Australian Taxation Office explains interaction between tie-breaker clause in treaty between Australia and New Zealand and domestic tax legislation

The Australian Taxation Office (ATO) issued Interpretative Decision ID 2006/128, in which it explained the application of the Business Profits Article in relation to the Interest Article in the tax treaty between Australia and New Zealand (the tax treaty). Briefly, ID 2006/128 concluded that domestic interest withholding tax will apply to interest payments made by an Australian resident to a company which (a) is a resident in both Australia and New Zealand, (b) is treated as a …