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Edited version of private advice
Authorisation Number: 1051532538507
Date of advice: 20 June 2019
Ruling
Subject: Taxation of foreign income
Question
Is the income that you earned from foreign employment as a professional with Employer Z assessable in Australia?
Answer
No. It is not assessable in Australia under Subsection 6-5(2) of the Income Tax Assessment Act 1997. The Country Y Agreement operates to avoid the double taxation of income received by residents of Australia and Country Y.
The Country Y Agreement states at Article 15, paragraph 3:
Notwithstanding the provisions of paragraphs (1) and (2), remuneration derived in respect of an employment exercise aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, shall be taxable only in the Contracting State of which the enterprise is a resident.
The income derived from your employment in Country Y as a professional on international operations, is "derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a contracting state in international traffic" and, consequently, is exempt from tax in Australia under article 15(3) of the Country Y Agreement.
This ruling applies for the following period:
Year ending 30 June 2020
Year ending 30 June 2021
Year ending 30 June 2022
Year ending 30 June 2023
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
You intend to remain in Australia and continue to be an Australian resident.
You are not a resident of Country Y.
You are a professional with Employer Z in Country Y.
You currently operate internationally.
You have a contract that ends in 2022.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(2)
International Tax Agreements Act 1953 Section 4
International Tax Agreements Act 1953 Section 5
Income Tax Assessment Act 1936
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