| Disclaimer This edited version has been archived due to the length of time since original publication.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 private ruling
Authorisation Number: 1011693477474
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Australian Sourced Pension - Non Resident
Question
Is my super pension assessable in Australia?
Answer
No.
Subsection 6-10(5) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a foreign residents assessable income includes statutory income from all Australian sources and other statutory income included by a provision on a basis other than having an Australian source. An Australian sourced pension is statutory income for the purposes of subsection 6-10(5) of the ITAA 1997.
In determining liability to tax on Australian sourced income received by a foreign taxpayer, it is necessary to consider not only the income tax laws but also any applicable tax treaty contained in the International Tax Agreements Act 1953 (Agreements Act).
Schedule 1 to the Agreements Act contains the double tax convention and notes between Australia and the country X. The agreement operates to avoid the double taxation of income received by Australian and country x residents.
Article 17 of the agreement deals with pensions and annuities. Article 17(1) of the agreement provides that pensions, including government pensions, paid to a resident of country X shall be taxable only in country X.
Accordingly, where a super pension is paid to a foreign resident of Australia and who is also a resident of country X, the pension is not assessable income in Australia as country X has the sole taxing right on the income under Article 17 of the agreement.
Additional Note: This does not form part of the ruling
Your ruling application included a question that related to the responsibilities of your current pension fund. You were advised that we are unable to answer this question however ATO Interpretive Decision 2002/203 does deal with Australian sourced pensions that are exempt from tax in Australia.
Section 12-80 of Schedule 1 to the TAA 1953 provides that a payer is to withhold PAYG tax from superannuation pension payments made to an individual.
However, subsection 12-1(1) of Schedule 1 to the TAA 1953 provides that PAYG tax need not be withheld if a payment is exempt income in the hands of the person receiving the payment.
The taxpayer's pension is exempt from income tax in Australia and therefore PAYG tax will not need to be withheld from the pension under section 12-80 of Schedule 1 to the TAA 1953.