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Edited version of your written advice
Authorisation Number: 1051226958737
Subject: Temporary residency and assessable income
Questions 1
Are you a temporary resident of Australia?
Answer
Yes.
Question 2
Will you remain a temporary resident until your status changes to a resident for the purpose of the Social Security Act 1991?
Answer
Yes.
Question 3
Is your foreign income assessable in Australia?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015
Year ended 30 June 2016
Year ending 30 June 2017
Year ending 30 June 2018
Year ending 30 June 2019
Year ending 30 June 2020
The scheme commenced on
1 July 2014
Relevant facts and circumstances
You are the holder of a temporary visa.
You are not a resident of Australia within the meaning of the Social Security Act 1991.
Your spouse is not a resident of Australia within the meaning of the Social Security Act 1991.
You receive foreign income.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1997 Section 768-910
Income Tax Assessment Act 1997 Subsection 768-915(1)
Income Tax Assessment Act 1997 Section 768-955
Reasons for decision
Temporary Residency
Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) states that you are a temporary resident if:
a) You hold a temporary visa granted under the Migration Act 1958; and
b) You are not an Australian resident within the meaning of the Social Security Act 1991; and
c) Your spouse is not an Australian resident within the meaning of the Social Security Act 1991.
However, it states that you are not a temporary resident if you have been an Australian resident and any of the above paragraphs are not satisfied after 6 April 2006.
You are the holder of a temporary visa.
You and your spouse are not residents of Australia within the meaning of the Social Security Act 1991.
You will remain a temporary resident of Australia unless your status changes in Australia.
Foreign source income
From 1 July 2006, those taxpayers considered to be temporary residents do not have to pay tax in Australia on most of their foreign income if they:
● are an individual who is an Australian resident for tax purposes, and
● satisfy the requirements of being a temporary resident.
Section 768-910 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that ordinary income derived from a foreign source (excluding remuneration from employment performed overseas and capital gains on shares and rights acquired under employee share schemes) is exempt from income tax in Australia when derived by a temporary resident in Australia.
Therefore, as you are a temporary resident of Australia for taxation purposes, any foreign sourced income you have derived will be exempt from income tax in Australia under section 768-910 of the ITAA 1997.
This income is not required to be declared in your Australian income tax return.