ATO Interpretative Decision
ATO ID 2002/104 (Withdrawn)
Income Tax
Foreign salary and wage income derived by non residentFOI status: may be released
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ATO ID 2002/104 is withdrawn from the database because, following legislative changes which became effective on 14 September 2006, it is no longer current for years of income happening on or after 30 June 2006. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions for section 23(r) of the ITAA 1936 occurring before that date. An ATO ID dealing with the replacement legislation will issue shortly.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 foreign salary and wage income derived by a taxpayer while a non resident of Australia assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. Foreign income derived by a taxpayer while a non resident of Australia is not assessable income under section 6-5 of the ITAA 1997.
Facts
The taxpayer lived and worked overseas for a number of years.
The taxpayer was a non-resident of Australia during the period they were overseas and received salary and wage income from an overseas source.
Reasons for Decision
Subsection 6-5(3) of the ITAA 1997 provides that ordinary income derived by a non resident directly or indirectly from Australian sources, as well as other ordinary income included by a provision on a basis other than having an Australian source, is assessable. Statutory income from all Australian sources, or included by a provision on a basis other than having an Australian source, is also included in a non resident's assessable income under subsection 6-10(5) of the ITAA 1997.
Income derived by a non resident from sources outside of Australia (except where it is specifically included by a provision on a basis other than having an Australian source) is exempt from tax under paragraph 23(r) of the Income Tax Assessment Act 1936 (ITAA 1936).
The taxpayer is a non resident of Australia and the income was not paid from an Australian source. The income is not included in the taxpayer's assessable income on another basis, therefore the income will not be assessable under section 6-5 of the ITAA 1997. Paragraph 23(r) of the ITAA 1936 will apply to exempt from tax the income derived by the taxpayer.
Date of decision: 29 November 2001
Legislative References:
Income Tax Assessment Act 1997
subsection 6-5(3)
subsection 6-10(5)
paragraph 23(r) Related ATO Interpretative Decisions
ATO ID 2001/604
Keywords
Non resident individuals
Resident/residency
Foreign salary & wages
ISSN: 1445-2782
| Date: | Version: | |
| 29 November 2001 | Original statement | |
| You are here | 27 April 2007 | Archived |