Edited version of private advice

Authorisation Number: 1052281406886

Date of advice: 26 July 2024

Ruling

Subject: Double tax agreement - exempt income

Question

Will the income you received from the Australian organisation be assessable in Australia under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

No.

To determine your liability to pay tax in Australia it is necessary to consider any applicable double tax agreements. Sections 4 and 5 of the International Tax Agreements Act 1953 (Agreements Act) incorporate that Act with the ITAA 1936 and the ITAA 1997 and provide that the provisions of a double tax agreement have the force of law.

Subsection 4(2) of the Agreements Act deals with possible conflicts by effectively providing that the terms of the DTAs override those of the Assessment Act (except for the general anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936 and Acts imposing Australian tax, in the event of any inconsistency.

As a resident of Country B performing independent personal services in Australia, Article X of the Convention applies to the income you received from the Australian organisation.

Article X of the Convention provides that income from independent personal services in taxable only in your state of residence, unless

•         you are present in Australia for an aggregate period of 183 days or more; or

•         have a fixed base in Australia regularly available to you for the purpose of performing your professional activities.

As you are a resident of Country B who was present in Australia for an aggregate period of less than 183 days in the 2024 income year, and you do not have a fixed base from which to conduct your professional activities, Article X of the Convention provides that the income you received from the Australian organisation is not assessable in Australia under section 6-5 of the ITAA 1997, and shall be taxed only Country B.

This private ruling applies for the following period:

Year ending X June 20XX

The scheme commenced on:

X July 20XX

Relevant facts and circumstances

You are a resident of Country B.

You are not, and have never been, a resident of Australia for taxation purposes.

You were invited by an Australian organisation to travel to Australia to conduct work at an Australian college.

You obtained a temporary work visa to attend Australia.

You were in Australia from X April 20XX to X May 20XX.

You were provided travel and accommodation arrangements that were paid for by the Australian organisation to the airline and hotel directly.

You signed a consultancy agreement in April 20XX for your time in Australia that provided for a stipend.

A total of $X was paid to you in May 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

International Tax Agreements Act 1953section 4

International Tax Agreements Act 1953subsection 4(2)

International Tax Agreements Act 1953section 5