'Send a strong man to England - capacity to put up a fight more important than intimate knowledge of income tax acts and practice': Australia and the development of the dominion income tax relief system of 1920

Taylor, C. John
June 2014
eJournal of Tax Research;Jun2014, Vol. 12 Issue 1, p32
Academic Journal
The system of Dominion Income Tax Relief, which operated between the United Kingdom and Australia between 1st July 1921 and 30th June 1946, offered a solution to the problem of international juridical double taxation which differed in significant respects from the solution subsequently developed in bi-lateral double taxation treaties. The system allowed a country taxing on the basis of residence (in this case the United Kingdom) to give a credit for underlying foreign tax paid on dividends irrespective of the nature and extent of the shareholding in the foreign company. More fundamentally the system required a sharing of the obligation to relieve international juridical double taxation between the residence and source country that did not depend on a differential treatment of particular categories of income. Using the archival sources that have been available to the author this paper examines: (1) the views of the then Australian Commissioner of Taxation on the problem; (2) the effect that submissions by the Australian representative (the Commonwealth Statistician) at a conference of Dominion representatives with the Sub Committee of the United Kingdom Royal Commission had on the scheme of Dominion Income Tax; and (3) the reasons for the subsequent demise of the scheme.


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