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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your private ruling

Authorisation Number: 1012555430729

Ruling

Subject: Foreign income

Questions and answers

This ruling applies for the following periods:

Year ending 30 June 2012,

Year ending 30 June 2013,

Year ending 30 June 2014,

Year ending 30 June 2015.

The scheme commenced on:

1 July 2011.

Relevant facts and circumstances

You are an Australian resident for income tax purposes.

You were engaged overseas as a contractor.

Australian was a donor to the project you were involved with.

You have provided a project id relating to your foreign service. This is not an approved project id.

You will be engaged in foreign employment for more than 91 continuous days.

You now intend to be engaged overseas as a member of the X and will be paid by Australian aid.

There are no agreements between Australia and the overseas countries that exempts the income from taxation in the overseas country.

There is no taxation treaty between the Australian Government and the overseas countries.

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)

Income Tax Assessment Act 1936 Section 23AF

Income Tax Assessment Act 1936 Section 23AF(1)

Income Tax Assessment Act 1936 Section 23AF(17)

Reasons for decision

Exemption Of Income Earned In Overseas Employment 

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:

Overseas country X

You were engaged in an overseas country X as a contractor. Subsection 23AG(7) of the ITAA 1936 defines foreign service as service in a foreign country as the holder of an office or in the capacity of an employee. Your foreign engagement as a contractor will not meet the definition of foreign service for the purposes of 23AG of the ITAA 1936. You will not be exempt under 23AG of the ITAA 1936.

Overseas country Y

You intend to be engaged in a overseas country Y as a member of the X. You will not be taxed in overseas country and have not been able to provide a tax agreement or memorandum of understanding. There is no Double Tax Agreement between Australia and the overseas country. As such, subsection 23AG(2) is not satisfied. You will not be exempt under 23AG of the ITAA 1936.

Exemption Of Certain Income Derived In Respect Of Approved Overseas Projects  

Subsection 23AF(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:

Overseas country

You were engaged in overseas as a contractor. You have provided a project id relating to your foreign service. This is not an approved project id. You will not be exempt under 23AF of the ITAA 1936.

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