Published on 01 Feb 08
by "THE TAX SPECIALIST" JOURNAL ARTICLE
The Australian Taxation Office’s decision in ID 2007/2 considered the application of the exemption in the United States Double Taxation Agreement from source State taxation on interest paid to non-resident financial institutions. The decision considers the application of the exemption to a particular hybrid finance structure and denies the exemption based on an integrity measure in the treaty. The decision has important implications for cross-border hybrid finance. This article examines the reasoning behind the decision and questions whether the ATO has adopted an appropriate interpretation of these treaty provisions.
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