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Edited version of private ruling
Authorisation Number: 1011786733685
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Ruling
Question 1:
Is the trustee of the overseas based superannuation fund excluded from the liability to withholding tax on its interest and/or dividend income derived from Australia under paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA1936)?
Answer: Yes
Question 2:
Is interest and/or dividend income derived by the trustee of the overseas based superannuation fund non-assessable income of the fund under section 128D of the ITAA 1936?
Answer: Yes
This ruling applies for the following period:
Year ending 30 June 2011
Year ending 30 June 2012
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
The scheme commences on
1 July 2010
Relevant facts and circumstances
The applicant has applied for a private ruling for the superannuation fund for foreign residents.
The applicant includes the following documentation:
· A letter from the tax authorities in the country of residence, certifying that the fund is a registered pension fund and is exempt from income tax in respect of income from investments or deposits
· A copy of a statement from the trustee of the overseas fund(the fund) confirming that the fund is an indefinitely continuing fund and a provident, benefit, superannuation or retirement fund, was established in a foreign country, was established and is maintained only to provide benefits for individuals who are not Australian residents, the central management and control of the fund is carried on outside Australia by entities none of whom is an Australian resident, an amount paid to the fund or set aside for the fund has not been or cannot be deducted under the ITAA 1997 and a tax offset has not been allowed or is not allowable for such an amount..
· Annual reports for the 2008 and 2009 years
· A brochure , pamphlet and other documents illustrating the activities of the fund and the benefits available
· The overseas fund is not part of the operation of the commingled fund.
· The fund was established by legislation.
Reasons for decision
Paragraph 128B(3)(jb) of the ITAA 1936 excludes interest and dividend income from withholding tax where that income:
(i) is derived by a non-resident that is a superannuation fund for foreign residents; and
(ii) consists of interest, or consists of dividends or non-share dividends paid by a company that is a resident; and
(iii) is exempt from income tax in the country in which the non-resident resides;
For the years ended 30 June 2008 and onwards, the term 'superannuation fund for foreign residents' is defined in section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997) as follows:
118-520(1) A fund is a superannuation fund for foreign residents at a time if:
(a) at that time, it is:
(i) an indefinitely continuing fund; and
(ii) a provident, benefit, superannuation fund or retirement fund; and
(b) it was established in a foreign country; and
(c) it was established, and is maintained at that time, only to provide benefits for individuals who are not Australian residents; and
(d) at that time, its central management and control is carried on outside Australia by entities none of whom is an Australian resident.
118-520(2) However, a fund is not a superannuation fund for foreign residents if:
(a) an amount paid to the fund or set aside for the fund has been or can be deducted under this Act; or
(b) a tax offset has been allowed or is allowable for such an amount.
Perusal of the legislative based rules of the fund indicates that the fund satisfies the definition of a superannuation fund for foreign residents for the purposes of section 118-520 of the ITAA 1997.
The statement by the trustee of the fund also confirms that the requirements of the definition have been met.
The tax authorities in the country of residence of the fund certify that the fund is a registered pension fund and is exempt from income tax in respect of income from investments and deposits.
Accordingly the interest and/or dividend income of the fund is excluded from withholding tax pursuant to paragraph 128B(3)(jb) of the ITAA 1936.
Section 128D of the ITAA 1936 provides that interest and dividend income that is excluded from withholding tax pursuant to paragraph 128B(3)(jb) of the ITAA 1936 is not assessable income.
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