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Qualifying for treaty benefits: the US–Australia DTA


In February 2016, the US Department of the Treasury issued a revised limitation on benefits (LOB) article in the United States Model Income Tax Convention (2016 Model), which was intended to prevent “treaty shopping” by third country residents that are not intended beneficiaries of the treaty. The revised LOB article differs substantially from the current LOB article in the Protocol amending the Australia–US Income Tax Convention 2001 (2001 Protocol) and the OECD’s draft LOB article that appears in the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (OECD Model). The US has a strong treaty practice in relation to the LOB article and it is reasonable to expect that in future treaty negotiations with Australia, the US will seek to introduce a comprehensive LOB article that reflects the 2016 Model. This article examines the different LOB articles and analyses the key differences between the LOB article in the 2016 Model with the 2001 Protocol and the OECD Model.

Author profile

Ellen Thomas ATI
Ellen is a tax lawyer based in Sydney. She focuses on the tax aspects of M&A and finance transactions, as well as tax audits and dispute resolution. She advises on a range of domestic and international M&A transactions, corporate restructures, post-acquisition integrations, international tax planning, distressed debt transactions, infrastructure investments and financial arrangements. Ellen also has extensive experience in dealing with the Australian Taxation Office, including in relation to ruling applications, audits and dispute resolution. - Current at 14 March 2018
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