Draft Taxation Determination

TD 93/D277

Income tax: is income to which Australia has no taxing right, because of a double tax agreement but which is also exempt from tax under sections 23AF or 23AG of the Income Tax Assessment Act 1936, included in the "exempt amount" for the purpose of the exemption with progression calculation?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 94/58.

FOI status:

draft only - for comment

Preamble

1. No. The references in subsections 23AF(17A) and 23AG(3) to "an amount that is exempt from tax under this section" apply in respect of income that only qualifies for exemption by reason of sections 23AF or 23AG and not for any other reason.

Example

An Australian resident renders service to the Swedish Government. The service is performed in Sweden. The service constitutes "foreign service for a continuous period of not less than 91 days" as required by subsection 23AG(1). Article 19 of the Sweden/Australia Double Tax Agreement allocates to Sweden the sole taxing right over any remuneration received in respect of this service. This remuneration will not be taken into account for the purposes of the calculation of Australian tax payable on other income.

Commissioner of Taxation
11 November 1993

References

BO CHM TD013

Related Rulings/Determinations:

TD 93/D176
IT 2563

Subject References:
double tax agreements
exempt income
foreign source income
overseas employment income

Legislative References:
ITAA 23AF
ITAA 23AG