Edited version of private advice

Authorisation Number: 5010074559529

Date of advice: 5 May 2021

Ruling

Subject: Exempt international income

Question 1

Will the income you received for services provided to an organisation listed in the Specialized Agencies (Privileges and Immunities) Regulations 1986 be exempt from income tax under section 6-20 of the Income Tax Assessment Act 1997 (ITAA 1997) for the year ended 30 June 20xx?

Answer

Yes. An amount is exempt income under section 6-20 of the ITAA 1997 if it is made exempt from income tax by a provision of either the ITAA 1997 or another Commonwealth law. This includes income made exempt from income tax by the International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) of:

•         International organisations

•         Persons connected with international organisations.

Subsection 6(1) of the IOPI Act and Part I of each of the Second to the Fifth Schedules to the IOPI Act inclusive, set out the taxation exemptions that can be conferred upon certain persons currently connected with an international organisation. This includes persons who either serve on a committee or participate in the work or performing a mission.

Paragraphs 31 to 33 of Tax Ruling TR 2019/D1 Income tax: income of international organisations and persons connected with them that is exempt from income tax (TR 2019/D1) states;

31 Persons who serve on a committee, participate in the work of, or perform a mission on behalf of an international organisation may be exempted from taxation on salaries and emoluments received from the organisation. Whether these persons are entitled to an exemption from taxation of salaries and emoluments has to be determined in accordance with paragraph 16 of this Ruling.

32. Examples of persons serving on a committee or participating in the work or performing a mission include:

•         experts

•         consultants, or

•         other persons engaged by the organisation to perform a specific act or thing.

33. Generally, Australia's approach to persons serving on a committee or participating in the work or performing a mission is that they are exempt from tax in Australia. However, this exemption may be limited or subject to conditions, particularly where the person is rendering the services in Australia and is a resident of Australia for taxation purposes. To the extent that the exemption is limited or subject to conditions in relation to a particular international organisation it will be specified in the regulations for that organisation.

In your case, you worked for XXXX (which is listed as an organisation in the Specialized Agencies (Privileges and Immunities) Regulations 1986 as an agency to which the schedules to the IOPI Act applies) on 'a mission', and consequently your payment or 'emolument' will be exempt from tax.

Salaries or emoluments exempt from Australian tax under the IOPI Act and under section 6-20 of the ITAA 1997 are not taken into account in calculating the Australian tax on other assessable income derived by the person.

Question Two

Specifically, does Part 2A of the Fifth Schedule of the International Organisations (Privileges and Immunities) Act 1963 apply to the income received by you?

Answer

Yes

Privileges and Immunities of a Person serving on Committee or participating in Work of, or performing Mission on behalf of, International Organisation will have exemption from taxation on salaries and emoluments received from the organisation.

This ruling applies for the following period:

1 July XXXX to 30 June XXXX

The scheme commences on:

XXXX

Relevant facts and circumstances

You are a professional who has been contracted to provide technical and operational support in an overseas location, for an international organisation to which the IOPI Act applies.

You provided services between XXXX and XXXX

You travelled and stayed in the overseas location to provide the services during the contractual period.

You are a resident of Australia for tax purposes for the year ended XXXX.

You were a contractor and not an employee in accordance with the contract provided by the international organisation.

Relevant legislative provisions

Income Tax Assessment Act 1997 section6-20

International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) Subsection 6(1)

International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) Fifth Schedule

Regulation 9 of the Specialized Agencies (Priveliges and Immunities) Regulations 1986

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