Edited version of private advice

Authorisation Number: 1052502919320

Date of advice: 05 February 2026

Ruling

Subject: Assessable income

Question

Is your pension only subject to income tax in Country Z?

Answer

Yes.

This ruling applies for the following periods:

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are a resident of Australia for taxation purposes.

You and your spouse returned to live in Australia.

You are a Country Z National and Australian citizen.

You retired a few years ago.

Prior to your retirement, you were employed overseas. The employer is part of the Country Z Federal Government.

The pension is the occupational pension and insurance scheme. This is compulsory for all persons who work in Country Z. As you worked for the Country Z Govt. your pension is managed by the relevant organisation, a specific fund dedicated to only government employees.

You have previously obtained a ruling from us which states the Pension is a foreign super fund and is not assessable in Australia.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 6-10

International Tax Agreements Act 1953

Reasons for decision

The assessable income of a foreign resident includes ordinary income and statutory income derived directly or indirectly from all Australian sources during the income year (sections 6-5 and 6-10 of the Income Tax Assessment Act 1997(ITAA 1997)).

Subsection 6-5(2) ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.

Pension income is ordinary income assessable under subsection 6-5(2) of the ITAA 1997.

In determining your liability to pay tax in Australia it is necessary to consider not only the domestic income tax laws but also any applicable double tax agreements.

Section 4 of the International Tax Agreements Act 1953 (Agreements Act) incorporates that Act with the Income ITAA 1936 and the ITAA 1997 so that all three Acts are read as one. The Agreements Act overrides both the ITAA 1936 and ITAA 1997 where there are inconsistent provisions (except in some limited situations).

Section 5 of the Agreements Act states that, subject to the provisions of the Agreements Act, any provision in an Agreement listed in section 5 has the force of law.

The Convention Between Australia and Country Z for The Avoidance of Double Taxation with Respect to Taxes on Income (Australia and Country Z DTA) is listed in section 5 of the Agreements Act.

As the pension is a federal government pension for your employment with the government, the relevant Article of the Australia and Country Z DTA applies.

Country Z has the sole taxing rights on the Pension as per the article.

Therefore, the Country Z Government pension you receive is not assessable in Australia under section 6-5 of the ITAA 1997.