Edited version of private advice

Authorisation Number: 1052343307488

Date of advice: 17 December 2024

Ruling

Subject: Exempt income - international organisation

Question 1

Are the payments you receive for services performed as a short-term consultant for the international organisation exempt from income tax under the International Organisations (Privileges and Immunities) Act 1963 (IOPI Act)?

Answer 1

Yes.

The IOPI Act exempts the income of a person connected with an international organisation from income tax where all of the following are satisfied and to the extent they are satisfied:

•                     the income is received from an international organisation to which the IOPI Act applies

•                     the person is connected with the international organisation in one of the specified ways, and

•                     the Regulations for the organisation provide an exemption for the income of a person connected with the organisation in that way, and the conditions and other particulars provided in relation to the exemption are satisfied (see Taxation Ruling TR 2024/D2 Income tax: exempt income of international organisations and persons connected with them (TR 2024/D2)).

The Regulations of the organisation you have contracted with state that the organisation is an organisation to which the IOPI Act applies.

The Regulations provide that a person who is performing, whether alone or jointly with other persons, a temporary mission on behalf of the organisation will be exempt from taxation on salaries and emoluments received from the organisation.

TR 2024/D2 explains that a person performing a mission on behalf of an international organisation requires the person to represent the organisation to someone else. This connotates some interaction between the international organisation and someone else where the person acts on behalf of the organisation representing it in an official capacity, even if that is only temporarily.

In your case, you are undertaking two temporary missions as a short-term consultant with the organisation. Therefore, the income you derive from the contracts is exempt from income tax under the IOPI Act.

This ruling applies for the following periods:

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are an Australian resident for tax purposes.

You are being engaged by an international organisation to work on two projects under separate contracts.

In these roles, you will be working with the international organisation directly with their external clients in the form of the relevant entities. As part of the projects you will be liaising directly with and providing support and guidance to these external clients.

Although there is a possibility of working overseas in relation to the projects, it is your understanding that you will completing your work activities in Australia.

Contract 1

You signed a letter of appointment with the organisation as a short-term consultant.

You will provide advisory support on establishing and enhancing particular skills development frameworks, including a focus on education systems.

Under the contract, your services are expected to be required for about 30 days over a period of less than 12 months. Your appointment will terminate accordingly unless it is extended, or a new appointment made.

During the assignment, you may hold concurrent assignments from other public and private employers, subject to certain exclusions.

Contract 2

You have verbally agreed to enter into a second contract, also as a short-term consultant.

For this contract, you will be providing support as an expert to the organisation as part of their program relating to a foreign country.

You estimate that the number of days work on the project will be somewhere from 20 to 40 days with an expectation that it will run for less than 12 months.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 6-20

International Organisations (Privileges and Immunities) Act 1963