Australia’s Department of the Treasury, in a release, announced a public consultation regarding the draft legislation introducing a tax treaty with Portugal on 3 December 2024.
The proposed legislation aims to eliminate double taxation and update the explanatory notes within the 1953 International Tax Agreements Act between the two nations. The Convention also broadly follows the OECD Model. The draft legislation includes key provisions on integrity and tax certainty, as recommended by the Base Erosion and Profit Shifting (BEPS) project.
Under the Convention,”Treasury Laws Amendment Bill 2024: Portuguese Tax Convention – Exposure Draft”, Australia and Portugal agree to restrict their respective taxing rights to alleviate double taxation. The Convention allocates taxing rights between Australia and the Portuguese Republic over different categories of income, including business profits, dividends, interest, royalties, and pensions.
The consultation is set to conclude on 22 December 2024.
The draft legislation, “The Convention between Australia and the Portuguese Republic for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance” was signed on 30 November 2023. The treaty will apply after both countries exchange instruments of ratification.
