Disclaimer This edited version has been archived due to the length of time since original publication.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 written advice
Authorisation Number: 1012766816086
Ruling
Subject: Assessability of foreign income
Question and answer:
Is the income you earn from employment with a foreign airline assessable in Australia?
No.
This ruling applies for the following period:
1 July 2014 to 30 June 2018.
The scheme commenced on:
1 July 2014.
Relevant facts and circumstances:
You have a four year contract to work with a foreign airline.
The foreign airline is based in a Country A.
You pay tax in Country A from your income from the foreign airline.
You are employed on international flights only.
Relevant legislative provisions:
International Tax Agreements Act 1953 Sections 4 and 5
Reasons for decision
Australia and Country A are parties to a double tax agreement (the DTA)
The DTA is listed in section 5 of the International Tax Agreements Act 1953 (Agreements Act) and consequently has the force of law, subject to the provisions of the Agreements Act.
One of the aims of the DTA is to prevent double taxation of individuals who may, but for the agreement, have a taxation liability in both countries for the same reason.
Article 15 of the DTA deals with the taxing rights of remuneration (such as salary and wages) and states, in paragraph 3:
… remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, shall be taxable only in the Contracting State of which the enterprise is a resident.
You are employed on international flights by an entity based in Country A. Accordingly, and considering the provisions of paragraph 3 of Article 15 of the DTA, the income you earn from that employment will be taxable only in Country A and will not be included in your assessable income in Australia.