ADIA is the peak business organisation representing manufacturers and suppliers of dental products. Our vision is for an industry that empowers oral health professionals to advance the health and wellbeing of all Australians...................... — ADIA Strategic Plan


Tax Treaty Between Australia & Germany

Tax Treaty Between Australia & Germany

28th Mar 16

Summary —

A new tax treaty between Australia and Germany will reduce tax impediments to increased bilateral trade and investment and improve the integrity of the tax system. Importantly, it gives effect to the OECD/G20 – Base Erosion and Profit Shifting Recommendations and is reflects the Australian Government’s continued commitment to tackling international tax avoidance practices.

Key Issues For The Dental Industry —

On 12 November 2015, Australia and Germany signed a new tax treaty that replaces a previous double taxation agreement between Australia and Germany signed in 1972.  The Government has developed draft legislation to give the new treaty the force of law in Australia and the Australian Dental Industry Association (ADIA) is working with member businesses to provide comment to the Australian Government on the proposed legislation and the accompanying explanatory memorandum. 

 The express purpose of the Australian-German tax treaty is to eliminate double taxation with respect to taxes on income and on capital without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in the Australian-German tax treaty for the indirect benefit of residents of a third country). 

Treaty benefits will be available for income (including profits or gains) derived by or through fiscally transparent entities or arrangements but only to the extent that the income is treated as the income of a resident of one of the countries under that country’s domestic law. 

Further information as to how the dental industry is providing advice to The Treasury on this matter is available via the link below:

  ADIA Member Consultation Page

The Australian-German tax treaty agreement modernises the bilateral tax arrangements between Australia and the Federal Republic of Germany (Germany) for the purpose of eliminating double taxation. It also aims to prevent fiscal evasion and avoidance, through the inclusion of a range of integrity provisions and by enabling the respective tax authorities to exchange taxpayer information and provide mutual assistance to each other in the collection of both countries’ outstanding tax debts. It broadly follows the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention on Income and on Capital (OECD Model) and, in doing so, broadly reflects current Australian and international tax policy settings.

Legislation is being proposed that amends the International Tax Agreements Act (Cth) 1953 to give the new Australian-German tax treaty the force of law in Australia. It also makes consequential and technical amendments relating to international tax agreements.

The treaty will enter into force after both countries have completed their respective domestic requirements and instruments of ratification have been exchanged.

Member Engagement —

ADIA provides leadership, strategy, advocacy and support. Our members set our agenda, fund our activities and directly benefit from the results. On matters associated with tax policy, ADIA staff that negotiate with the Australian Government at a parliamentary and departmental level receive advice and guidance from members that who serve on the ADIA-BAC Business Affairs Committee.

Currency of Information —

This update was issued on 28 March 2016 and please note that changes in circumstances after the publication of material or information may impact upon its accuracy and also change regulatory compliance obligations.

Disclaimer —

The statements, regulatory and technical information contained herein are believed to be accurate and are provided for information purposes only. Readers are responsible for assessing its relevance and verifying the accuracy of the content. To the fullest extent permitted by law, ADIA will not be liable for any loss, damage, cost or expense incurred in relation to or arising as a result of relying on the information presented here. 

This publication is available for your use under a Creative Commons Attribution 3.0 Australia licence, with the exception of the ADIA logo, other images and where otherwise stated. 

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