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Ruling
Subject: superannuation pension
Question
Is your superannuation pension assessable in Australia?
Answer
No.
This ruling applies for the following periods
Year ending 30 June 2013
Year ending 30 June 2014
Year ending 30 June 2015
Year ending 30 June 2016
Year ending 30 June 2017
The scheme commenced on
1 July 2012
Relevant facts
You retired from your Australian employment a few years ago.
You moved overseas to live. You are a permanent resident in country C.
You receive a pension from Australia.
You are not an Australian resident for taxation purposes.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(3)
Income Tax Assessment Act 1997 Subsection 6-10(5)
International Tax Agreements Act 1953
Reasons for decision
Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a foreign resident includes all the ordinary income derived directly or indirectly from all Australian sources during the income year.
The assessable income of a foreign resident also includes your statutory income from all Australian sources (subsection 6-10(5) of the ITAA 1997).
Pensions are generally included as assessable income.
However, in determining liability to tax on Australian sourced income received by a foreign resident, it is necessary to consider not only the income tax laws but also any applicable double tax agreements contained in the International Tax Agreements Act 1953 (the Agreements Act).
Section 4 of the Agreements Act incorporates that Act with the ITAA 1997 so that those Acts are read as one. Subsection 4(2) of the Agreements Act provides that the Agreements Act overrides the ITAA 1997 where there are inconsistent provisions (apart from Australia's general anti-avoidance rules and certain provisions dealing with limitations of tax credits).
A schedule to the Agreements Act contains the double tax agreement between Australia and country C. The Agreement operates to avoid the double taxation of income received by Australian and country C residents.
The relevant article of the Agreement provides that pensions (including government pensions) and annuities paid to a resident of country C shall be taxable only in country C.
Therefore your pension is not taxable in Australia. That is, you are not liable to Australian income tax on your pension.