ATO Interpretative Decision
ATO ID 2002/1065
Income Tax
Assessable Income - non resident taxpayer in a non Double Tax Agreement country in receipt of Australian sourced pensionFOI status: may be released
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This ATO ID contains references to repealed provisions, some of which may have been re-enacted or remade. The ATO ID is current in relation to the re-enacted or remade provisions.
Australia's tax treaties and other agreements except for the Taipei Agreement are set out in the Australian Treaty Series. The citation for each is in a note to the applicable defined term in sections 3AAA or 3AAB of the International Tax Agreements Act 1953.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a non-resident taxpayer's Australian superannuation pension included in their assessable income under section 27H of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
Yes. A non-resident taxpayer's Australian superannuation pension will be included in their assessable income under section 27H of the ITAA 1936.
Facts
The taxpayer is not a resident of Australia. They are a resident of a foreign country.
Australia does not have a double tax agreement with this foreign country.
The taxpayer previously resided and worked in Australia.
They are in receipt of an Australian superannuation pension.
Reasons for Decision
Subsections 6-5(3) and 6-10(5) of the Income Tax Assessment Act 1997 provides that the assessable income of a non resident includes both the ordinary and statutory income derived from all Australian sources.
Annuities and contributory pensions are specifically made assessable under section 27H of the ITAA 1936. The taxpayer's Australian superannuation pension will be assessable under this section.
As the taxpayer is a non-resident the Australian pension will be taxed at non-resident tax rates.
In determining whether or not an amount of income received by a non-resident is assessable in Australia, it is necessary to also consider any double tax agreement Australia may have with the country in which the taxpayer resides.
However, as the country where the taxpayer is currently residing does not have a double tax agreement with Australia the assessability of Australian sourced income is determined on the basis of Australian domestic law.
Therefore, the receipt of an Australian superannuation pension by a non resident taxpayer will be included in their assessable income under section 27H the ITAA 1936.
Date of decision: 1 November 2002Year of income: Year ended 30 June 2002
Legislative References:
Income Tax Assessment Act 1997
subsection 6-10(3)
subsection 6-10(5)
section 27H Related ATO Interpretative Decisions
ATO ID 2002/1064
Keywords
Assessable income
Double tax agreements
Non resident individuals
Superannuation pension income
Resident/residency
ISSN: 1445-2782