Business profits article (Article 7) and foreign limited liability partnerships - TD 2010/D8
02 Dec 2010
On 1 December 2010, the ATO issued draft Taxation Determination TD 2010/D8 entitled "Income tax: does the business profits article (Article 7) of Australia's tax treaties apply to Australian sourced business profits of a foreign limited liability partnership (LLP) where the partners in the LLP are residents of a country with which Australia has entered into a tax treaty and the LLP is treated as fiscally transparent in the country of residence of the partners?"
The answer given to the question asked in the title is "Yes, to the extent the business profits are liable to tax in the hands of the partners in their country of residence and the partners meet any other applicable tax treaty requirements. However, the tax treaty will only be applied where the Commissioner is satisfied that the partners are persons who are residents of that country for the purposes of the tax treaty."