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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
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Double Taxation Relief Manual: Guidance by country: Australia: Interest

Where the beneficial owner is in the other territory, a reduced rate of 10% withholding tax is payable.

However, under the Agreement, interest is payable gross where the beneficial owner is:

  • the territory itself, a political or administrative sub-division thereof, a local authority, any other body exercising governmental functions in the territory or a bank performing central banking functions there
  • a financial institution unrelated to and dealing wholly independently with the payer. There is a definition of financial institution: broadly a bank or similar enterprise. In cases of doubt, consult the wording of the Article.