Transcript

of

The Hon Peter Costello mp

Treasurer

&

His Excellency Mr J. Thomas Schieffer
US Ambassador to Australia

at

Signing of Protocol, Double Tax Agreement

Thursday, 27 September 2001
4pm

E&OE

TREASURER:

Well, ladies and gentlemen, the Ambassador and I have just signed a protocol to modernise Australias Double Taxation Agreement with the United States. This is something that has been negotiated for a considerable period of time. Under the newly-negotiated Treaty, for many Australian companies who are, have branches or subsidiaries in the United States, the current Dividend Withholding Tax will be reduced to a rate of zero. In return, the Royalty Withholding Tax, which applies to intellectual property, will be reduced, and this will also have advantage for Australian businesses in giving them access to cheaper technology.

Australias investment overseas is greatest in the United States of America. It is a very large market for Australian companies. Those companies that earn income in the United States, will now be able to repatriate their dividends and unlock that, which will be good for business and good for investment.

Mr Ambassador, can I thank the United States Government through you for the spirit in which this Treaty was negotiated. I can assure you that the IRS was no pushover, that they were very tough negotiators. I want to thank our negotiators, many of whom are here today, for the work that they have put in. And I want to really indicate that this represents a new step forward between our countries of mutual investment earnings, and the kind of close relationship that we have had.

Thank you very much.

AMBASSADOR:

On behalf of the United States, I too, am delighted to be here. And I want to reassure you that you are not the only one that has had a tough time with the IRS. They have always been tough on me too. But I am glad that we could reach this agreement because I think it is an agreement that benefits both parties. It will increase business between us, it will increase the flow of capital, I think, into Australia, and investment of Australia into America, and investment of America into Australia. And if there is anything that we have learned over these last few years, it is that when we can reach agreement, we wind up with an atmosphere that benefits both of us. And I think we have done that here, and I am very happy to be here with you today to sign it.

Thank you.

TREASURER:

Thank you very much, thank you.