Disclaimer
This edited version has been archived due to the length of time since original publication.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.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012817277899

NOTICE

This edited version has been found to be misleading or incorrect. It does not represent the ATO’s view of the relevant law.

This notice must not be taken to imply anything about:

Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.

Ruling

Subject: Income from specialized agencies.

Question and Answer

Is your employment income from the International Organization assessable?

No.

This ruling applies for the following periods

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts and circumstances

You are a resident of Australia for taxation purposes.

You are employed by an international Organization.

Your income is sourced outside Australia.

You have provided a statement of earnings from your employer identifying you as an official of the Organization within the meaning of Article IV of the Convention on the Privileges and Immunities of the Specialized Agencies.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 6-5(2)

Income Tax Assessment Act 1997 Section 6-15

Income Tax Assessment Act 1997 Section 6-20

International Organisations (Privileges and Immunities) Act 1963 Subsection 3(1)

International Organisations (Privileges and Immunities) Act Subsection 5(1)

International Organisations (Privileges and Immunities) Act Part 1 of Fourth Schedule

Specialised Agencies (Privileges and Immunities) Regulations 1986 Regulation 3

Specialised Agencies (Privileges and Immunities) Regulations 1986 Sub-regulation 8(1)

Specialised Agencies (Privileges and Immunities) Regulations 1986 Schedule of Specialized Agencies.

Reasons for decision

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of an Australian resident includes ordinary income derived from all sources, whether in or out of Australia, during the income year.

Income from professional services is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.

However, subsection 6-15(2) of the ITAA 1997 says that if an amount is exempt income then it is not assessable income.

Section 6-20 of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 or another Commonwealth law.

The International Organisations (Privileges and Immunities) Act 1963 (IO (P&I) A) is a Commonwealth law under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities including an exemption from tax.

Subsection 5(1) of the IO (P&I)A provides that the Specialised Agencies (Privileges & Immunities) Regulations 1986 (SA(P&I) Regulations) may declare an organisation to be an organisation to which the IO(P&I)A applies.

Subsection 3(1) of the IO (P&I)A defines the term 'international organisation to which this Act applies' to mean an organisation that is declared by the regulations to be an international organisation to which the IO(P&I)A applies, and includes a body established by such an organisation.

Regulation 3 of the SA (P&I) Regulations says that each Specialized Agency is an international organisation to which the IO(P&I)A applies, the Organisation is an international organisation listed in the schedule to the regulations, therefore the IO(P&I)A applies.

Entitlement to exemption under the IO (P&I) A depends on whether you were engaged as an Independent consultant or as a person who held an office in the Specialized Agency.

You have provided documentation which confirms that you are employed as an official.

Under subregulation 8(1) of the SA(P&I) Regulations a person who holds an office, other than a high office, in a Specialized Agency, has the privileges and immunities specified in Part 1 of the Fourth Schedule to the IO(P&I)A, including income tax exemption on salaries and emoluments received from the organisation. You are entitled to the privileges and immunities specified in Part 1 of the Fourth Schedule to the IO (P&I) A as you have advised that you hold an office in the Specialized Agency.

Accordingly, the income derived by you as holder of an office with the Specialized Agency is not assessable.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).