FROM THE OFFICE OF PUBLIC AFFAIRS

Today Treasury Secretary John Snow and Michael Thawley, Ambassador of Australia, exchanged instruments of ratification for the Protocol amending the United States – Australia Income Tax Convention.  This exchange of instruments will bring the Protocol into force today.  The Protocol, which was signed in Canberra in September 2001, amends the existing tax treaty between the United States and Australia concluded in 1982.

At the ceremony, Treasury Secretary John Snow delivered the following remarks:

I would like to thank you all for being here today and to welcome our friends from the Australia, especially Michael Thawley, Australia’s Ambassador to the United States.

Ambassador Thawley and I have the privilege today of exchanging the instruments of ratification to bring into force a Protocol that amends the income tax treaty between the United States and Australia.  The U.S.-Australia tax treaty relationship has served the intended purpose of eliminating tax barriers to cross-border trade and investment.  But we can always make improvements and this Protocol will make our treaty relationship even better.  The provisions of this Protocol represent significant advances that will further eliminate tax barriers and thus facilitate trade and investment between our countries.

The Protocol that will enter into force today brings the existing treaty into greater conformity with U.S. tax treaty policy, while also reflecting some provisions found in the Australian model tax treaty.  The Protocol reflects the ever increasing importance of international activity to both our economies.

This Protocol is only the second tax agreement of the United States that completely eliminates cross-border withholding taxes on certain dividends paid by subsidiaries to their parents.  The Protocol also is notable for the substantial reductions in source-country withholding tax it provides for royalties and for certain interest payments.  This broad reduction in the full range of withholding taxes will help remove one of the remaining tax barriers to investment between the United States and Australia. 

Today's exchange of instruments of ratification marks the entry into force of the Protocol amending the tax treaty between the United States and Australia.  Thank you, Ambassador Thawley, for your participation in this important event.