Clarify income tax exemptions for IMF and WBG short-term missions
As part of the 2020–21 Budget, the government announced that it will clarify privileges and immunities, including income tax exemptions, available to Australian individuals performing short-term missions on behalf of the International Monetary Fund (IMF) and the following three institutions of the World Bank Group (WBG):
- International Bank for Reconstruction and Development (IBRD)
- International Development Association (IDA)
- International Finance Corporation (IFC)
The legislative instrument to give effect to this measure commenced on 2 April 2022. The legislative instrument applies retrospectively from 1 July 2017. It will affect relevant tax returns for the 2017–18, 2018–19, 2019–20, 2020-21 and subsequent income years.
The measure will clarify that Australian short-term experts and consultants are entitled to an exemption from income tax for their relevant income from the abovementioned organisations.
This aligns Australia’s domestic legislative framework with its international obligations and provides certainty for taxpayers. The outcome is consistent with Australia’s longstanding support for, and contributions to, the IMF and WBG.
Tax returns not yet lodged
If you haven't yet lodged a tax return for one or more of the impacted income years, you should not include payments you received from your short-term expert or consultant engagements with the IMF or the identified institutions of the WBG in your assessable income.
Tax returns already lodged
If you've already lodged your 2017–18, 2018–19, 2019–20 or 2020-21 income tax returns and included the relevant payments in your assessable income, you can lodge an amendment request. If you choose to do this, please amend your return so the amount that becomes exempt is shown at item 20 label N Exempt foreign employment income and lodge within the applicable time period for lodging an amendment.
Note: If you're outside the timeframe to lodge an amendment you can still have the amount that is exempt income excluded by lodging an objection along with a request for an extension of time to object.
If you have already lodged your amendment request, we will process those amendments as soon as possible.
If you lodge your amendment via your tax agent, ask them to use the following wording as the reason for your amendment request: 'Foreign sourced income – IMF/World Bank mission' (whichever is applicable).
The ATO will update and finalise Draft Taxation Ruling TR 2019/D1 Income tax: income of international organisations and persons connected with them that is exempt from income tax following the enactment of this measure.
The government plans to clarify income tax exemptions for Australian individuals performing IMF and WBG missions.