| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1012938356079
Date of advice: 18 January 2016
Ruling
Subject: Foreign employment income
Question and answer
Is the income you receive while working for the International Organisation assessable under subsection 6-5(2) of the ITAA 1997?
No.
This ruling applies for the following period:
Year ending 30 June 2016
Year ending 30 June 2017
Year ending 30 June 2018
Year ending 30 June 2019
The scheme commenced on:
1 July 2015
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You are an Australian resident for taxation purposes.
You have a position with the International Organisation.
You will work for the International Organisation for a number of years.
You will work overseas.
You will make contributions to the PSS superannuation fund while you are working overseas.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Subsection 6-5(2).
Income Tax Assessment Act 1997 Section 6-15.
Income Tax Assessment Act 1997 Subsection 6-15(2).
Income Tax Assessment Act 1997 Section 6-20.
Reasons for decision
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident will include ordinary income derived from all sources, whether in or out of Australia, during the income year.
However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income then it is not assessable income.
Section 6-20 of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 or another Commonwealth law.
The International Organisations (Privileges and Immunities) Act 1963 (IO(P+I)A) is a Commonwealth law under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities including an exemption from tax.
The Commissioner's guidelines as to the assessability of remuneration derived from International Organisations are dealt with in Taxation Ruling TR 92/14.
Paragraph 12 of TR 92/14 provides that Australia's general policy is that salaries and emoluments received by experts and consultants engaged by international organisations are not exempt from tax in Australia. However, limited exemption is provided under regulations regarding the ADB.
The International Organisation Regulations provides that a person who is performing, whether alone or jointly with other persons, a mission on behalf of the International Organisation has the privileges and immunities specified in paragraphs 2, 2A and 5 of Part I of the Fifth Schedule to the IOPIA.
However, the International Organisation Regulations provides that salary and emoluments received from the International Organisation by a person on whom privileges and immunities are conferred, being a resident of Australia, are not exempt from taxation, to the extent to which they are for services rendered in Australia.
The term 'emoluments' include payments made to an expert in respect of their services which are remunerations, or at least an 'advantage' obtained as a result of giving those services.
In your case, you are a resident of Australia, and you are paid salary and wages for work performed for the International Organisation overseas
You will work for the International Organisation for a number of years.
The payment you receive for work performed for the International Organisation is exempt from tax under the International Organisation Regulations as the payment is an emolument received while performing services for the International Organisation overseas.
Accordingly the payment is not assessable under subsection 6-5(2) of the ITAA 1997 as the payment is exempt under section 6-20 of the ITAA 1997.
The contributions you make to the PSS superannuation fund will not affect the exemption from tax in Australia on the income derived overseas for the period you are working overseas for the International Organisation.