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Australia - Commitment Fee Not Treated as Interest

Country:
Australia
Author:
A. Joseph
Issue:
Derivatives & Financial Instruments, 2010 (Volume 12), No 5
Published:
20 September 2010
The Australian Taxation Office has released an interpretative decision that clarifies the liability of non-resident lenders to withholding tax in Australia when a commitment fee is paid by a resident borrower. According to the decision, no withholding obligation will apply if the payment by the resident is in relation to the commitment by the lender to lend up to a pre-agreed limit.
 
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