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  • Source of income



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    The treaty specifies that for the purposes of the taxation laws of Australia and Timor-Leste, the JPDA is deemed to be part of Australia and Timor-Leste. Therefore, income derived from working in the JPDA is sourced in both Australia and Timor-Leste.

    The effect of the treaty is that:

    • residents of Australia are taxed on their total JPDA income at resident rates of tax, with a foreign tax credit allowed for the lesser of:
      • the Australian tax payable on the net assessable JPDA income* and
      • the tax paid to Timor-Leste
    • residents of Timor-Leste are taxed on 10% of their net assessable JPDA income (see Note) at non-resident rates of tax
    • residents of countries other than Australia and Timor-Leste are taxed on their total JPDA income at non-resident rates of tax, with a rebate allowed equal to 90% of the Australian tax payable on their net assessable JPDA income*.

    Note: Net assessable JPDA income is assessable JPDA income less allowable deductions relating to that income.

    Last modified: 15 Apr 2020QC 28035