• Source of income

    Attention

    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 tax 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:

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

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

    Last modified: 28 Jun 2013QC 28211