Aus tria; (ii) the term “New Zealand” means the territory of New Zealand but does not include Tokelau or the Associated Self Governing States of the Cook Is lands and Niue; it also includes any area beyond the territorial sea designated under New Zealand legislation and in accordance with international law as an area in which New Zealand may exer cise sovereign rights with respect to natural re sources. For the purposes of Articles 10, 11 and 12, a trustee subject to tax in a Contracting State in respect of dividends, interest or royalties shall be deemed to be the beneﬁcial owner of that interest or those dividends or royalties. As regards the application of the Agreement at any time by a Contracting State, any term not deﬁned therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Article 4 RESIDENT 1.

For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his or her domi cile, residence, place of management or any other criterion of a similar nature, and also includes that State and any polit ical subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then their status shall be determined as follows: (a) the individual shall be deemed to be a resident only of the State in which a permanent home is available to the individual; if a permanent home is available to the in dividual in both States, the individual shall be deemed to be a resident only of the State with which the in dividual’s personal and economic relations are closer (centre of vital interests); (b) if the State in which the individual has the centre of vital interests cannot be determined, or if a permanent home is not available to the individual in either State, the individual shall be deemed to be a resident only of the State in which the individual has an habitual abode; (c) if the individual has an habitual abode in both States or in neither of them, the individual shall be deemed to be a resident only of the State of which the individual is a national; (d) if the individual is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

Article 5 PERMANENT ESTABLISHMENT 1.

For the purposes of this Agreement, the term “permanent es tablishment” means a ﬁxed place of business through which the business of an enterprise is wholly or partly carried on. The term “permanent establishment” includes especially: (a) a place of management; (b) a branch; (c) an ofﬁce; (d) a factory; (e) a workshop, and (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. A building site, or a construction, installation or assembly pro ject, or supervisory activities in connection with that building site or construction, installation or assembly project, consti tutes a permanent establishment if it lasts more than twelve months. An enterprise shall be deemed to have a permanent establish ment in a Contracting State and to carry on business through that permanent establishment if: (a) for more than 6 months it carries on activities which consist of, or which are connected with, the exploration or exploitation of natural resources, including standing timber, situated in that State; (b) it furnishes services (including consultancy and inde pendent personal services), but only where activities of that nature continue within the State for a period or periods exceeding in the aggregate 183 days in any 12 month period commencing or ending in the year of in come concerned. Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to in clude: (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

Schedule

(b)

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

the maintenance of a stock of goods or merchandise be longing to the enterprise solely for the purpose of stor age, display or delivery; (c) the maintenance of a stock of goods or merchandise be longing to the enterprise solely for the purpose of pro cessing by another enterprise; (d) the maintenance of a ﬁxed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; (e) the maintenance of a ﬁxed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; (f) the maintenance of a ﬁxed place of business solely for any combination of activities mentioned in subpara graphs a) to e), provided that the overall activity of the ﬁxed place of business resulting from this combination is of a preparatory or auxiliary character. Notwithstanding the provisions of paragraphs 1 and 2, where a person—other than an agent of an independent status to whom paragraph 7 applies—is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an author ity to conclude contracts in the name of the enterprise, that en terprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person under takes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 5 which, if exercised through a ﬁxed place of business, would not make this ﬁxed place of business a permanent establishment under the provi sions of that paragraph. An enterprise shall not be deemed to have a permanent estab lishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their busi ness. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Article 6 INCOME FROM IMMOVABLE PROPERTY 1.

Income derived by a resident of a Contracting State from im movable property (including income from agriculture, forestry or ﬁshing) situated in the other Contracting State may be taxed in that other State. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the prop erty in question is situated. The term shall in any case include any natural resources, property accessory to immovable prop erty, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or ﬁxed payments as consideration for the working of, or the right to work, mineral deposits, sources and other nat ural resources; ships, boats and aircraft shall not be regarded as immovable property. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immov able property. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise.

Article 7 BUSINESS PROFITS 1.

The proﬁts of an enterprise of a Contracting State shall be tax able only in that State unless the enterprise carries on business in the other Contracting State through a permanent establish ment situated therein. If the enterprise carries on business as aforesaid, the proﬁts of the enterprise may be taxed in the other State but only so much of them as is attributable to that per manent establishment. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting 9

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the proﬁts which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. In determining the proﬁts of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including execu tive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. No proﬁts shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. For the purposes of the preceding paragraphs, the proﬁts to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufﬁcient reason to the contrary. Where proﬁts include items of income which are dealt with separately in other Articles of this Agreement, then the provi sions of those Articles shall not be affected by the provisions of this Article. Income or proﬁts from any kind of insurance shall be taxed in accordance with the laws of either Contracting State. How ever, if an enterprise of one of the Contracting States derives premiums paid for the insurance of risks situated in the other State, otherwise than through a permanent establishment situ ated in that other State, the taxable income or proﬁts derived by the enterprise from the insurance of those risks shall in that other State not exceed 10 per cent of the gross premiums paid for the insurance of those risks.

Article 8 SHIP AND AIRCRAFT OPERATIONS 1. 10

Proﬁts from ship or aircraft operations derived by a resident of a Contracting State shall be taxable only in that State.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

Notwithstanding the provisions of paragraph 1, such proﬁts may be taxed in the other Contracting State where they are proﬁts from ship or aircraft operations conﬁned solely to places in that other State. The provisions of paragraphs 1 and 2 shall also apply to proﬁts from the participation in a pool, a joint business or an inter national operating agency. For the purposes of this Article, proﬁts derived from the car riage by ships or aircraft of passengers, livestock, mail, goods or merchandise which are shipped in a Contracting State for discharge at a place in that State shall be treated as proﬁts from ship or aircraft operations conﬁned solely to places in that State.

Article 9 ASSOCIATED ENTERPRISES 1.

Where (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Con tracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or ﬁnancial relations which differ from those which would be made between in dependent enterprises, then any proﬁts which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be in cluded in the proﬁts of that enterprise and taxed accordingly. Where a Contracting State includes in the proﬁts of an enter prise of that State—and taxes accordingly—proﬁts on which an enterprise of the other Contracting State has been charged to tax in that other State and the proﬁts so included are proﬁts which would have accrued to the enterprise of the ﬁrstmen tioned State if the conditions made between the two enterprises had been those which would have been made between inde 11

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

pendent enterprises, then that other State shall make an appro priate adjustment to the amount of the tax charged therein on those proﬁts. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the com petent authorities of the Contracting States shall if necessary consult each other.

Article 10 DIVIDENDS 1.

Dividends paid by a company which is a resident of a Con tracting State to a resident of the other Contracting State may be taxed in that other State. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneﬁcial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 15 per cent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the proﬁts out of which the dividends are paid. The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, min ing shares, founders’ shares or other rights, not being debt claims, participating in proﬁts, as well as income which is sub jected to the same taxation treatment as income from shares by the laws of the State of which the company making the distri bution is a resident. The provisions of paragraphs 1 and 2 shall not apply if the beneﬁcial owner of the dividends, being a resident of a Con tracting State, carries on business in the other Contracting State of which the company paying the dividends is a resi dent through a permanent establishment situated therein and the holding in respect of which the dividends are paid is effect ively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. Where a company which is a resident of a Contracting State derives proﬁts or income from the other Contracting State, that other State may not impose any tax on the dividends paid by

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor sub ject the company’s undistributed proﬁts to a tax on the com pany’s undistributed proﬁts, even if the dividends paid or the undistributed proﬁts consist wholly or partly of proﬁts or in come arising in such other State.

Article 11 INTEREST 1. 2.

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneﬁcial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. Notwithstanding the provisions of paragraph 2, interest shall be taxable only in the Contracting State of which the recipient is a resident, if such recipient is the beneﬁcial owner of the interest and if such interest is paid: (a) to the Government of the Republic of Austria or to the Government of New Zealand; (b) in respect of a loan made, guaranteed or insured, or any other debtclaim or credit guaranteed or insured, by (i) in the case of Austria: the Oesterreichische Kon trollbank Aktiengesellschaft; (ii) in the case of New Zealand: an entity of a similar nature. The term “interest” as used in this Article means income from debtclaims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in debtor’s proﬁts, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as all other income treated as income from money lent by the laws of the Contracting State in which the income arises, 13

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

but does not include any income which is treated as a dividend under Article 10. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. The provisions of paragraphs 1 and 2 shall not apply if the beneﬁcial owner of the interest, being a resident of a Contract ing State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein and the debtclaim in respect of which the in terest is paid is effectively connected with such permanent es tablishment. In such case the provisions of Article 7 shall ap ply. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the per son paying the interest, whether the person is a resident of a Contracting State or not, has in a Contracting State a perman ent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is deductible in determining the income, proﬁts or gains at tributable to that permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated. Where, by reason of a special relationship between the payer and the beneﬁcial owner or between both of them and some other person, the amount of the interest, having regard to the debtclaim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneﬁcial owner in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard be ing had to the other provisions of this Agreement.

Article 12 ROYALTIES 1.

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneﬁcial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. The term “royalties” as used in this Article means payments of any kind, whether periodical or not, and however described or computed, to the extent to which they are made as consid eration for: (a) the use of, or the right to use, any copyright (including the use of or the right to use any literary, dramatic, musical, or artistic works, sound recordings, ﬁlms, broadcasts, cable programmes, or typographical ar rangements of published editions), patent, design or model, plan, secret formula or process, trademark, or other like property or right; or (b) the use of, or the right to use, any industrial, scientiﬁc or commercial equipment; or (c) knowledge or information concerning industrial, com mercial or scientiﬁc experience. The provisions of paragraphs 1 and 2 shall not apply if the beneﬁcial owner of the royalties, being a resident of a Con tracting State, carries on business in the other Contracting State in which the royalties arise through a permanent estab lishment situated therein and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. Royalties shall be deemed to arise in a Contracting State when the payer is a person who is a resident of that State. Where, however, the person paying the royalties, whether the person is a resident of a Contracting State or not, has in a Contract ing State a permanent establishment in connection with which the liability to pay the royalties was incurred, and the royalties are deductible in determining the income, proﬁts or gains at tributable to that permanent establishment, then the royalties shall be deemed to arise in the State in which the permanent establishment is situated.

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Where, by reason of a special relationship between the payer and the beneﬁcial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneﬁcial owner in the absence of such relationship, the provisions of this Article shall apply only to the lastmentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 13 ALIENATION OF PROPERTY 1.

Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contract ing State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State. Gains from the alienation of ships or aircraft operated in inter national trafﬁc, or movable property pertaining to the oper ation of such ships or aircraft, shall be taxable only in the Con tracting State in which the enterprise alienating such ships, air craft or other property is a resident. Gains derived by a resident of a Contracting State from the alienation of shares deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State. Gains from the alienation of any property, other than that re ferred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

Article 14 INCOME FROM EMPLOYMENT 1.

Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the ﬁrstmentioned State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the year of income concerned, and (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (c) the remuneration is not deductible in determining the taxable proﬁts of a permanent establishment which the employer has in the other State. Notwithstanding the preceding provisions of this Article, re muneration derived in respect of an employment exercised aboard a ship or aircraft operated in international trafﬁc by a resident of a Contracting State may be taxed in that State.

Article 15 DIRECTORS’ FEES Directors’ fees and other similar payments derived by a resident of a Contracting State in that person’s capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Article 16 ENTERTAINERS AND SPORTSPERSONS 1.

Notwithstanding the provisions of Articles 7 and 14, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from that person’s personal activities as such exercised in the other Contracting State, may be taxed in that other State. Where income in respect of personal activities exercised by an entertainer or a sportsperson in that person’s capacity as such accrues not to the entertainer or sportsperson but to another person, that income may, notwithstanding the provisions of Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. The provisions of paragraphs 1 and 2 shall not apply to income derived by legal entities which carry on orchestras, theatres, ballet groups as well as to members of such cultural entities if such legal entities substantially are nonproﬁt entities in the long term and if this is certiﬁed by the competent authority of the State of residence.

Article 17 PENSIONS 1.

Pensions (including government service pensions) and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. Pensions and other payments made under the social security legislation of a Contracting State to a resident of the other Con tracting State shall be taxable only in that other State.

Article 18 GOVERNMENT SERVICE 1. (a)

Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdiv ision or authority shall be taxable only in that State. (b) However, such salaries, wages and other similar remu neration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services. The provisions of Articles 14, 15, and 16 shall apply to salaries, wages and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 19 STUDENTS Payments which a student who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the ﬁrstmentioned State solely for the purpose of the student’s education receives for the purpose of the student’s main tenance or education shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 20 OTHER INCOME 1.

Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agree ment may be taxed in that State and if such income is derived from sources within the other Contracting State, that income may also be taxed in that other State. Income derived by a resident of a Contracting State from the other Contracting State under a legal claim to maintenance may not be taxed in the ﬁrstmentioned State if such income would be exempt from tax according to the laws of the other Contracting State. 19

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Article 21 CAPITAL 1.

Capital represented by immovable property referred to in Art icle 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State. Capital represented by movable property forming part of the business property of a permanent establishment which an en terprise of a Contracting State has in the other Contracting State may be taxed in that other State. Capital represented by ships and aircraft operated in inter national trafﬁc, and by movable property pertaining to the op eration of such ships and aircraft, shall be taxable only in the Contracting State of which the enterprise is a resident. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 22 ELIMINATION OF DOUBLE TAXATION 1.

Double taxation shall be eliminated as follows: In Austria: (a) Where a resident of Austria derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in New Zealand, Austria shall, subject to the provisions of subparagraphs b) and c), exempt such income or capital from tax. (b) Where a resident of Austria derives items of income which, in accordance with the provisions of Articles 10, 11, 12 and 20, may be taxed in New Zealand, Austria shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in New Zealand. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from New Zealand. (c) Where in accordance with any provision of the Agree ment income derived or capital owned by a resident of Austria is exempt from tax in Austria, Austria may

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

nevertheless, in calculating the amount of tax on the re maining income or capital of such resident, take into account the exempted income or capital. (d) The provisions of subparagraph a) shall not apply to in come derived or capital owned by a resident of Aus tria where New Zealand applies the provisions of this Agreement to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10, 11, or 12 to such income. In New Zealand: Subject to the provisions of the laws of New Zealand which relate to the allowance of a credit against New Zealand in come tax of tax paid in a country outside New Zealand (which shall not affect the general principle of this Article), Austrian tax paid under the laws of Austria and consistent with this Agreement, in respect of income derived by a resident of New Zealand from sources in Austria (excluding, in the case of a dividend, tax paid in respect of the proﬁts out of which the divi dend is paid) shall be allowed as a credit against New Zealand tax payable in respect of that income.

Article 23 NONDISCRIMINATION 1.

Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be sub jected. The taxation on a permanent establishment which an enter prise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on a permanent establishment which an enter prise of a third State has in that other State. Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indi rectly, by one or more residents of the other Contracting State, shall not be subjected in the ﬁrstmentioned State to any tax 21

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

ation or any requirement connected therewith which is other or more burdensome than the taxation and connected require ments to which other similar enterprises of the ﬁrstmentioned State, the capital of which is wholly or partly owned or con trolled, directly or indirectly, by one or more residents of a third State, are or may be subjected. This Article shall not apply to any provisions of the taxation laws of a Contracting State which: (a) are reasonably designed to prevent or defeat the avoid ance or evasion of taxes; or (b) are in force on the date of signature of this Agreement, or are substantially similar in general purpose or in tent to any such provision but are enacted after the date of signature of this Agreement, provided that any such provision does not allow for different treatment of resi dents of the other Contracting State as compared with the treatment of residents of any third State. The provisions of this Article shall apply only to the taxes which are the subject of this Agreement. If one of the Contracting States considers that taxation meas ures of the other Contracting State infringe the principles set forth in this Article, the competent authorities shall use the mu tual agreement procedure to endeavour to resolve the matter.

Article 24 MUTUAL AGREEMENT PROCEDURE 1.

Where a person considers that the actions of one or both of the Contracting States result or will result for that person in taxa tion not in accordance with the provisions of this Agreement, that person may, irrespective of the remedies provided by the domestic law of those States, present a case to the competent authority of the Contracting State of which the person is a resi dent or, if the person’s case comes under paragraph 1 of Article 23, to that of the Contracting State of which the person is a na tional. The case must be presented within three years from the ﬁrst notiﬁcation of the action resulting in taxation not in ac cordance with the provisions of the Agreement.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

The competent authority shall endeavour, if the objection ap pears to it to be justiﬁed and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in ac cordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domes tic law of the Contracting States. The competent authorities of the Contracting States shall en deavour to resolve by mutual agreement any difﬁculties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimin ation of double taxation in cases not provided for in the Agree ment. The competent authorities of the Contracting States may com municate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.

Article 25 EXCHANGE OF INFORMATION 1.

The competent authorities of the Contracting States shall ex change such information as is forseeably relevant for carry ing out the provisions of this Agreement or to the administra tion or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contract ing States, or of their political subdivisions or local author ities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as informa tion obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in 23

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceed ings or in judicial decisions. In no case shall the provisions of paragraphs 1 and 2 be con strued so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public). If information is requested by a Contracting State in accord ance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested infor mation, even though that other State may not need such in formation for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of para graph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

Article 26 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Agreement shall affect the ﬁscal privileges of mem bers of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

Article 27 ENTRY INTO FORCE 1.

This Agreement shall be ratiﬁed and the instruments of ratiﬁ cation shall be exchanged as soon as possible.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

The Agreement shall enter into force on the ﬁrst day of the third month next following that in which the exchange of in struments of ratiﬁcation takes place and its provisions shall have effect: (a) in Austria: (i) in respect of withholding tax on income, proﬁts or gains derived by a nonresident, for amounts paid or credited on or after the ﬁrst day of the third month next following the date on which the Agreement enters into force; (ii) in respect of other Austrian tax, for any assess ment year beginning on or after 1 January next following the date on which the Agreement en ters into force; (b) in New Zealand: (i) in respect of withholding tax on income, proﬁts or gains derived by a nonresident, for amounts paid or credited on or after the ﬁrst day of the third month next following the date on which the Agreement enters into force; (ii) in respect of other New Zealand tax, for any in come year beginning on or after 1 April next fol lowing the date on which the Agreement enters into force.

Article 28 TERMINATION This Agreement shall remain in force until terminated by a Contract ing State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving notice of termination on or before 30 June in any calendar year beginning after the expiration of 5 years from the date of its entry into force. In such event, the Agree ment shall cease to have effect: (a) in Austria: (i) in respect of withholding tax on income, proﬁts or gains derived by a nonresident, for amounts paid or credited on or after the ﬁrst day of the third month next following that in which the notice of termination is given; 25

Schedule

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

(ii)

(b)

in respect of other Austrian tax, for any assessment year beginning on or after 1 January in the calendar year next following that in which the notice of termination is given; in New Zealand: (i) in respect of withholding tax on income, proﬁts or gains derived by a nonresident, for amounts paid or credited on or after the ﬁrst day of the third month next following that in which the notice of termination is given; (ii) in respect of other New Zealand tax, for any income year beginning on or after 1 April in the calendar year next following that in which the notice of termination is given.

IN WITNESS WHEREOF the Plenipotentiaries of the two Contract ing States, duly authorised thereto, have signed this Agreement. DONE in duplicate at Vienna on 21 September 2006 in the German and English languages, each text being equally authentic. In case of divergence of interpretation the English text shall prevail.

PROTOCOL At the moment of signing the Agreement with respect to Taxes on Income and on Capital, this day concluded between the Republic of Austria and New Zealand, the undersigned have agreed that the following provisions shall form an integral part of the Agreement. 1. With reference to Article 2: It is understood that the taxes covered by the Agreement do not include any amount which represents a penalty or interest imposed under the laws of either Contracting State. Notwith standing the preceding sentence, if the competent authorities of both Contracting States agree to adjust a transfer price pur suant to a mutual agreement procedure under Article 24, in terest and penalties associated with that transaction can form part of the mutual agreement procedure. 2. With reference to Article 5: For the purposes of determining the duration of activities under paragraphs 3 and 4, the period during which activities 26

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

are carried on in a Contracting State by an enterprise asso ciated with another enterprise shall be aggregated with the period during which activities are carried on by the enterprise with which it is associated if the ﬁrstmentioned activities are connected with the activities carried on in that State by the lastmentioned enterprise, provided that any period during which two or more associated enterprises are carrying on concurrent activities is counted only once. An enterprise shall be deemed to be associated with another enterprise if one is controlled directly or indirectly by the other, or if both are controlled directly or indirectly by a third person or persons. With reference to Article 6: The term “immovable property” includes rights to explore for or exploit natural resources or standing timber, and rights to variable or ﬁxed payments either as consideration for, or in respect of, the exploitation of or the right to explore for or exploit natural resources or standing timber. With reference to Article 7: Where: (a) a resident of a Contracting State beneﬁcially owns, whether directly or through one or more interposed trusts, a share of the business proﬁts of an enterprise carried on in the other Contracting State by the trustee of a trust other than a trust which is treated as a com pany for tax purposes; and (b) in relation to that enterprise, that trustee would, in ac cordance with the principles of Article 5, have a per manent establishment in that other State, the enterprise carried on by the trustee shall be deemed to be a business carried on in the other State by that resident through a permanent establishment situated in that other State and that share of business proﬁts shall be attributed to that permanent establishment. With reference to Articles 10, 11 and 12: If, in an agreement for the avoidance of double taxation that is made, after the date of signature of this Agreement, between New Zealand and a third State, being a State that is a member of the Organization for Economic Cooperation and Develop ment, New Zealand agrees to limit the rate of tax: 27

Schedule

(a)

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

on dividends paid by a company which is a resident of New Zealand for the purposes of New Zealand tax to which a company that is a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 10; or (b) on interest arising in New Zealand to which a resident of the third State is entitled, to a rate less than that provided in paragraph (2) of Article 11; or (c) on royalties arising in New Zealand to which a resident of the third State is entitled, to a rate less than that pro vided in paragraph (2) of Article 12, the Government of New Zealand shall immediately inform the Government of Austria in writing through the diplomatic channel and shall enter into negotiations with the Government of Austria to review the relevant provisions in order to pro vide the same treatment for Austria as that provided for the third State. With reference to Article 11: It is understood that, under New Zealand’s Approved Issuer Levy legislation in force at the time of signing this agreement, an approved New Zealand resident borrower is, in relation to a registered security, able to pay interest to a nonresident that is not associated with the borrower and deduct zero percent nonresident withholding tax. Under these rules, approved borrowers are required to pay a duty of 2% for every $1 of interest paid to the nonresident which is not in the nature of an income tax. With reference to paragraph 3 of Article 12: The term “royalties” as used in this Article shall also mean payments of any kind, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for (i) any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or en joyment of, any such property or right as is mentioned in subparagraph (a), any such equipment as is mentioned in subparagraph (b) or any such knowledge or informa tion as is mentioned in subparagraph (c); or

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Schedule

(ii) 8.

total or partial forbearance in respect of the use or sup ply of any property or right referred to in this paragraph. With reference to Article 18: In the case of Austria, Article 18 shall also apply to other cor porations of public law. With reference to paragraph 2 of Article 20: (a) For the purposes of paragraph 2 such remuneration shall also include remuneration for damage resulting from crimes, vaccinations or similar reasons. (b) The income mentioned in this paragraph shall not be taken into consideration when applying the exemption with progression method. With reference to Article 20: It is understood that if at any time after the date of signature of this Protocol, New Zealand agrees to an Other Income Art icle in line with the OECD model, in any of its future double tax agreements, New Zealand shall without undue delay enter into negotiations with the Republic of Austria with a view to providing the same treatment. With reference to Article 25: For the purpose of clariﬁcation it is understood that Article 25 of the Agreement imposes the obligation on the Contract ing State which has received a request for information to col lect the requested information for the purposes of the request ing State in the same manner as such information would have been collected for its own purposes. If the requested State can obtain speciﬁc information only after the formal commence ment of administrative or criminal proceedings concerning tax fraud, the aforementioned principle implies that such informa tion also has to be collected upon the request of the other Con tracting State if a comparable proceeding has been formally opened in the other State. With reference to Article 25: It is understood that if at any time after the date of signature of this Protocol, the Republic of Austria shall include provi sions allowing the exchange of information that is held by a bank, other ﬁnancial institution, nominee, or person acting in an agency or a ﬁduciary capacity or because it relates to owner ship interests in a person in any of its double tax agreements, 29

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

the Republic of Austria shall without undue delay enter into negotiations with New Zealand with a view to including such provisions in the Agreement signed today. 13. Interpretation of the Agreement: It is understood that provisions of the Agreement which are drafted according to the corresponding provisions of the OECDModel Convention on Income and on Capital shall generally be expected to have the same meaning as expressed in the OECD Commentary thereon. The understanding in the preceding sentence will not apply with respect to the following: (a) any reservations or observations to the OECD Model or its Commentary by either Contracting State; (b) any contrary interpretations in this Protocol; (c) any contrary interpretation in a published explanation by one of the Contracting States that has been provided to the competent authority of the other Contracting State prior to the entry into force of the Agreement; (d) any contrary interpretation agreed to by the competent authorities after the entry into force of the Agreement. The OECD Commentary—as it may be revised from time to time—constitutes a means of interpretation in the sense of the Vienna Convention of 23 May 1969 on the Law of Treaties. IN WITNESS WHEREOF the Plenipotentiaries of the two Contract ing States, duly authorised thereto, have signed this Protocol. DONE in duplicate at Vienna, on 21 September 2006, in the German and English languages, each text being equally authentic. In case of divergence of interpretation the English text shall prevail.

Diane Morcom, Clerk of the Executive Council.

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Explanatory note This note is not part of the order, but is intended to indicate its general effect. This order gives effect to the provisions of the agreement to avoid double taxation entered into between New Zealand and the Republic of Austria. This order comes into force on the 28th day after the date of its no tiﬁcation in the Gazette. However, the date on which the agreement comes into force, and the dates from which the agreement has effect, are set out in Article 27 of the agreement. The arrangements speciﬁed in the agreement set out in the Sched ule have been made with the Republic of Austria with a view to— • providing relief from double taxation in relation to— • income tax imposed under the Income Tax Act 2004; and • income tax, corporation tax, land tax, tax on agricultural and forestry enterprises, and tax on the value of vacant plots imposed under the law of the Republic of Austria; and • providing for the exchange of information in relation to all taxes imposed on behalf of New Zealand and the Republic of Austria or their political subdivisions or local authorities.

Issued under the authority of the Acts and Regulations Publication Act 1989. Date of notiﬁcation in Gazette: 22 March 2007.

Notes

Double Taxation Relief (Austria) Order 2007

Reprinted as at 23 March 2007

Contents 1 General 2 Status of reprints 3 How reprints are prepared 4 Changes made under section 17C of the Acts and Regulations Publication Act 1989 5 List of amendments incorporated in this reprint (most recent ﬁrst)

Notes 1

General This is a reprint of the Double Taxation Relief (Austria) Order 2007. The reprint incorporates all the amendments to the Double Taxation Relief (Austria) Order 2007 as at 23 March 2007, as speciﬁed in the list of amendments at the end of these notes. Relevant provisions of any amending enactments that have yet to come into force or that contain relevant transitional or savings provisions are also included, after the principal enact ment, in chronological order.

Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint. This presumption may be rebutted by producing the ofﬁcial volumes of statutes or statutory regulations in which the prin cipal enactment and its amendments are contained.

How reprints are prepared A number of editorial conventions are followed in the prep aration of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked

Reprinted as at 23 March 2007

Double Taxation Relief (Austria) Order 2007

Notes

are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/legislation/reprints.shtml or Part 8 of the Tables of Acts and Ordinances and Statutory Regulations, and Deemed Regulations in Force. 4

Changes made under section 17C of the Acts and Regulations Publication Act 1989

Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all le gislation reprinted after 1 January 2000 is in the new format for legislation and reﬂects current drafting practice at the time of the reprint.

In outline, the editorial changes made in reprints under the au thority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) • typeface and type size (Times Roman, generally in 11.5 point) • layout of provisions, including: • indentation • position of section headings (eg, the number and heading now appear above the section) • format of deﬁnitions (eg, the deﬁned term now appears in bold type, without quotation marks) • format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”)

Notes

Double Taxation Relief (Austria) Order 2007

• position of the date of assent (it now appears on the front page of each Act) • punctuation (eg, colons are not used after deﬁnitions) • Parts numbered with roman numerals are replaced with arabic numerals, and all crossreferences are changed accordingly case and appearance of letters and words, including: • format of headings (eg, headings where each word formerly appeared with an initial cap ital letter followed by small capital letters are amended so that the heading appears in bold, with only the ﬁrst word (and any proper nouns) appearing with an initial capital letter) • small capital letters in section and subsection ref erences are now capital letters

• schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all crossreferences are changed accord ingly running heads (the information that appears at the top of each page)

• format of two column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chrono logical).

List of amendments incorporated in this reprint (most recent ﬁrst)

Wellington, New Zealand: Published under the authority of the New Zealand Government—2008

Reprinted as at 23 March 2007

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.