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Edited version of your private ruling
Authorisation Number: 1012453275544
You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you or to someone acting o your behalf.
The Register of private binding rulings is a public record of private rulings issued by the ATO. The register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies.
The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.
Ruling
Subject: Exempt Foreign Income
Question and answer
Are the salary and allowances you earned while employed overseas exempt from income tax in Australia?
Yes.
This ruling applies for the following period:
Year ending 30 June 2014.
The scheme commenced on:
1 July 2013.
Relevant facts and circumstances
You are an Australian resident for income tax purposes.
You are being deployed to work in an overseas country for a continuous period that is greater than 91 days.
Your are employed by an Australian Government Department.
You will be engaged in foreign employment for more than 91 continuous days.
There is no taxation treaty between the Australian Government and the overseas country.
The overseas country normally taxes salary and wage income.
Relevant legislative provisions:
Income Tax Assessment Act 1936 Section 23AG
Income Tax Assessment Act 1936 Section 23AG(1)
Income Tax Assessment Act 1936 Section 23AG(1AA)
Income Tax Assessment Act 1936 Section 23AG(2)
Reasons for decision
Subsection 23AG(1) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that foreign earnings are exempt from income tax where all of the following requirements are satisfied:
· you are a resident of Australia and a natural person,
· you are engaged in foreign service,
· the foreign service is for a continuous period of at least 91 days,
· you derive foreign earnings from that foreign service,
· the foreign service is directly attributable to an activity that is listed in subsection 23AG(1AA) of the ITAA 1936, and
· the foreign earnings are not exempt from income tax in the foreign country only because of one of the reasons listed in subsection 23AG(2) of the ITAA 1936.
Given a consideration of the whole arrangement, it is accepted that you meet the above criteria and the income referable to your foreign service is exempt from income tax in Australia.
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