Edited version of private advice

Authorisation Number: 1052165803618

Date of advice: 21 September 2023

Ruling

Subject: Assessable income - foreign resident

Question

Is your sole trader income as a Iocum specialist medical practitioner assessable in Australia?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2023

The scheme commenced on:

1 July 2022

Relevant facts and circumstances

You work as a specialist medical practitioner.

You currently reside in a foreign country.

Based on pervious guidance it is determined that you are a tax resident of a foreign country and a non-resident of Australia.

You work in Australia under a special category Visa.

You work in two different roles:

•         As a State Government Temporary employee paid via payroll, and

•         As a sole trader contracted by other hospitals.

You generally work where needed in a public hospital for a couple of weeks at time.

You are in Australia for around 3 months and less than 183 days.

You occasionally received work from an agent.

You are free to use any agent.

You are not an employee of this agent and can choose to utilise them to handle paperwork and invoices for the hospital or handle them yourself.

You are paid either as an employee or sole trader depending on the hospital.

You do not rent any space or consulting rooms when working in Australia as it is not required.

You do not have a large amount of equipment as you are only required to bring a stethoscope and personal protective equipment when working.

You have no permanent establishment in Australia for the purpose of operating a business.

You have provided a 3 week work dairy, an employee payslip and a recipient created tax invoice as a sole trader.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

International Tax Agreements Act 1953

Reasons for decision

Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) operates to make a resident of Australia assessable on their worldwide income, and a non-resident assessable on income, which has, or is deemed to have, its source in Australia.

In determining liability to Australian tax on the basis of residence in Australia it is necessary to consider not only the relevant Income Tax Assessment Act, but also the Convention with the country of resident.

In your case we must consider if you have a residence or a fixed based for a business as per the tax treaty with your country of residences.

It is an established fact that you are not an Australian resident for tax purposes and that you have no base in Australia from where you work from.

Conclusion

You are a non-resident performing independent personal services in Australia, you are in Australia for less than 183 days and you do not have a fixed base available to you.

Under the tax agreement between your country of residences and Australia your business income is not taxable in Australia.