ARTICLE 27

Miscellaneous

This Article provides certain miscellaneous rules of taxation under the Convention.

Paragraph 1 provides source rules. Income derived by a resident of the United States which, under the Convention, may be taxed by Australia, is deemed to have its source in Australia. Income derived by a resident of Australia which may be taxed by the United States under the Convention, other than solely by reason of citizenship or because the individual elected under U.S. law to be taxed as a resident of the United States, is deemed to have its source in the United States. With respect to U.S. citizens who are residents of Australia, to the extent that income which they derive is taxed by the United States by virtue of paragraph 3 of Article 1 (Personal Scope), such income is deemed to have its source in Australia for purposes of giving affect to paragraph 4 of Article 22 (Relief from Double Taxation).

Paragraph 2 provides that certain exemptions granted with respect to earned income by the source country, in accordance with Articles 14 (Independent Personal Services), 15

(Dependent Personal Services), 17 (Entertainers), or 19 (Governmental Remuneration), will be inapplicable to the extent that such income is not taxed by the residence country. For example, a United States resident who performs services in Australia as a self-employed person and who neither remains in Australia for 183 days nor has a fixed base in Australia, nevertheless may be taxed by Australia on the remuneration for the services performed there, notwithstanding Article 14 (Independent Personal Services), to the extent with such remuneration is exempt from U.S. income tax under section 911 of the Internal Revenue Code. The purpose of the exemption at source provided in the articles listed in this paragraph is to avoid double taxation, not to provide double exemption.