| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1011728868001
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: Assessable income - allowances
Question
Are the allowances you received as a volunteer in Country X assessable income in Australia?
Answer
Yes
This ruling applies for the following period
Year ending 30 June 2010
Year ending 30 June 2011
The scheme commenced on
1 July 2009
Relevant facts and circumstances
You recently undertook a six month assignment as a volunteer in Country X.
Your assignment was through an Australian organisation.
You worked with underprivileged children for a not-for-profit organisation.
You were not an employee of the Australian organisation or the Australian government.
You were given allowances for living, accommodation, settlement and dependant support.
These were paid in the 2009-10 and 2010-11 income years.
Relevant legislative provisions
Subsection 6-5(2) of the Income Tax Assessment Act 1997
Section 6-10 of the Income Tax Assessment Act 1997
Section 15-2 of the Income Tax Assessment Act 1997
Reasons for decision
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident for tax purposes includes ordinary income derived directly or indirectly from all sources during the income year.
Section 6-10 of the ITAA 1997 provides that amounts that are not ordinary income but are included in assessable income by another provision are called statutory income and are also included in assessable income.
Section 15-2 of the ITAA 1997 provides that the value of all allowances, gratuities, compensation, benefits etc. given or granted in respect of employment or services rendered are included in assessable income.
Paragraph 2 of Taxation Ruling TR 92/15 states that a payment is an allowance when a person is paid a definite predetermined amount to cover an estimated expense. It is paid regardless of whether the recipient incurs the expected expense. The recipient has the discretion whether or not to expend the allowance.
If a volunteer worker receives an allowance, with no regard to expenses actually incurred and with no requirement to repay unspent monies, the ATO will generally treat the payment as assessable income.
In your case, you recently undertook a six month assignment as a volunteer in Country X working for a not-for-profit organisation. You were given allowances for living, accommodation, settlement and dependant support.
You received allowance payments to cover estimated expenses incurred. The amounts were not paid to reimburse you for expenses you actually incurred.
The amounts are therefore considered allowances under section 15-2 of the ITAA 1997 and therefore included in your assessable income under section 6-10 of the ITAA 1997.