| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051188219053
Date of advice: 8 February 2017
Ruling
Subject: Australian pension
Question
Is your Australian pension assessable to you while you are a foreign resident?
Answer
No.
This ruling applies for the following period
Year ending 30 June 2018
Year ending 30 June 2019
Year ending 30 June 2020
The scheme commenced on
1 July 2017
Relevant facts
You reside in country Y.
You are over X years of age.
You receive Australian pension income.
You are a foreign resident for tax purposes.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
International Tax Agreements Act 1953 Schedule 4 Article 19
Reasons for decision
Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a foreign resident includes the ordinary income derived directly or indirectly from all Australian sources during the income year.
In determining liability to tax on Australian sourced income received by a foreign resident, it is necessary to consider not only the income tax laws but also any applicable tax treaty contained in the International Tax Agreements Act 1953 (the Agreements Act).
Schedule 4 to the Agreements Act contains the tax treaty between Australia and Country Y. The Agreement operates to avoid the double taxation of income received by Australian and Country Y residents.
Subsection 4(1) of the Agreements Act provides that the Agreements Act incorporates the ITAA 1997 and those Acts are read as one. The Agreements Act effectively overrides the ITAA 1997 where there are inconsistent provisions (except for some limited situations that are not relevant in the present case).
Article XX of the Country Y Agreement provides that pensions (including government pensions) and annuities paid to a resident of Country Y are taxable only in Country Y.
As you are a resident of Country Y, your Australian sourced pension income is taxable only in Country Y. Therefore, your Australian pension does not form part of your assessable income and you are not liable to pay tax on your pension in Australia.