The Australian Taxation Office has published Interpretative Decision ATO ID 2014/20 on May 30, 2014 regarding the income of a non-resident individual engaged by a resident employer resident in Canada is taxable in Australia despite that the employee was in Australia simply on a 4 month secondment. This termination was reached on the basis that the employer had a permanent establishment in Australia by asset of having important equipment in Australia. Under both article 7(3) of the Australia – Canada Income Tax Treaty (1980) (as amended through 2002) and the domestic rules, the equipment was operated by the non-resident individual, the individual’s payment is a permissible deduction in determining the profits of the permanent establishment.
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