Commonwealth Numbered Acts

INCOME TAX (INTERNATIONAL AGREEMENTS) AMENDMENT ACT 1984 No. 125 of 1984 - SCHEDULE 2

                                   SCHEDULE 2                          Section
8 SCHEDULE TO BE ADDED AT END OF PRINCIPAL ACT
                                   "SCHEDULE 24                        Section
3 AGREEMENT BETWEEN AUSTRALIA AND MALTA FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
Australia and Malta,
Desiring to conclude an Agreement for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income,
Have agreed as follows:
CHAPTER 1
SCOPE OF THE AGREEMENT
ARTICLE 1
Personal Scope
______________
This Agreement shall apply to persons who are residents of one or both of the
Contracting States.
ARTICLE 2
Taxes Covered
_____________ (1) The existing taxes to which this Agreement shall apply are:

   (a)  in Australia: the Australian income tax, including the additional tax
        upon the undistributed amount of the distributable income of a private
        company;

   (b)  in Malta: the income tax, including prepayments of tax whether made by
        deduction at source or otherwise. (2) This Agreement shall also apply
        to any identical or substantially similar taxes which are imposed by
        either Contracting State after the date of signature of this Agreement
        in addition to, or in place of, the existing taxes. As soon as
        possible after the end of each calendar year, the competent authority
        of each Contracting State shall notify the competent authority of the
        other Contracting State of any substantial changes which have been
        made in the laws of his State relating to the taxes to which this
        Agreement applies.
CHAPTER II
DEFINITIONS
ARTICLE 3
General Definitions
___________________ (1) In this Agreement, unless the context otherwise
requires:

   (a)  the term 'Australia' means the Commonwealth of Australia and, when
        used in a geographical sense, includes:

        (i)    the Territory of Norfolk Island;

        (ii)   the Territory of Christmas Island;

        (iii)  the Territory of Cocos (Keeling) Islands;

        (iv)   the Territory of Ashmore and Cartier Islands;

        (v)    the Coral Sea Islands Territory; and

        (vi)   any area adjacent to the territorial limits of Australia or of
               the said Territories in respect of which there is for the time
               being in force, consistently with international law, a law of
               Australia or of a State or part of Australia or of a Territory
               aforesaid dealing with the exploitation of any of the natural
               resources of the sea-bed and subsoil of the continental shelf;

   (b)  the term 'Malta' means the Republic of Malta and, when used in a
        geographical sense, means the Island of Malta, the Island of Gozo and
        the other islands of the Maltese archipelago, including the
        territorial waters thereof, and any area outside the territorial sea
        of Malta which, in accordance with international law, has been or may
        hereafter be designated, under the law of Malta concerning the
        continental shelf, as an area within which the rights of Malta with
        respect to the sea-bed and subsoil and their natural resources may be
        exercised;

   (c)  the terms 'Contracting State', 'one of the Contracting States' and
        'other
Contracting State' mean Australia or Malta, as the context requires;

   (d)  the term 'person' includes an individual, a company and any other body
        of
persons;

   (e)  the term 'company' means any body corporate or any entity which is
        treated
as a
company or body corporate for tax purposes;

   (f)  the terms 'enterprise of one of the Contracting States' and
        'enterprise of
the other
Contracting State' mean an enterprise carried on by a resident of Australia or
an
enterprise carried on by a resident of Malta, as the context requires;

   (g)  the term 'international traffic' means any transport by a ship or
        aircraft
except
where the ship or aircraft is operated solely between places within a
Contracting
State;

   (h)  the term 'tax' means Australian tax or Malta tax, as the context
        requires;

   (i)  the term 'Australian tax' means tax imposed by Australia, being tax to
which this
Agreement applies by virtue of Article 2;

   (j)  the term 'Malta tax' means tax imposed by Malta, being tax to which
        this
Agreement applies by virtue of Article 2;

   (k)  the term 'competent authority' means, in the case of Australia, the
Commissioner
of Taxation or his authorized representative, and in the case of Malta, the
Minister
responsible for finance or his authorized representative. (2) In this
Agreement, the terms 'Australian tax' and 'Malta tax' do not include any
penalty or interest imposed under the law of either Contracting State relating
to the taxes to which this Agreement applies by virtue of Article 2. (3) In
the application of this Agreement by a Contracting State, any term not defined
in this Agreement shall, unless the context otherwise requires, have the
meaning which it has under the laws of that State relating to the taxes to
which this Agreement applies.
ARTICLE 4
Residence
_________ (1) For the purposes of this Agreement, a person is a resident of
one of the Contracting States:

   (a)  in the case of Australia, subject to the provisions of paragraph (2),
        if
the person is a
resident of Australia for the purposes of Australian tax; and

   (b)  in the case of Malta, if the person is liable to tax therein by reason
        of
his domicile,
residence, place of management or any other criterion of a similar nature. A
person
is not a resident of Malta if he is liable to tax in Malta in respect only of
income
from sources therein. (2) In relation to income from sources in Malta, a
person who is subject to Australian tax on income which is from sources in
Australia shall not be treated as a resident of Australia unless the income
from sources in Malta is subject to Australian tax or, if that income is
exempt from Australian tax, it is so exempt solely because it is subject to
Malta tax. (3) Where by reason of the preceding provisions of this Article an
individual is a resident of both Contracting States, then his status shall be
determined in accordance with the following rules:

   (a)  he shall be deemed to be a resident solely of the Contracting State in
which he has a
permanent home available to him;

   (b)  if he has a permanent home available to him in both Contracting
        States, or
if he
does not have a permanent home available to him in either of them, he shall be
deemed to be a resident solely of the Contracting State with which his
personal and
economic relations are the closer. (4) In determining for the purposes of
paragraph (3) the Contracting State with which an individual's personal and
economic relations are the closer, the matters to which regard may be had
shall include the citizenship of the individual. (5) 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 solely of
the Contracting State in which its place of effective management is situated.
ARTICLE 5
Permanent Establishment
_______________________ (1) For the purposes of this Agreement, the term
'permanent establishment', in relation to an enterprise, means a fixed place
of business through which the business of the enterprise is wholly or partly
carried on. (2) The term 'permanent establishment' shall include especially:

   (a)  a place of management;

   (b)  a branch;

   (c)  an office;

   (d)  a factory;

   (e)  a workshop;

   (f)  a mine, an oil or gas well, a quarry or any other place of extraction
        of
natural
resources;

   (g)  an agricultural, pastoral or forestry property;

   (h)  a building site or construction, installation or assembly project
        which
exists for
more than 183 days in any twelve-month period. (3) An enterprise shall not be
deemed to have a permanent establishment merely by reason of:

   (a)  the use of facilities solely for the purpose of storage, display or
delivery of goods or
merchandise belonging to the enterprise;

   (b)  the maintenance of a stock of goods or merchandise belonging to the
enterprise
solely for the purpose of storage, display or delivery;

   (c)  the maintenance of a stock of goods or merchandise belonging to the
enterprise
solely for the purpose of processing by another enterprise;

   (d)  the maintenance of a fixed place of business solely for the purpose of
purchasing
goods or merchandise, or for collecting information, for the enterprise;

   (e)  the maintenance of a fixed place of business solely for the purpose of
activities
which have a preparatory or auxiliary character for the enterprise, such as
advertising or scientific research. (4) An enterprise shall be deemed to have
a permanent establishment in one of the Contracting States and to carry on
business through that permanent establishment if:

   (a)  it carries on supervisory activities in that State for more than 183
        days
in any
twelve-month period in connection with a building site, or a construction,
installation or assembly project which is being undertaken in that State;

   (b)  there is being used in that State by, for or under contract with the
enterprise
substantial equipment including, but not limited to, an installation, drilling
rig or
ship used for, or in activities connected with, the exploration for or
exploitation of
natural resources; or

   (c)  it carries on supervisory activities in that State in connection with
        the
use of
equipment referred to in sub-paragraph (b). (5) A person acting in one of the
Contracting States on behalf of an enterprise of the other Contracting State -
other than an agent of an independent status to whom paragraph (6) applies -
shall be deemed to be a permanent establishment of that enterprise in the
first-mentioned State:

   (a)  in respect of his activities in that behalf, if he has, and habitually
exercises in that
State, an authority to conclude contracts on behalf of the enterprise, unless
his
activities are limited to those mentioned in paragraph (3) and are such that,
if
exercised through a fixed place of business, would not make that fixed place
of
business a permanent establishment under the provisions of that paragraph; or

   (b)  if, in so acting, he manufactures or processes in that State for the
enterprise goods
or merchandise belonging to the enterprise. (6) An enterprise of one of the
Contracting States shall not be deemed to have a permanent establishment in
the other Contracting State merely because it carries on business in that
other State through a broker, general commission agent or any other agent of
an independent status, where that person is acting in the ordinary course of
his business as such a broker or agent. (7) The fact that a company which is a
resident of one of the Contracting States 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 or
otherwise), shall not of itself make either company a permanent establishment
of the other. (8) The principles set forth in the preceding paragraphs of this
Article shall be applied in determining for the purposes of this Agreement
whether there is a permanent establishment outside both Contracting States,
and whether an enterprise, not being an enterprise of one of the Contracting
States, has a permanent establishment in one of the Contracting States.
CHAPTER III
TAXATION OF INCOME
ARTICLE 6
Income from Real Property
_________________________ (1) Income from real property may be taxed in the
Contracting State in which the real property is situated. (2) In this Article,
the term 'real property':

   (a)  in the case of Australia, has the meaning which it has under the laws
        of Australia, and shall also include:

        (i)    a lease of land and any other interest in or over land, whether
               improved
or
not; and

        (ii)   a right to receive variable or fixed payments as consideration
               for the
working of, or the right to work or to explore for, mineral deposits, oil or
gas
wells, quarries or other places of extraction or exploitation of natural
resources; and

   (b)  in the case of Malta, means immovable property according to the laws
        of Malta, and shall also include:

        (i)    property accessory to immovable property;

        (ii)   rights to which the provisions of the general law respecting
               landed
property
apply;

        (iii)  usufruct of immovable property; and

        (iv)   rights to variable or fixed payments in respect of the
               operation of
mines or
quarries or of the exploitation of or exploration for any natural resources.
Ships, boats and aircraft shall not be regarded as real property. (3) A lease
of land, any other interest in or over land and any right referred to in any
of the sub-paragraphs of paragraph (2) shall be regarded as situated where the
land, mineral deposits, oil or gas wells, quarries or natural resources, as
the case may be, are situated or the exploration may take place. (4) The
provisions of paragraph (1) shall apply to income derived from the direct use,
letting or use in any other form of real property. (5) The provisions of
paragraphs (1), (3) and (4) shall also apply to the income from real property
of an enterprise and to income from real property used for the performance of
professional services.
ARTICLE 7
Business Profits
________________ (1) The profits of an enterprise of one of the Contracting
States shall be taxable only in that State unless the enterprise carries on
business in the other Contracting State through a permanent establishment
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 permanent establishment. (2) Subject to the
provisions of paragraph (3), where an enterprise of one of the Contracting
States carries on business in the other Contracting 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 or with other enterprises with which it deals. (3) In the
determination of the profits of a permanent establishment, there shall be
allowed as deductions expenses of the enterprise, being expenses which are
incurred for the purposes of the permanent establishment (including executive
and general administrative expenses so incurred) and which would be deductible
if the permanent establishment were an independent entity which paid those
expenses, whether incurred in the Contracting State in which the permanent
establishment is situated or elsewhere. (4) 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. (5) Nothing in this
Article shall affect the application of any law of a Contracting State
relating to the determination of the tax liability of a person, including the
determination of such liability by the exercise of a discretion or the making
of an estimate by the competent authority of that State in cases in which,
from the information available to the competent authority of that State, it is
not possible or not practicable to ascertain the profits to be attributed to a
permanent establishment, provided that that law shall be applied, so far as
the information available to the competent authority permits, consistently
with the principles of this Article. (6) For the purposes of the preceding
paragraphs of this Article, 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. (7) Where profits include items
of income which are dealt with separately in other Articles of this Agreement,
then the provisions of those Articles shall not be affected by the provisions
of this Article. (8) Nothing in this Article shall affect the operation of any
law of a Contracting State relating to taxation of profits from insurance with
non-residents provided that if the relevant law in force in either Contracting
State at the date of signature of this Agreement is varied (otherwise than in
minor respects so as not to affect its general character) the Contracting
States shall consult with each other with a view to agreeing to any amendment
of this paragraph that may be appropriate.
ARTICLE 8
Shipping and Air Transport
__________________________ (1) Profits from the operation of ships or aircraft
derived by a resident of one of the Contracting States shall be taxable only
in that State. (2) Notwithstanding the provisions of paragraph (1), such
profits may be taxed in the other Contracting State where they are profits
from operations of ships or aircraft confined solely to places in that other
State. (3) The provisions of paragraphs (1) and (2) shall apply in relation to
the share of the profits from the operation of ships or aircraft derived by a
resident of one of the Contracting States through participation in a pool
service, in a joint transport operating organization or in an international
operating agency. (4) For the purposes of this Article, profits derived from
the carriage by ships or aircraft of passengers, livestock, mail, goods or
merchandise shipped in a Contracting State for discharge at another place in
that State shall be treated as profits from operations of ships or aircraft
confined solely to places in that State. (5) Notwithstanding the provisions of
this Article, profits from the operation of ships in international traffic
derived by a company which is a resident of Malta may be taxed in Australia
unless the company proves that such profits are not relieved from Malta tax
under the provisions of the Merchant Shipping Act, 1973, or under any
identical or similar provision. The foregoing sentence, however, shall not
apply if the company proves that not more than 25 per cent of its capital is
owned, directly or indirectly, by persons who are not residents of Malta.
ARTICLE 9
Associated Enterprises
______________________ (1) Where:

   (a)  an enterprise of one of the Contracting States 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 one of the Contracting States and an enterprise of
the
other Contracting State, and in either case conditions operate between the two
enterprises in their commercial or financial relations which differ from those
which might be expected to operate between independent enterprises dealing
wholly independently with one another, then any profits which, but for those
conditions, might have been expected to accrue to one of the enterprises, but,
by reason of those conditions, have not so accrued, may be included in the
profits of that enterprise and taxed accordingly. (2) Nothing in this Article
shall affect the application of any law of a Contracting State relating to the
determination of the tax liability of a person, including the determination of
such liability by the exercise of a discretion or the making of an estimate by
the competent authority of that State in cases in which, from the information
available to the competent authority of that State, it is not possible or not
practicable to determine the income to be attributed to an enterprise,
provided that that law shall be applied, so far as the information available
to the competent authority permits, consistently with the principles of this
Article. (3) Where profits on which an enterprise of one of the Contracting
States has been charged to tax in that State are also included, by virtue of
paragraph (1) or (2), in the profits of an enterprise of the other Contracting
State and taxed accordingly, and the profits so included are profits which
might have been expected to have accrued to that enterprise of the other State
if the conditions operative between the enterprises had been those which might
have been expected to have operated between independent enterprises dealing
wholly independently with one another, then the first-mentioned State shall
make an appropriate adjustment to the amount of tax charged on those profits
in the first-mentioned State. In determining such an adjustment, due regard
shall be had to the other provisions of this Agreement in relation to the
nature of the income and for this purpose the competent 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 one of the
Contracting States for the purposes of its tax, being dividends to which a
resident of the other Contracting State is beneficially entitled, may be taxed
in that other State. (2) Such dividends may be taxed in the Contracting State
of which the company paying the dividends is a resident for the purposes of
its tax, and according to the law of that State, but:

   (a)  in the case of tax charged by Australia:
that tax shall not exceed 15 per cent of the gross amount of the dividends;

   (b)  in the case of tax charged by Malta:

        (i)    such tax on the gross amount of the dividends shall not exceed
               that
chargeable on the profits out of which the dividends are paid;

        (ii)   where such dividends are paid out of profits of a company which
               are
subject
to tax at a reduced rate of tax under special provisions designed to promote
investments necessary for the economic development of Malta, the rate of
Malta tax on the dividends shall not exceed such reduced rate. The provisions
of this paragraph shall not affect the taxation of the company on the profits
out of which the dividends are paid. (3) The term 'dividends' in this Article
means income from shares and other income assimilated to income from shares by
the taxation law of the Contracting State of which the company making the
distribution is a resident for the purposes of its tax. (4) The provisions of
paragraph (2) shall not apply if the person beneficially entitled to the
dividends, being a resident of one of the Contracting States, carries on
business in the other Contracting State of which the company paying the
dividends is a resident, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the dividends are
paid is effectively connected with such permanent establishment or fixed base.
In any such case the provisions of Article 7 or Article 14, as the case may
be, shall apply. (5) Dividends paid by a company which is a resident of one of
the Contracting States, being dividends to which a person who is not a
resident of the other Contracting State is beneficially entitled, shall be
exempt from tax in that other State except insofar as the holding in respect
of which the dividends are paid is effectively connected with a permanent
establishment or fixed base situated in that other State. Provided that this
paragraph shall not apply in relation to dividends paid by any company which
is a resident of Australia for the purposes of Australian tax and which is
also a resident of Malta for the purposes of Malta tax.
ARTICLE 11
Interest
________ (1) Interest arising in one of the Contracting States, being interest
to which a resident of the other Contracting State is beneficially entitled,
may be taxed in that other State. (2) Such interest may be taxed in the
Contracting State in which it arises, and according to the law of that State,
but the tax so charged shall not exceed 15 per cent of the gross amount of the
interest. (3) The term 'interest' in this Article includes interest from
Government securities or from bonds or debentures, whether or not secured by
mortgage and whether or not carrying a right to participate in profits, and
interest from any other form of indebtedness as well as all other income
assimilated to income from money lent by the taxation law of the Contracting
State in which the income arises. (4) The provisions of paragraph (2) shall
not apply if the person beneficially entitled to the interest, being a
resident of one of the Contracting States, carries on business in the other
Contracting State, in which the interest arises, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the indebtedness in
respect of which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such a case, the provisions of
Article 7 or Article 14, as the case may be, shall apply. (5) Interest shall
be deemed to arise in a Contracting State when the payer is that State itself
or a political subdivision or local authority of that State or a person who is
a resident of that State for the purposes of its tax. Where, however, the
person paying the interest, whether he is a resident of one of the Contracting
States or not, has in one of the Contracting States or outside both
Contracting States a permanent establishment or fixed base in connection with
which the indebtedness on which the interest is paid was incurred, and such
interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated. (6) Where, owing to a special
relationship between the payer and the person beneficially entitled to the
interest, or between both of them and some other person, the amount of the
interest paid, having regard to the indebtedness for which it is paid, exceeds
the amount which might have been expected to have been agreed upon by the
payer and the person so entitled in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned amount. In
that case, the excess part of the amount of the interest paid shall remain
taxable according to the law of each Contracting State, but subject to the
other provisions of this Agreement.
ARTICLE 12
Royalties
_________ (1) Royalties arising in one of the Contracting States, being
royalties to which a resident of the other Contracting State is beneficially
entitled, may be taxed in that other State. (2) Such royalties may be taxed in
the Contracting State in which they arise, and according to the law of that
State, but the tax so charged shall not exceed 10 per cent of the gross amount
of the royalties. (3) The term 'royalties' in this Article means payments or
credits, whether periodical or not, and however described or computed, to the
extent to which they are made as consideration for:

   (a)  the use of, or the right to use, any copyright, patent, design or
        model,
plan, secret
formula or process, trademark or other like property or right;

   (b)  the use of, or the right to use, any industrial, commercial or
        scientific
equipment;

   (c)  the supply of scientific, technical, industrial or commercial
        knowledge or
information;

   (d)  the supply of any assistance that is ancillary and subsidiary to, and
        is
furnished as a
means of enabling the application or enjoyment of, any such property or right
as is
mentioned in sub-paragraph (a), any such equipment as is mentioned in
sub-paragraph (b) or any such knowledge or information as is mentioned in
sub-paragraph (c);

   (e)  the use of, or the right to use:

        (i)    motion picture films;

        (ii)   films or video tapes for use in connection with television; or

        (iii)  tapes for use in connection with radio broadcasting; or

   (f)  total or partial forbearance in respect of the use or supply of any
property or right
referred to in this paragraph. (4) The provisions of paragraph (2) shall not
apply if the person beneficially entitled to the royalties, being a resident
of one of the Contracting States, carries on business in the other Contracting
State, in which the royalties arise, through a permanent establishment
situated therein, or performs in that other State independent personal
services from a fixed base situated therein, and the property or right in
respect of which the royalties are paid or credited is effectively connected
with such permanent establishment or fixed base. In such a case, the
provisions of Article 7 or Article 14, as the case may be, shall apply. (5)
Royalties shall be deemed to arise in a Contracting State when the payer is
that State itself or a political subdivision or local authority of that State
or a person who is a resident of that State for the purposes of its tax.
Where, however, the person paying the royalties, whether he is a resident of
one of the Contracting States or not, has in one of the Contracting States or
outside both Contracting States a permanent establishment or fixed base in
connection with which the liability to pay the royalties was incurred, and the
royalties are borne by the permanent establishment or fixed base, then the
royalties shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated. (6) Where, owing to a special
relationship between the payer and the person beneficially entitled to the
royalties, or between both of them and some other person, the amount of the
royalties paid or credited, having regard to what they are paid or credited
for, exceeds the amount which might have been expected to have been agreed
upon by the payer and the person so entitled in the absence of such
relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the amount of the
royalties paid or credited shall remain taxable according to the law of each
Contracting State, but subject to the other provisions of this Agreement.
ARTICLE 13
Alienation of Property
_____________________ (1) Income or gains from the alienation of real property
may be taxed in the Contracting State in which the real property is situated.
(2) Income or gains from the alienation of shares or comparable interests in a
company, the assets of which consist wholly or principally of real property,
may be taxed in the Contracting State in which the assets or the principal
assets of the company are situated. (3) For the purposes of this Article:

   (a)  the term 'real property' has the same meaning that it has in Article
        6;
and

   (b)  any lease, interest or right referred to in any sub-paragraph of
        paragraph

(2) of
that Article shall be regarded as situated where the land, mineral deposits,
oil or gas
wells, quarries or natural resources, as the case may be, are situated or the
exploration may take place.
ARTICLE 14
Independent Personal Services
____________________________ (1) Income derived by an individual who is a
resident of one of the Contracting States in respect of professional services
or other independent activities of a similar character shall be taxable only
in that State. However, if such an individual:

   (a)  has a fixed base regularly available to him in the other Contracting
        State
for the
purpose of performing his activities; or

   (b)  in a year of income or in the year immediately preceding a year of
assessment, as
the case may be, stays in the other Contracting State for a period or periods
aggregating more than 183 days for the purpose of performing his activities;
or

   (c)  derives, in a year of income or in the year immediately preceding a
        year
of
assessment, as the case may be, from residents of the other Contracting State
gross
remuneration exceeding twelve thousand five hundred Australian dollars or its
equivalent in Malta pounds from performing his activities in that State, so
much of the income derived by him as is attributable to activities so
performed may be taxed in the other State. (2) The Treasurer of Australia and
the Minister responsible for finance in Malta may agree in letters exchanged
for the purpose to variations in the amount specified in sub-paragraph (c) of
paragraph (1) and any variations so agreed shall have effect according to the
tenor of the letters. (3) The term 'professional services' includes services
performed in the exercise of independent scientific, literary, artistic,
educational or teaching activities, as well as in the exercise of independent
activities of physicians, lawyers, engineers, architects, dentists and
accountants.
ARTICLE 15
Dependent Personal Services
___________________________ (1) Subject to the provisions of Articles 16, 18
and 19, salaries, wages and other similar remuneration derived by an
individual who is a resident of one of the Contracting States 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 from that exercise may be taxed in that other
State. (2) Notwithstanding the provisions of paragraph (1), remuneration
derived by an individual who is a resident of one of the Contracting States in
respect of an employment exercised in the other Contracting State shall be
taxable only in the first-mentioned State if:

   (a)  the recipient is present in that other State for a period or periods
        not
exceeding in
the aggregate 183 days in the year of income or in the year immediately
preceding
the year of assessment, as the case may be, of that other State; and

   (b)  the remuneration is paid by, or on behalf of, an employer who is not a
resident of
that other State; and

   (c)  the remuneration is not deductible in determining taxable profits of a
permanent
establishment or a fixed base which the employer has in that other State; and

   (d)  the remuneration is, or upon the application of this Article will be,
subject to tax in
the first-mentioned State. (3) Notwithstanding the preceding provisions of
this Article, remuneration in respect of an employment exercised aboard a ship
or aircraft operated in international traffic by a resident of one of the
Contracting States may be taxed in that State.
ARTICLE 16
Directors' Fees
_______________ Directors' fees and similar payments derived by a resident of
one of the Contracting States in his capacity as a member of the board of
directors, or other comparable body however described, of a company which is a
resident of the other Contracting State may be taxed in that other State.
ARTICLE 17
Entertainers
____________ (1) Notwithstanding the provisions of Articles 14 and 15, income
derived by entertainers (such as theatrical, motion picture, radio or
television artistes and musicians and athletes) from their personal activities
as such may be taxed in the Contracting State in which these activities are
exercised. (2) Where income in respect of the personal activities of an
entertainer as such accrues not to that entertainer but to another person,
that income may, notwithstanding the provisions of Articles 7, 14 and 15, be
taxed in the Contracting State in which the activities of the entertainer are
exercised.
ARTICLE 18
Pensions and Annuities
______________________ (1) Pensions (including government pensions) and
annuities paid to a resident of one of the Contracting States shall be taxable
only in that State. (2) The term 'annuity' means a stated sum payable
periodically at stated times during life or during a specified or
ascertainable period of time under an obligation to make the payments in
return for adequate and full consideration in money or money's worth. (3)
Notwithstanding anything in this Agreement, any pension or allowance that is
paid by one of the Contracting States in respect of wounds, disabilities or
death caused by war, or in respect of war service, and is exempt from tax
under the law of that State, to a resident of the other Contracting State
shall be exempt from tax in that other State.
ARTICLE 19
Government Service
__________________ (1) Remuneration, other than a pension or annuity, paid by
one of the Contracting States or a political sub-division or local authority
of that State to any individual in respect of services rendered in the
discharge of governmental functions shall be taxable only in that State.
However, such remuneration shall be taxable only in the other Contracting
State if the services are rendered in that other State and the recipient is a
resident of that other State who:

   (a)  is a citizen of that State; or

   (b)  did not become a resident of that State solely for the purpose of
performing the
services. (2) The provisions of paragraph (1) shall not apply to remuneration
in respect of services rendered in connection with any trade or business
carried on by one of the Contracting States or a political sub-division or
local authority of that State. In such a case, the provisions of Article 15 or
Article 16, as the case may be, shall apply. (3) Where remuneration is paid
under a development assistance programme of a Contracting State, out of funds
exclusively supplied by that State, to a specialist or volunteer seconded to
the other Contracting State with the consent of that other State, such
remuneration shall be deemed to have been paid by the first-mentioned State
and shall be taxable only in that State.
ARTICLE 20
Students
________ Where a student, who is a resident of one of the Contracting States
or who was a resident of that State immediately before visiting the other
Contracting State and who is temporarily present in that other State solely
for the purpose of his education at a university, college, school or other
similar educational institution, receives payments from sources outside that
other State for the purpose of his maintenance or education, those payments
shall be exempt from tax in that other State.
ARTICLE 21
Income Not Expressly Mentioned
______________________________ (1) Items of income of a resident of one of the
Contracting States which are not expressly mentioned in the foregoing Articles
of this Agreement shall be taxable only in that State. (2) However, any such
income derived by a resident of one of the Contracting States, from sources in
the other Contracting State, may also be taxed in that other State. (3) The
provisions of paragraph (1) shall not apply to income derived by a resident of
one of the Contracting States where that income is effectively connected with
a permanent establishment or fixed base situated in the other Contracting
State. In such a case, the provisions of Article 7 or Article 14, as the case
may be, shall apply.
ARTICLE 22
Sources of Income
_________________ Income derived by a resident of one of the Contracting
States which, under any one or more of Articles 6 to 8, Articles 10 to 19 and
Article 21, may be taxed in the other Contracting State shall, for the
purposes of Article 23 and of the income tax law of that other State, be
deemed to be income from sources in that other State.
CHAPTER IV
METHODS OF ELIMINATION OF DOUBLE TAXATION
ARTICLE 23 (1) Subject to the provisions of the law of Australia from time to
time in force which relate to the allowance of a credit against Australian tax
of tax paid in a country outside Australia (which shall not affect the general
principle hereof), Malta tax paid under the law of Malta and in accordance
with this Agreement, whether directly or by deduction in respect of income
derived by a person who is a resident of Australia from sources in Malta (not
including, in the case of a dividend, tax paid in respect of the profits out
of which the dividend is paid) shall be allowed as a credit against Australian
tax payable in respect of that income. (2) A company which is a resident of
Australia is, in accordance with the provisions of the taxation law of
Australia in force at the date of signature of this Agreement, entitled to a
rebate in its assessment at the average rate of tax payable by the company in
respect of dividends that are included in its taxable income and are received
from a company which is a resident of Malta. However, should the law so in
force be amended so that the rebate in relation to the dividends ceases to be
allowable under that law, Australia shall immediately advise Malta of the
change and enter into negotiations with Malta in order to establish new
provisions concerning the credit to be allowed by Australia against its tax on
the dividends. (3) For the purposes of paragraph (1) and of the income tax law
of Australia:

   (a)  a resident of Australia deriving income from sources in Malta
        consisting of dividends to which sub-paragraph (2) (b) (ii) of Article
        10 applies, interest to which Article 11 applies or royalties to which
        Article 12 applies, being income in respect of which Malta tax has
        been wholly relieved or reduced for a limited period of time under the
        provisions of the Aids to Industries Ordinance 1959, so far as they
        were in force on, and have not been modified since, the date of
        signature of this Agreement, or have been modified only in minor
        respects so as not to affect their general character, or under any
        other provisions which may subsequently be agreed by the Contracting
        States in letters exchanged for the purpose through the diplomatic
        channel to be of a substantially similar character, shall be deemed to
        have paid Malta tax in an amount, or the Malta tax paid shall be
        deemed to have been increased by an amount, equal to the amount by
        which the Malta tax that otherwise would have been payable (which tax,
        in the case of dividends, shall not exceed 15 per cent and, in the
        case of royalties or interest, 10 per cent of the gross amount
        thereof) is reduced by the exemption or reduction granted; and

   (b)  the amount of the said dividends, interest or royalties shall be
        deemed to be the amount that would have been the amount of the
        dividends, interest or royalties if no Malta tax had been paid,
        increased by the amount by which the tax that otherwise would have
        been payable is reduced by the said exemption or reduction. (4)
        Paragraph (3) shall not apply in relation to income derived in any
        year of income after the year of income that ends on 30 June 1989 or
        on any later date that may be agreed by the Contracting States in
        letters exchanged for this purpose. (5) (a) Subject to the provisions
        of the law of Malta from time to time in force which relate to the
        allowance of a credit against Malta tax of tax paid in a country
        outside Malta (which shall not affect the general principle hereof),
        Australian tax paid under the law of Australia and in accordance with
        this Agreement, whether directly or by deduction, in respect of income
        derived by a person who is a resident of Malta from sources in
        Australia (not including, in the case of a dividend, tax paid in
        respect of the profits out of which the dividend is paid) shall be
        allowed as a credit against Malta tax payable in respect of that
        income.

   (b)  Where a company which is a resident of Australia pays a dividend to a
        company which is a resident of Malta and which controls directly or
        indirectly at least 10 per cent of the voting power in the
        first-mentioned company, the credit shall take into account (in
        addition to any Australian tax for which credit may be allowed under
        sub-paragraph (a)) the Australian tax payable by that first-mentioned
        company in respect of the profits out of which such dividend is paid.
        (6) Where under this Agreement income is to be relieved from tax in
        one of the Contracting States and, under the law in force in the other
        Contracting State, a person, in respect of the said income, is subject
        to tax by reference to the amount thereof which is remitted to or
        received in that other State and not by reference to the full amount
        thereof, then the relief to be allowed under this Agreement in the
        first-mentioned State shall apply only to so much of the income as is
        remitted to or received in the other State.
CHAPTER V
SPECIAL PROVISIONS
ARTICLE 24
Mutual Agreement Procedure
__________________________ (1) Where a resident of one of the Contracting
States considers that the actions of the competent authority of one or both of
the Contracting States result or will result for him in taxation not in
accordance with this Agreement, he may, notwithstanding the remedies provided
by the national laws of those States, present his case to the competent
authority of the Contracting State of which he is a resident. The case must be
presented within three years from the first notification of the action giving
rise to taxation not in accordance with this Agreement. (2) The competent
authority shall endeavour, if the claim appears to it to be justified and if
it is not itself able to arrive at an appropriate solution, to resolve the
case with the competent authority of the other Contracting State, with a view
to the avoidance of taxation not in accordance with this Agreement. Any
solution so reached shall be implemented notwithstanding any time limits in
the national laws of the Contracting States. (3) The competent authorities of
the Contracting States shall jointly endeavour to resolve any difficulties or
doubts arising as to the interpretation or application of this Agreement. (4)
The competent authorities of the Contracting States may communicate with each
other directly for the purpose of giving effect to the provisions of this
Agreement.
ARTICLE 25
Exchange of Information
_______________________ (1) The competent authorities of the Contracting
States shall exchange such information as is necessary for the carrying out of
this Agreement or of the domestic laws of the Contracting States concerning
the taxes to which this Agreement applies insofar as the taxation thereunder
is not contrary to this Agreement. The exchange of information is not
restricted by Article 1. Any information received by the competent authority
of a Contracting State shall be treated as secret in the same manner as
information 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, enforcement or
prosecution in respect of, or the determination of appeals in relation to, the
taxes to which this Agreement applies and shall be used only for such
purposes. (2) In no case shall the provisions of paragraph (1) be construed so
as to impose on a Contracting State the obligation:

   (a)  to carry out administrative measures at variance with the laws or the
administrative
practice of that or of the other Contracting State:

   (b)  to supply particulars which are 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 to supply information
the
disclosure of which would be contrary to public policy.
ARTICLE 26
Diplomatic and Consular Officials
_________________________________ (1) Nothing in this Agreement shall affect
the fiscal privileges of diplomatic or consular officials under the general
rules of international law or under the provisions of special international
agreements. (2) Notwithstanding Article 4, an individual who is a member of a
diplomatic mission, consular post or permanent mission of one of the
Contracting States which is situated in the other Contracting State or in a
third State shall be deemed for the purposes of this Agreement to be a
resident of the sending State if he is liable in the sending State to the same
obligations in relation to tax on his total income as are residents of that
sending State. (3) This Agreement shall not apply to International
Organizations, to organs or officials thereof or to persons who are members of
a diplomatic mission, consular post or permanent mission of a third State,
being present in a Contracting State and who are not liable in either
Contracting State to the same obligations in relation to tax on their total
income as are residents thereof.
CHAPTER VI
FINAL PROVISIONS
ARTICLE 27
Entry into Force
________________
This Agreement shall enter into force on the date on which the Contracting
States exchange notes through the diplomatic channel notifying each other that
the last of such things has been done as is necessary to give this Agreement
the force of law in Australia and in Malta, as the case may be, and thereupon
this Agreement shall have effect:

   (a)  in Australia:

        (i)    in respect of withholding tax on income that is derived by a
non-resident, in
relation to income derived on or after 1 January in the calendar year next
following that in which the Agreement enters into force;

        (ii)   in respect of other Australian tax, in relation to income of
               any year
of
income beginning on or after 1 July in the calendar year next following that
in which the Agreement enters into force;

   (b)  in Malta: in relation to taxes which are levied for the year of
        assessment beginning on 1 January in the second calendar year
        following that in which the Agreement enters into force and for any
        subsequent year of assessment.
ARTICLE 28
Termination
___________
This Agreement shall continue in effect indefinitely, but either of the
Contracting States may, on or before 30 June in any calendar year beginning
after the expiration of 5 years from the date of its entry into force, give to
the other Contracting State through the diplomatic channel written notice of
termination and, in that event, this Agreement shall cease to be effective:

   (a)  in Australia:

        (i)    in respect of withholding tax on income that is derived by a
non-resident, in
relation to income derived on or after 1 January in the calendar year next
following that in which the notice of termination is given;

        (ii)   in respect of other Australian tax, in relation to income of
               any
year of
income beginning on or after 1 July in the calendar year next following that
in which the notice of termination is given;

   (b)  in Malta: in relation to taxes which are levied for the year of
        assessment beginning on 1 January in the second calendar year
        following that in which the notice of termination is given and for
        subsequent years of assessment.
IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this
Agreement.
DONE in duplicate at Malta this ninth day of May One thousand nine hundred and
eighty-four in the English language.
          N. ROSS-SMITH                           ALEX SCEBERRAS TRIGONA

          FOR AUSTRALIA                           FOR MALTA".

______________________________________________________________________________
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