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Edited version of private advice
Authorisation Number: 1051641529174
Date of advice: 31 March 2020
Ruling
Subject: Assessable income
Question
Is the income earned from Organisation Z eligible for a tax exemption?
Answer
No.
This ruling applies for the following period:
Year ended 30 June XXXX
The scheme commences on:
1 July XXXX
Relevant facts and circumstances
You are a resident of Australia.
You were employed by Organisation Z from late 20XX to mid 20XX.
You worked remotely from City Z during your first few weeks with the organisation before relocating to Country Y.
You started working overseas on late 20XX.
You stayed in a hotel for your first week overseas and then moved into other accommodation under a lease.
You had some logistical concerns which you raised with the directors of Organisation Z.
You returned to Australia in late 20XX.
You worked remotely from this point in time during which you negotiate a new contract.
The new contract was signed in early 20XX which stipulated that you could work remotely from City Z.
Payslips supplied to you while working under the first contract label you as an International employee while the payslips under the second contract label you as an Australia based employee.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(1)
Income Tax Assessment Act 1997 Subsection 6-5(2)
Reasons for decision
Subsection 6-5(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that your assessable income includes income according to ordinary concepts, which is called ordinary income. Further subsection 6-5(2) of the ITAA 1997 states the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year.
In your case, you are a resident of Australia working for an international organisation under a standard contract, and as such, the income derived is ordinary income which is assessable under subsection 6-5(1) of the ITAA 1997. Based on your circumstances, there is no exemption and the income you derive from your work is assessable.