ARTICLE 2

Taxes Covered

Paragraph 1 enumerates the existing taxes to which the Convention applies in each Contracting State.

In the United States these are the Federal income taxes imposed by the Internal Revenue Code, but excluding the accumulated earnings tax and the personal holding company tax. Social security taxes and excise taxes, such as those on private foundations and foreign insurers, are not covered by the Convention.

In Australia the Convention covers the income tax, including the additional tax on undistributed income of private (closely held) companies.

Paragraph 2 provides that taxes enacted after the date of signature of the Convention (August 6, 1982) are also covered if they are substantially similar to the taxes referred to in paragraph 1. The competent authorities agree to notify each other at the end of each calendar year of substantial changes in their income tax laws or in the official interpretation of those laws or of the Convention.