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Edited version of your written advice
Authorisation Number: 1051360970480
Date of advice: 18 April 2018
Ruling
Subject: Your foreign sourced income is exempt from Australia for tax purposes.
Question
Is the foreign employment income you derive from working in country Y exempt in Australia under section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes.
Having considered your circumstances and the relevant factors, the foreign income derived in country Y are exempt earnings in Australia under subsection 23AG(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The foreign service is directly attributable to an activity that is listed in subsection 23AG(1AA) of the ITAA 1936, and the foreign earnings are not exempt from income tax in the foreign country only because of one of the reasons listed in subsection 23AG(2) of the ITAA 1936.
You were not deployed as a member of an international organisation as defined in the International Organisations (Privileges and Immunities) Act 1963. On your deployment you were neither a member of a diplomatic or consular mission, nor covered by an international agreement that would give rise to any privileges or immunities. Therefore none of the exclusions listing exemptions under subsection 23AG(2) of the ITAA 1936 apply to your foreign earnings.
Accordingly, the salary that you receive from services performed in country Y are exempt from tax under subsection 23AG(1) of the ITAA 1936 and are not assessable income under subsection 6-5(2) of the ITAA 1997.
This ruling applies for the following periods:
1 July 20XX to 30 June 20XX
1 July 20XX to 30 June 20XX
The scheme commences on:
29 January 20XX.
Relevant facts and circumstances
You are currently working as a long term adviser in country Y as part of program Z.
This program is funded by the Australian government via Department A and is part of Australia’s Official Development Assistance Program in country Y.
Program Z is sponsored by Department A and managed by your employer. It has been advised by your employer that the associated income is tax exempt. Other colleagues in similar positions with your employer have had rulings confirming their income is tax exempt.
You are an Australian resident for income tax purposes.
Your contract is for X days.
Your work is part of Australian Official Development assistance in country Y.
Relevant legislative provisions
Income Tax Assessment Act 1936 subsection 23AG(1AA) and 23AG(2)
Income Tax Assessment Act 1997 subsection 6-5(2)