ATO Interpretative Decision
ATO ID 2002/280 (Withdrawn)
Income Tax
Double tax - Assessability of an Australian sourced pension received by a resident of SwitzerlandFOI status: may be released
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This ATO ID contains a view in respect of section 27H of the Income Tax Assessment Act 1936 (ITAA 1936). Section 27H of the ITAA 1936 has been amended for the 2007-08 income year and later income years. This ATO ID is withdrawn as it does not reflect the amendments made to section 27H of the ITAA 1936. This ATO ID continues to be a precedential view in respect of decisions for income years up to, and including, the 2006-07 income year.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 the taxpayer, a resident of Switzerland, assessable on their Australian sourced superannuation pension under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. The Swiss resident taxpayer is not assessable on their Australian sourced superannuation pension under section 6-5 of the ITAA 1997 because of the operation of the Double Tax Agreement between Australia and Switzerland.
Facts
The taxpayer is a resident of Switzerland.
The taxpayer received an Australian sourced superannuation pension from which no Australian tax was deducted.
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.
Section 10-5 of the ITAA 1997 lists those provisions about assessable income. Included in this list is section 27H of the Income Tax Assessment Act 1936 (ITAA 1936) which provides that annuities and superannuation pensions are included in assessable income.
In determining liability to Australian tax on Australian sourced income received by a non-resident, it is necessary to consider not only the income tax laws but also any applicable double tax agreement contained in the International Tax Agreements Act 1953 ( the Agreements Act).
Section 4 of the Agreements Act incorporates that Act with the ITAA 1936 and ITAA 1997 so that those Acts are read as one. The Agreements Act effectively overrides the ITAA 1936 and ITAA 1997 where there are inconsistent provisions (except for some limited provisions).
Schedule 15 to the Agreements Act contains the double tax agreement between Australia and Switzerland (the Swiss Agreement). The Swiss Agreement operates to avoid the double taxation of income received by Australian and Swiss residents.
Article 18 of the Swiss Agreement provides that an Australian pension received by a Swiss resident is subject to tax in Switzerland.
The taxpayer is a resident of Switzerland for income tax purposes and receives an Australian sourced superannuation pension. Article 18 of the Agreements Act operates to tax the superannuation pension in Switzerland only and therefore is not included in the assessable of the taxpayer under section 6-5 of the ITAA 1997.
Date of decision: 18 February 2002
Legislative References:
Income Tax Assessment Act 1997
section 6-5
subsection 6-5(3)
subsection 6-10(5)
section 10-5
section 27H International Tax Agreements Act 1953
Schedule 15, Article 18 Related ATO Interpretative Decisions
ATO ID 2002/125
Keywords
Double tax agreements
Non resident individuals
Superannuation pension income
Switzerland
ISSN: 1445-2782
| Date: | Version: | |
| 18 February 2002 | Original statement | |
| You are here | 9 November 2007 | Archived |