Australia's Treaties Committee Changes Its Tune Over US Double Tax Treaty

by Mary Swire, Tax-News.com, London

28 June 2002

The Australian Federal Treaties Committee has executed a near perfect U-turn over a bilateral treaty with the United States, recommending at the beginning of this week that the ATO shouldn't ratify the treaty, and on Wednesday that it should.

Speaking on Monday, the Committee Chairwoman, Liberal MP Julie Bishop warned that ratifying the treaty - which will allow public companies to repatriate profits made by their US subsidiaries at no extra charge - could cost the Australian Treasury up to $190 million per year in lost revenue.

'The committee has recommended further that the Australian Taxation Office consult with the Australian Treasury and other interested parties to develop an effective methodology to quantify the economic benefits of double tax agreements,' she explained earlier this week.

However, on Wednesday, Ms Bishop announced that the committee had received additional information from the ATO and the Treasury demonstrating that ratification of the treaty would be in the best interests of the Commonwealth. However, the committee chief declined to reveal the nature of the additional information in question.

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