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Ruling
Subject: Income from foreign sources
Question and answer:
Is your employment income derived overseas exempt from tax in Australia?
Yes.
This ruling applies for the following period:
Year ended 30 June 2013
Year ended 30 June 2012
Year ended 30 June 2011
Year ended 30 June 2010
The scheme commenced on:
1 July 2009
Relevant facts
You are an Australian citizen and resident for taxation purposes.
You have arranged to take a number of years off from your current employment in Australia to work for an overseas organisation.
You are an employee of the organisation.
The organisation is specified as an international organisation to which the International Organisations (Privileges and Immunities) Act 1963 applies
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1).
Income tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 section 6-20
International Organisations (Privileges and Immunities) Act 1963 IO(PI)63
Specialised Agencies (Privileges and Immunities) Regulations 1986
Reasons for decision
Salary received by a person who holds an office in a specified international organisation may be exempt from Australian income tax pursuant to regulations made under the International Organisations (Privileges and Immunities) Act 1963 (IO(P&I)A). Taxation Determination TD 92/153 provides that the phrase 'person who holds an office' in relation to a prescribed international organisation includes those people who work as employees for that organisation. The phrase does not include experts or consultants.
The organisation is specified as an international organisation to which the IO(P&I)A applies (schedule to Specialised Agencies (Privileges and Immunities) Regulations 1986 (Statutory Rule 1986, No. 67)).
The privileges and immunities of officers (other than high officers) of such international organisations are specified in Part 1 of the Fourth Schedule of the IO(P&I)A. Paragraph 2 of Part 1 of the Fourth Schedule (IO(P&I)A) provides that salaries received from the organisation are exempt from taxation in Australia.
Therefore your salary derived overseas is not required to be declared in your Australian tax return.