ATO Interpretative Decision
ATO ID 2001/795 (Withdrawn)
Income Tax
Assessability of German disability support pension - first payable after 1 July 1983FOI status: may be released
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This ATO ID is withdrawn as it no longer reflects the ATO view of this issue.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a German disability support pension received by an Australian resident taxpayer and first payable after 1 July 1983, assessable under section 27H of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
Yes. A German disability support pension received by an Australian resident taxpayer and first payable after 1 July 1983 is assessable under section 27H of the ITAA 1936.
Facts
The taxpayer is a resident of Australia for taxation purposes and receives a disability support pension from the State Department in Germany.
The German disability support pension was paid after retrenchment from work due to ill health and was first payable after 1 July 1983.
Disability support pensions are exempt from tax in Germany.
Reasons for Decision
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. However, if an amount is exempt income it is not included in the assessable income of a taxpayer (section 6-15 of the ITAA 1997).
Agreements that Australia has with various countries under the International Tax Agreements Act 1953 (the Agreements Act) operates to prevent the double taxation of income.
Article 18 of Schedule 9 (the Australia - German Agreement) to the Agreements Act provides that pensions or annuities paid from Germany to a resident of Australia will only be taxable in Australia.
Subsection 27H(1) of the ITAA 1936 provides that annuities first payable on or after 1 July 1983 are included in the assessable income of the taxpayer with the undeducted purchase price excluded if the annuity was purchased.
The Australian resident taxpayer has received a German disability support pension which is not taxable in the Germany. As the pension was first payable on or after 1 July 1983, the assessable income of the taxpayer will include the disability pension under subsection 27H(1) of the ITAA 1936.
Year of income: Year ended 30 June 1999 Year ended 30 June 2000 Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1936
section 27H
subsection 27H(1)
subsection 6-5(2)
section 6-15 International Tax Agreements Act 1953
Schedule 9, Article 18
Keywords
Disability payments & subsidies
Disability superannuation pensions
Double Tax Agreements
Foreign Income
Foreign pension
Foreign Pension Income
Germany
ISSN: 1445-2782
| Date: | Version: | |
| 7 June 2001 | Original statement | |
| You are here | 12 May 2006 | Archived |