Source of income

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

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.