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Edited version of your private ruling
Authorisation Number: 1012506660019
Ruling
Subject: Foreign income
Question and answer
Is the income you will earn from trading foreign exchange assessable in Australia?
Yes.
This ruling applies for the following periods:
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 2013
Relevant facts and circumstances
You are a resident of Australia for taxation purposes.
You are also a temporary resident.
You have a temporary visa.
You intend on carrying on a business of trading foreign exchange via an overseas broker.
You will be physically present in Australia when you commence your trading activities and throughout the duration of the trading activities.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia.
As you are a resident of Australia for taxation purposes you are assessable on all of your income both in and outside Australia under section 6-5 of the ITAA 1997.
However, as from 1 July 2006, temporary residents will not have to pay tax in Australia on most of their foreign sourced income if they:
· are an individual who is a resident of Australia for tax purposes, and
· satisfy the requirements of being a temporary resident.
The source of a taxpayer's income is the place where the services are performed: French v. FC of T (1957) 98 CLR 398.
In your case, the income from trading will have an Australian source as you will be physically present in Australia when you are trading foreign exchange. You will make the decisions as to what to trade and when you make them you will be present in Australia. Therefore, your income from these trades will be sourced in Australia regardless of whether you are trading using an overseas broker. As the income will be sourced in Australia, it will not be foreign income and will not be excluded from the assessable income of a temporary resident. Accordingly, it will be assessable under section 6-5 of the ITAA 1997.