Edited version of private advice

Authorisation Number: 1051758742874

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: 22 September 2020

Ruling

Subject: International income

Question

Is your foreign employment income whilst posted overseas as a member of a disciplined force in Country A exempt from taxation in Australia under Section 23AG of the Income Tax Assessment Act 1936 during the period attending a course in Australia from Start date to Finish date?

Answer

Yes. The period of service during which you attended the course and remained in Australia, is considered to be a period of continuous service which would be covered by Section 23AG of the Income Tax Assessment Act 1936 as with your other service.

This ruling applies for the following period:

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commenced on:

I July 20XX

Relevant facts and circumstances

You are an Australian resident for tax purposes.

You have been deployed to Country A as a member of a discipline force as a liaison to a local disciplined force.

You attended a course in Australia in the period Start date to Finish Date. This course furthered your understanding of various roles and your core role of assisting the disciplined force in Country A has been greatly enhanced by this understanding.

You completed this course on Finish date but were unable to return to Country A until Autumn 2020 due to Covid pandemic related travel restrictions. During this period, you worked remotely until clearance to return was granted.

As such you will be working in Country A for a period greater than 91 days.

You will not be remaining in Country A following your period of Foreign Service.

Your employer considers your entire posting to Country A as one which is covered by Section 23AG and hence they are do not withhold PAYG during the posting, except for periods longer than 28 days spent in Australia (when your PAYG withholding resumes).

You have supplied a copy of your duty statement, records of attainment from the course, a supporting statement from your current supervisor and email correspondence relating to this course.

You are not liable for tax in Country A as a result of a cooperation agreement with Country A.

Australia has signed a double tax agreement (DTA) with Country A which is called The Agreement between Australia and Country A for the avoidance of Double Taxation and the prevention of Fiscal evasion with respect to taxes on income (The Convention).

Article XX of The Convention provides that salaries, wages, and similar remuneration derived by an individual who is a resident of Australia in respect of an employment can be taxed in Country A in circumstances which include where the employment is exercised in that country for a period or periods exceeding 90 days in a year of income.

Relevant legislative provisions:

Income Tax Assessment Act 1936 Section 23AG

Income Tax Assessment Act 1997 Subsection 6-15(2)

Income Tax Assessment Act 1997 Subsection 6-5(2)