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Edited version of private advice
Authorisation Number: 1051535414211
Date of advice: 5 July 2019
Ruling
Subject: Foreign employment income
Question
Is the salary and allowances you received for the period of your deployment to a foreign country as a member of a disciplined force exempt from tax in Australia?
Answer
Yes
You are an Australian resident for income tax purposes. You derived salary and allowances from your foreign service in the foreign country. Your foreign service was for a continuous period of not less than 91 days. You were deployed outside Australia as a member of a disciplined force.
The salary and allowances you derived from your foreign service were exempt in the foreign country. The salary is not exempt because of a Double Tax Agreement, the laws of the foreign country provide for the imposition of income tax on income derived in the capacity of an employee or from personal services, and do not exempt employment income in general from income tax.
The diplomatic or consular privileges or immunities of persons connected with international organisations do not apply to employees deployed to the foreign country.
Therefore the salary and allowances you received for the period of your deployment is exempt from tax in Australia under section 23AG of the ITAA 1936.
This ruling applies for the following periods
Income year ended 30 June 2017
The scheme commenced on
1 July 2016
Relevant facts
You are an Australian resident for income tax purposes.
You are member of a disciplined force.
You were deployed by the disciplined force to a foreign country. You commenced and ceased in this role during the income year of the ruling.
You were paid salary and allowances for your foreign service.
You were deployed to a foreign country for a continuous period of not less than 91 days.
There is no double tax agreement between Australia and a foreign country.
The taxation laws of a foreign country provide for the imposition of income tax on employment income and do not generally exempt such income from income tax.
The diplomatic or consular privileges or immunities of persons connected with international organisations do not apply to your deployment.
Relevant legislative provisions
Section 23AD Income Tax Assessment Act 1936
Section 23AG Income Tax Assessment Act 1936
Section 6-5 Income Tax Assessment Act 1997
Section 11-15 Income Tax Assessment Act 1997
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