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Edited version of your written advice
Authorisation Number: 1051223181856
NOTICE
This edited version has been found to be misleading or incorrect. It does not represent the ATO’s view of the relevant law.
This notice must not be taken to imply anything about:
● the binding nature of the private advice issued to the applicant
● the correctness of other edited versions.
Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.
Date of advice: 11 May 2017
Ruling
Subject: Assessability of foreign income
Question and answer:
Is the income derived by you as a consultant to the overseas organization, carried out partly in Australia and partly outside Australia, assessable income?
Yes.
This ruling applies for the following periods:
Year ending 30 June 2017
Year ending 30 June 2018
Year ending 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commenced on:
1 July 2016
Relevant facts:
You are an Australian resident for tax purposes.
You have taken up an appointment as a consultant with an overseas organisation.
You will carry out the work for the organisation overseas and in Australia.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Subsection 6-5(2).
Income Tax Assessment Act 1997 Subsection 6-15(2).
Income Tax Assessment Act 1997 Section 6-20.
International Organisation (Privileges and Immunities) Act 1963.
Specialized Agencies (Privileges and Immunities) Regulations 1986.
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.
Income from professional services is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.
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 & 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.
Subparagraph 6(1)(e)(i) of the IO(P&I)A provides that the regulations may confer all or any of the privileges and immunities set out in Part I of the Fifth Schedule of the IO(P&I)A upon a person who serves on a committee, or, participates in the work of, or, performs a mission on behalf of, an international organisation to which this Act applies.
The organisation is listed in the Schedule to the Specialised Agencies (Privileges & Immunities) Regulations 1986 (SA(P&I) Regs). The SA(P&I) Regs are made under section 6 the IO(P&I)A.
Regulation 9 of the SA(P&I) Regs does not provide any income tax exemption for persons serving on a committee or performing a mission (such as independent consultants) for the organisation.
In your case you received income as a result of a contract with the organisation to provide consultancy services. You are not an employee of the organisation.
Therefore, the income you received as a consultant from the organisation for the provision of services carried out in Australia and overseas, is assessable under subsection 6-5(2) of the ITAA 1997.