Edited version of private ruling

Authorisation Number: 1011749616752

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Ruling

Subject: Income - international organisation

Question

Is the income you derive from services provided to an international organisation assessable in Australia?

Answer

No

This ruling applies for the following period

Year ending 30 June 2010

Year ending 30 June 2011

Year ending 30 June 2012

Year ending 30 June 2013

The scheme commenced on

1 July 2009

Relevant facts and circumstances

You are an Australian citizen and resident for income tax purposes.

You have been appointed as a short term consultant to the staff of an international organisation.

Your appointment is for an initial period of one year, and is expected to be renewed.

The period of assignment is expected to be less than 150 days per year.

You will be working in Country X for three to four months, and also in Australia.

You may also work in similar roles in other countries.

The international organisation is listed in the Specialised Agencies (Privileges and Immunities) Regulations 1986 as a specialised agency.

The international organisation provided a letter stating you are an officer of the organisation and exempt from taxation under the International Organisations (Privileges and Immunities) Act 1963 and the Specialised Agencies (Privileges and Immunities) Regulations 1986.

Relevant legislative provisions

Subsection 6-5(2) of the Income Tax Assessment Act 1997

Subsection 6-15(2) of the Income Tax Assessment Act 1997

Subsection 6-20(1) 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 will include ordinary income derived from all sources, whether in or out of Australia, during the income year.

However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income then it is not assessable.

Subsection 6-20(1) of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt by a provision of the ITAA 1997 or the Income Tax Assessment Act 1936 or another Commonwealth law.

The International Organisations (Privileges and Immunities) Act 1963 (IO(P&I)A) is a Commonwealth law under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities including an exemption from tax. Taxation Ruling TR 92/14 discusses taxation privileges and immunities of prescribed international organisations and their staff.

The Specialised Agencies (Privileges and Immunities) Regulations 1986 (SA (P&I) Regs) were made under the IO(P&I)A. Your employer is listed in the SA(P&I) Regs as a specialised agency. A specialised agency is an international organisation to which the IO(P&I)A applies.

Sub Regulation 8(1) of the SA(P&I) Regs confers on officers (other than high officers) of specialised agencies the privileges and immunities specified in Part I of the Fourth Schedule to the IO(P&I)A.

Paragraph 2 of Part 1 of the Fourth Schedule of the IO(P&I)A provides for exemption from taxation on salaries and emoluments received from an international organisation by an officer (other than high officer) of the organisation (paragraph 9 of TR 92/14).

Taxation Determination TD 92/153 discusses who is a 'person who holds an office' as specified in various regulations made under the International Organisations (Privileges and Immunities) Act 1963.

If the international organisation designates a person as one who holds an office in that organisation, in the absence of evidence to the contrary, this designation is sufficient evidence of the status of that person.

As you are considered an officer by the international organisation, paragraph 2 of Part 1 of the Fourth Schedule of the IO(P&I)A provides that you are exempt from tax on salaries and emoluments paid to you by the organisation.

There is nothing in the IO(P&I)A or the regulations which restricts the privileges and immunities afforded to the taxpayer to those circumstances when the taxpayer is performing their duties outside Australia.

Accordingly, the income you receive from the international organisation is exempt income under section 6-20 of the ITAA 1997 and it is not assessable in Australia under subsection 6-5(2) of the ITAA 1997.