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ARTICLE 24

U.S. Income Tax Treaty — australia tax treaty documents: austtech.pdf · 2026-10-03 edition · updated 2026-10-04 · United States

Mutual Agreement Procedure

This Article provides for cooperation between the competent authorities to resolve problems of double taxation.

Paragraph 1 (a) provides that a taxpayer who considers that the actions of one or both of the Contracting States may result in taxation not in accordance with the Convention may present his case to the competent authority of the State of which he is a resident or citizen. However, he

must present his case within three years from the first notification of the action giving rise to the potential double taxation.

Paragraph 1(b) provides that the competent authority, if it considers the claim to be justified, shall endeavor to resolve the case by mutual agreement with the competent authority of the other Contracting State. Any agreement reached shall be implemented without regard to any statutory time limits of the Contracting States. Thus, for example, if it is agreed that tax liability should be adjusted downward, a refund of the excess tax paid will be made even though the statute of limitations may have expired. However, no additional tax may be imposed if the statute of limitations has expired in the taxing State.

Paragraph 2 provides that the competent authorities shall endeavor by mutual agreement to resolve any difficulties or doubts which may arise in the interpretation or application of the Treaty. For example, the competent authorities may agree on the same allocation of income, deductions, credits or allowances; to the same determination of the source of particular items of income; on a common meaning of a term; and they may decide, for purposes of paragraph 2(c) of Article 4 (Residence) to which State an individual has closer personal and economic relations. They may also discuss the application of the provisions of domestic law regarding penalties, fines and interest in a manner consistent with the purposes of the Convention.

Paragraph 3 provides that the competent authorities may communicate with each other directly for the purpose of reaching agreements in accordance with this Article.

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▸Contents — U.S. Income Tax Treaty — australia tax treaty documents: austtech.pdf
U.S. Income Tax Treaty — australia tax treaty documents: austtech.pdf

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