Costello Highlights Benefits Of New Tax Treaties With UK And Russia

by Mary Swire, Tax-News.com, Hong Kong

19 January 2004

Australian Treasurer, Peter Costello has reminded taxpayers and investors of new Double Taxation Treaties with the United Kingdom and Russia, both of which entered into force in December last year with the intention of boosting trade and investment.

The new double taxation treaty with the United Kingdom, signed in Canberra in August last year, updates an existing treaty that has remained unchanged since 1980 and according to Costello, underlines the “critical importance” of bilateral trade between the two nations, with the UK representing an entry point to the EU market.

Meanwhile, Costello explained that the tax treaty with Russia will function in a very similar manner to other modern double taxation prevention agreements, by allocating taxation rights on all forms of income flows between the two nations.

The Australia-Russia treaty will first have effect in Australia for all domestic taxes covered by the treaty from July 1st this year. In the case of Russia, the treaty will have effect for taxable years and periods beginning on or after 1 January 2004.

The Treasurer also noted that the treaties will strengthen anti-tax evasion provisions through an enhanced framework for exchange of information between tax authorities in different jurisdictions.

“Both treaties achieve a balance of outcomes that will provide Australia with a competitive tax framework for international trade and investment, while ensuring the Australian revenue base is sustainable and suitably protected,” Costello observed.

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