• Legal database
Legal database
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This edited version has been archived due to the length of time since original publication.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 private advice

Authorisation Number: 1012640024482

Ruling

Subject: Foreign employment income

Question and answer

Are the salary and allowances you earned while employed overseas exempt from income tax 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 an Australian resident for income tax purposes.

You are deployed to an overseas country as an advisor with your employer.

Your role is to provide Overseas Development Assistance (ODA).

You will be engaged in foreign employment for more than 91 continuous days and earning foreign earnings.

The overseas country normally taxes salary and wage income.

There is not a taxation treaty between the Australian Government and the overseas country.

Relevant legislative provisions:

Income Tax Assessment Act 1936 Section 23AG

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

    • 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.

In your case, your foreign service is directly attributable to an activity listed in subsection 23AG(1AA) of the ITAA 1936 as your role is to provide ODA.

Given a consideration of the whole arrangement, you meet the above criteria and the income referable to your foreign service is not Australia.


Back to top