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This edited version has been archived due to the length of time since original publication.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: 1012814667660

Ruling

Subject: Exempt Employment Income

Question

Is salary paid to you while employed in an Australian school exempt from income tax in Australia?

Answer

Yes

This ruling applies for the following periods:

Year ending 30 June 2015

Year ending 30 June 2016

The scheme commences on:

1 July 2014

Relevant facts and circumstances

You are a resident of a foreign country.

You were qualified to be employed as a teacher prior to coming to Australia.

You arrived in Australia in 2015.

You are employed to work as a teacher for less than 2 years.

You will stay in Australia for a period less than 2 years.

Relevant legislative provisions

Taxation Administration Act 1953 Subsection 12-1(1) of Schedule 1

Agreement between the Commonwealth of Australia and the Foreign Country for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital and to certain other Taxes

Reasons for decision

Article 19(1) of the Agreement between the Commonwealth of Australia and the Foreign Country for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital and to certain other Taxes states that remuneration paid to a resident of the foreign country who visiting Australia for a period not exceeding 2 years for the purpose of teaching in an Australian school should not be taxed in Australia.

To obtain the visiting teacher exemption from Australian income tax, the teacher must satisfy the following requirements:

    • be a teacher in the foreign country or has recently qualified to be employed as a teacher prior to coming to Australia;

    • be a resident of the foreign country;

    • visit Australia for a period not exceeding 2 years;

    • the purpose of the visit is teaching at a university, college school or other educational institution; and

    • the remuneration received must be for the teaching activities.

In your case, you were qualified to be employed as a teacher prior to coming to Australia; you are employed to work as a teacher for less than 2 years; you will stay in Australia for less than 2 years. As a result, the salary paid to you from your employer is exempt from income tax in Australia.

Subsection 12-1(1) of Schedule to the Taxation Administration Act 1953 (TAA 1953) states that there is no requirement to withhold an amount from a payment if the whole of the payment is exempt income of the entity receiving the payment.

Therefore, your employer does not need to withhold tax from your salary.


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