The Israel Tax Authority is negotiating a treaty for prevention of double taxation with Australia, sources inform "Globes." Tax Authority head Moshe Asher is currently in advanced talks with Australian Treasurer Joe Hockey, who himself declared that the Australian government planned to begin negotiations for a double tax agreement (DTA) with Israel. The agreement is designed to strengthen economic ties between the two countries, and supply greater certainty for business, while reducing concern about double taxation.
Sources inform "Globes" that the meeting between the two countries DTA teams was scheduled for June 2016, with an Israeli delegation traveling to Australia. The delegation will include representatives from the Ministry of Finance State Revenue Division and the Tax Authority, who will meet with their Australian counterparts. Talks between the countries will take place before then by telephone and Internet and other media in order to coordinate expectations ahead of the meeting.
"Shot in the arm for business"
Adv. Harel Perlmutter, who specializes in international taxation at the Barnea & Co. law firm, believes this progress is "wonderful news. Israel and Australia have excellent economic and political relations, and Israeli investment in Australia has tripled over the past three years. At the same time, no significant talks have yet taken place on a tax treaty between the countries. This lack of a treaty sometimes brings about situations of double taxation and uncertainty, together with problems of withholding tax in trade and business, especially among Israeli companies seeking to operate and invest in Australia, and vice versa."
Perlmutter says that a DTA between countries "will be a shot in the arm for business, investments, trade, and cooperation. Australia regards Israel as a center for high tech, advanced agriculture, finances, etc., and a tax treaty can therefore enhance Australian investments in the Israeli market, together with business opportunities for Israelis in Australia."
Perlmutter added that the timing of the negotiations for a new tax treaty was no coincidence, saying, "In addition to pressure from Australian companies doing business in Israel to eliminate double taxation problems, the multinational convention for information exchanges between countries, especially OECD members, which Israel is about to sign, has removed another barrier, and given a green light to those who have up until now opposed the binational agreement because of information transmission considerations."
Published by Globes [online], Israel business news - www.globes-online.com - on November 3, 2015
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