| Disclaimer This edited version has been archived due to the length of time since original publication.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 your private ruling
Authorisation Number: 1012542035425
Ruling
Subject: Foreign salary - 23AG
Question 1
Are the salary and allowances you earned while employed overseas exempt from income tax in Australia?
Answer
Yes.
This ruling applies for the following periods:
Year ending 30 June 2012
Year ending 30 June 2013
The scheme commences on:
1 July 2011
Relevant facts and circumstances
You are an Australian resident for income tax purposes.
Your foreign service is directly attributable to the delivery of Australian official development assistance by your employer.
You have been engaged in foreign employment for more than 91 continuous days.
There is an agreement between Australia and the overseas country that exempts the income from taxation in the overseas country.
There is no taxation treaty between the Australian Government and the overseas country.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 23AG
Income Tax Assessment Act 1936 Section 23AG(1)
Income Tax Assessment Act 1936 Section 23AG(1AA)
Income Tax Assessment Act 1936 Section 23AG(2)
Reasons for decision
Subsection 23AG(1) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that foreign earnings are exempt from income tax where all of the following requirements are satisfied:
· you are a resident of Australia and a natural person,
· you are engaged in foreign service,
· the foreign service is for a continuous period of at least 91 days,
· you derive foreign earnings from that foreign service,
· the foreign service is directly attributable to an activity that is listed in subsection 23AG(1AA) of the ITAA 1936, and
· the foreign earnings are not exempt from income tax in the foreign country only because of one of the reasons listed in subsection 23AG(2) of the ITAA 1936.
Given a consideration of the whole arrangement, it is accepted that you meet the above criteria and the income referable to your foreign service is exempt from income tax in Australia.