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Edited version of your written advice
Authorisation Number: 1051504427404
Date of advice: 9 April 2019
Ruling
Subject: Assessability of foreign sponsorship
Question
Is the foreign sponsorship money assessable in Australia?
Answer
No.
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
The sponsorship money you receive is not assessable in Australia as the contracts are signed in an overseas country and the race representation is carried out at overseas race meetings.
Accordingly, the sponsorship money is not assessable in Australia.
This ruling applies for the following periods:
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
The scheme commences on:
1 July 2015
Relevant facts and circumstances
You are a non-resident of Australia for taxation purposes.
You are a tax resident of Country Y.
You are a professional sports person.
You receive sponsorship money from overseas entities.
You are required to represent the sponsor’s products.
The sponsorship is paid in foreign currency.
You are expected to represent the sponsors in race events overseas and on social media.
The contracts for the sponsorships are entered into in Country Y.
The contracts do not specify that you carry out any duties in Australia.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1)