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Australia Signs Offshore Agreements

by Mary Swire,, Hong Kong

25 May 2010

The Australian government has announced that agreements for the allocation of taxing rights with the Isle of Man, Jersey and the British Virgin Islands have come into force.

These so-called Additional Benefits Agreements (ABAs) help to prevent double taxation by allocating the taxing rights over certain income of pensioners, students and government employees who are resident of Australia, the Isle of Man, Jersey or the British Virgin Islands.

The ABAs also provide for a mechanism to deal with disputes arising from transfer pricing adjustments.

The ABA with the Isle of Man entered into force on March 18, 2010; the ABAs with the British Virgin Islands and Jersey entered into force on April 12, 2010 and April 15, 2010 respectively.

“These arrangements are part of the new taxation and financial relationship between Australia and these countries,” Assistant Treasurer, Senator Nick Sherry, said on May 21.

“These three jurisdictions have also signed Tax Information Exchange Agreements with Australia, as part of the global push for greater tax transparency in the financial system,” he added.

Australia provides technical assistance, through the Tax Office, to these countries in order to bolster their technical capacity. Support ranges from exchange of information best practice to sharing taxpayer compliance strategies.

On May 13, 2010, Australia and the Marshall Islands also signed an ABA in conjunction with a tax information exchange accord.

This comprehensive report in our Intelligence Report series examines the global and national landscapes in which companies can use transfer pricing to improve their after-tax returns, including summaries of recent developments in design of the corporate supply train, the usefulness of 'offshore' in international corporate tax planning, and a section covering the spread of DTAAs and CFC laws. It is available in the Lowtax Library at and a description of the report can be seen at
TAGS: Isle of Man | tax | tax information exchange agreement (TIEA) | double tax agreement (DTA) | Australia | Jersey | Marshall Islands | Virgin Islands | agreements | transfer pricing | British Virgin Islands

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