ATO Interpretative Decision
ATO ID 2001/178 (Withdrawn)
Income Tax
East Timor: Overseas Income of Australian Defence Force Employee - exempt (section 23AG)FOI status: may be released
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This decision has been withdrawn from 14 February 2002.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Are income and allowances derived in East Timor by a member of the Australian Defence Force (ADF) as part of the Australian Training Support Team (ATST) exempt from Australian income tax pursuant to section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936)?
Decision
Yes. Income and allowances derived in East Timor as a member of the ADF as part of the ATST are exempt from Australian income tax pursuant to section 23AG of the ITAA 1936.
Facts
The taxpayer is a member of the ADF posted to East Timor as part of the ATST. The taxpayer commenced duties in East Timor in the 2001 financial year with an expected duration of six (6) months. The taxpayer's role is to assist the East Timor Transitional Administration in raising, developing and training the East Timor Defence Force.
The Australian Department of Defence pays the taxpayer's salary and allowances through the normal defence pay system for the duration of the posting in East Timor.
Reasons for Decision
Subsection 23AG(1) of the ITAA 1936 has two conditions for an exemption from tax. These are that the resident taxpayer has income and allowances derived from foreign service and that the foreign service is for a continuous period of not less than ninety one (91) days.
Under subsection 23AG(7) of the ITAA 1936 foreign service means service in a foreign country as the holder of an office or in the capacity of an employee. As the taxpayer will be on duty as an employee of the ADF the condition of foreign service is satisfied.
As the taxpayer will be performing foreign service for a period of six (6) months the time condition is also satisfied.
The taxpayer will satisfy the requirements of section 23AG of the ITAA 1936.
Consequently the income and allowances will be exempt from income tax under 23AG of the ITAA 1936.
Date of decision: 15 June 2001
Legislative References:
Income Tax Assessment Act 1936
23AG
23AG(1)
23AG(7)
Related Public Rulings (including Determinations)
Taxation Ruling TR 96/15
Keywords
Defence force overseas service
Exempt income
Foreign income
ISSN: 1445-2782
| Date: | Version: | |
| 15 June 2001 | Original statement | |
| You are here | 14 February 2002 | Archived |
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