ATO Interpretative Decision
ATO ID 2001/256
Income Tax
Approved Overseas Project - Continuous period of qualifying serviceFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Current
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is remuneration in respect of the taxpayer's work on an approved overseas project exempt from Australian tax under section 23AF of the Income Tax Assessment Act 1936 (ITAA1936)?
Decision
No. The remuneration in respect of the taxpayer's work on an approved overseas project is not exempt from Australian tax under section 23AF of the ITAA 1936 as the taxpayer did not meet the 91 days continuous service requirement set out in subsection 23AF(1) of the ITAA 1936.
Facts
The taxpayer spent a total of 104 days in a foreign country (including travel time), in 6 separate visits, over a 339 day period.
A further 4 days was spent on approved leave.
While in the foreign country, the taxpayer was performing personal services with regard to a project which was an 'approved project' for the purposes of section 23AF of the ITAA 1936.
During the intervening periods the taxpayer was in Australia.
The longest continuous period where the taxpayer was present in the foreign country, including travel between Australia and that country, was 32 days.
Reasons for Decision
For an exemption under section 23AF of the ITAA 1936 to apply, a taxpayer must be engaged in a continuous period of qualifying service of not less than 91 days, as required by subsection 23AF(1) of the ITAA 1936.
Subsection 23AF(3) of the ITAA 1936 provides that qualifying service includes time spent outside Australia working on the project, reasonable travel time between Australia and the project, absences due to accident or illness while engaged on qualifying service, and time spent on leave which accrued during the qualifying service.
In this case there were 6 periods of qualifying service and the longest continuous period of service was 32 days.
Where there is an intervening period or periods spent in Australia between separate periods of qualifying service, and the total of the intervening periods does not exceed one sixth of the total of the periods of qualifying service on the project, then under subsection 23AF(8) of the ITAA 1936, the separate periods of qualifying service shall together be taken to constitute a continuous period of qualifying service.
The taxpayer had 5 intervening periods which amounted to a total of 231 days. This exceeded one sixth of the 108 days qualifying service.
The 6 periods of qualifying service cannot therefore be regarded as a continuous period.
The taxpayer does not meet the 91 days continuous service requirement under subsection 23AF(1) of the ITAA 1936. The taxpayer is not eligible for an exemption under section 23AF of the ITAA 1936.
Amendment History
| Date of amendment | Part | Comment |
|---|---|---|
| 7 March 2014 | Legislative References | Correcting an error in citing the relevant legislative references. |
Legislative References:
Income Tax Assessment Act 1936
section 23AF
subsection 23AF(1)
subsection 23AF(3)
subsection 23AF(8)
ATO ID 2001/152
Keywords
Income
International tax
Exempt income
Approved overseas project
Foreign salary and wages
ISSN: 1445-2782
| Date: | Version: | |
| 19 July 2001 | Original statement | |
| You are here → | 7 March 2014 | Updated statement |
| 12 January 2018 | Archived |