3Interpretation

#### 3 Interpretation (1) In this Act: > agreement means a treaty or other agreement described in section 3AAA (about current agreements) or 3AAB (about agreements for earlier periods). > Note: Most of the conventions, protocols and other agreements described in these sections are set out in the Australian Treaty Series. In 2023, the text of an agreement in the Australian Treaty Series was accessible through the Australian Treaties Library on the AustLII website (www.austlii.edu.au). > Assessment Act means the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997. > Australian tax means: (a) income tax imposed as such by an Act; or (b) fringe benefits tax imposed by the Fringe Benefits Tax Act 1986. > Note: This includes Medicare levy (see subsection (10)). > foreign tax means tax, other than Australian tax, which is the subject of an agreement. > prescribed trust estate, in relation to a year of income, means a trust estate that is a public trading trust, within the meaning of Division 6C of Part III of the Income Tax Assessment Act 1936, in relation to the year of income. (2) For the purpose of this Act and the Assessment Act, a reference in an agreement to profits of an activity or business shall, in relation to Australian tax, be read, where the context so permits, as a reference to taxable income derived from that activity or business. (2A) After the commencement of this subsection, a reference in an agreement to income from shares, or to income from other rights participating in profits, does not include a reference to a return on a debt interest (as defined in Subdivision 974‑B of the Income Tax Assessment Act 1997). (3) For the purposes of this Act, an amount of income derived by a person, being income other than interest or royalties, shall be deemed to be income attributable to interest or royalties, as the case may be: (a) if the person derived the amount of income by reason of being beneficially entitled to an amount representing the interest or royalties; or (b) if the person derived the amount of income as a beneficiary in a trust estate and the amount of income can be attributed, directly or indirectly, to the interest or royalties or to an amount that is to be deemed, by any application or successive applications of this subsection, to be an amount of income attributable to the interest or royalties. (4) Where a beneficiary in a trust estate, other than a trust estate that is a prescribed trust estate, in relation to the year of income, is presently entitled to income of the trust estate, that income shall, for the purposes of this Act, be deemed to be an amount of income derived by the person. (5) To the extent that an agreement provides that the expression immovable property has the meaning it has under the law of Australia, that expression, for the purposes of that agreement, includes real property. (8) Where, by virtue of a provision of an agreement, the expression royalties as used in, or in a particular provision of, that agreement has the meaning that that expression has under the law of Australia relating to income tax, that expression has, for the purposes of that agreement or of that particular provision, as the case may be, the meaning that that expression has by virtue of subsection 6(1) of the Income Tax Assessment Act 1936. (9) Where, by virtue of a provision of an agreement, expressions used in, or in a particular provision of, that agreement and not otherwise defined for the purposes of that agreement or of that particular provision have the meanings that those expressions have under the law of Australia relating to income tax, subsection (8) does not affect the interpretation of that agreement or of that particular provision, as the case may be, in relation to the meaning of expressions other than the expression royalties. (10) For the purposes of this Act, Medicare levy shall be deemed to be income tax and to be imposed as such and, unless the contrary intention appears, references to income tax or tax shall be construed accordingly. (11) Where: (a) a beneficiary of a trust estate (not being a prescribed trust estate) who is a resident of a country with which, or with the government of which, Australia, or the Government of Australia, has made an agreement before the commencement of this subsection is presently entitled, either directly or through one or more interposed trust estates, to a share of the income of the trust estate derived from the carrying on by the trustee in Australia of a business through a permanent establishment in Australia; and (b) under the agreement, the income is to be dealt with in accordance with the article (in this subsection referred to as the business profits article) of the agreement relating to the taxing of income of an enterprise of a Contracting State where the enterprise carries on a business in the other Contracting State through a permanent establishment in the other Contracting State; for the purpose of determining whether the beneficiary’s share of the income may be taxed in Australia in accordance with the business profits article: (c) the beneficiary shall be deemed to carry on in Australia, through a permanent establishment in Australia, the business carried on in Australia by the trustee; and (d) the beneficiary’s share of the income shall be deemed to be attributable to that permanent establishment. (11A) If: (a) the licensee of a spectrum licence (within the meaning of the Radiocommunications Act 1992), or a person authorised under section 68 of that Act by the licensee, derives income from operating radiocommunications devices (within the meaning of that Act) under the licence or from authorising others to do so; and (b) the licensee or authorised person is a resident of a country (other than Australia), or a territory (other than an Australian‑controlled territory), to whose residents an agreement applies; and (c) under the agreement, the income is to be dealt with in accordance with the business profits article of the agreement referred to in paragraph 3(11)(b); for the purpose of determining whether the income may be taxed in Australia in accordance with the business profits article: (d) the licensee or authorised person is taken to carry on a business, through a permanent establishment, in Australia; and (e) the income is taken to be attributable to that permanent establishment. (12) In subsections (11) and (11A): > Contracting State, in relation to an agreement, means a country which, or the government of which, is a party to the agreement. > income includes profit. > permanent establishment in relation to an agreement, has the same meaning as in the agreement.