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Edited version of your written advice

Authorisation Number: 1012707321675

Ruling

Subject: Assessability of foreign employment income

Question and answer

Is the foreign employment income you derive from working in overseas exempt income in Australia under section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936)?

Yes.

This ruling applies for the following periods:

Year ended 30 June 2012

Year ended 30 June 2013

Year ended 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 taxation purposes.

You are employed by an organization overseas.

You carry out Official Development Assistance overseas.

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

You are exempt from paying income tax overseas under the MOU between overseas Government and the Government of Australia.

Relevant legislative provisions:

Income Tax Assessment Act 1936 Section 23AG

Reasons for decision

Subsection 23AG (1AA) of the ITAA 1936 provides that foreign earnings are not exempt from tax unless the continuous period of Foreign Service is directly attributable to any of the following:

You are employed to carry out ODA which is funded by AusAID.

You satisfy one of the conditions for exemption under subsection 23AG(1AA) of the ITAA 1936.

Subsection 23AG(2) of the ITAA 1936 provides that no exemption is available under subsection 23AG(1) of the ITAA 1936 in circumstances where an amount of foreign earnings derived from service in a foreign country is exempt from tax in the foreign country solely because of:

There is a MOU between Australia and the overseas country. Therefore, subsection 23AG(2) of the ITAA 1936 will not apply to deny the exemption under subsection 23AG(1) of the ITAA 1936.

In your case, you are an Australian resident for taxation purposes and are engaged in ODA for a continuous period of not less than 91 days.

Accordingly, the salary you receive during your employment overseas are exempt from income tax in Australia under subsection 23AG(1) of the ITAA 1936.


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