New DTA with Germany

February 2017 

Australia and Germany have replaced the existing Double Tax Agreement that was established in 1972. 

The new Australia-Germany double-tax agreement is now in place, having been ratified in December 2016. The new DTA replaces the existing version which was signed in 1972.

Why a new DTA?

The new DTA aligns with recent OECD tax treaty developments, including new provisions recommended by the OECD and G20 that are intended to minimise tax avoidance opportunities and create a more certain business environment for taxpayers.

What came into effect on 1 January?

Some of the DTA's new rules entered into effect on 1 January 2017, including those relating to withholding tax rates on non-resident income and with respect to certain pensions first paid from1 January 2017.

The maximum withholding tax rates on various types of income have been adjusted to:

  • Dividends: 15%
  • Interest: 10%
  • Royalties: 5%

There are also provisions that reduce the withholding rate on dividends to 0% or 5% if certain conditions are met (e.g. where the recipient shareholder is a company).

Does this impact your business? Contact our International Tax Team on 02 9957 4033. 

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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