Edited version of private advice

Authorisation Number: 1052364661452

Date of advice: 28 February 2025

Ruling

Subject: Exempt income - international organisation

Question 1

Is the income from your employment with an international organisation exempt under section 6-20 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

Yes.

This ruling applies for the following period:

Year ended 30 June 20xx

The scheme commenced on:

1 July 20xx

Relevant facts and circumstances

You are an Australian resident for tax purposes.

You are employed by an international organisation. Your employment status is as an official of the organisation

You serve as a manager responsible for the management and delivery of a programme.

You have the management of staff members as well as their professional development and the hiring and managing of consultants attached to the programme.

The role is expected to be extended.

You are entitled to all types of leave and benefits only afforded to staff, not contractors.

The staff regulations stipulate your regular office hours of work. You are not free to determine your own hours - they are regular office hours.

You are not free to accept any other engagements, employment opportunities or undertake contract work while in your role.

You performed your duties overseas - in a foreign country.

Relevant legislative provisions

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

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

Income Tax Assessment Act 1997 section 6-20

International Organisations (Privileges and Immunities) Act 1963 subsection 3(1)

Reasons for decision

Summary

Your income is exempt income.

Detailed reasoning

Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident will include ordinary income derived from all sources, whether in or out of Australia, during the income year.

Income from professional services is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.

However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income, then it is not assessable income.

Section 6-20 of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 or another Commonwealth law.

The International Organisations (Privileges & Immunities) Act 1963 (IO(P&I)A) is a Commonwealth law under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities including an exemption from tax.

Subsection 3(1) of the IO(P&I)A defines the term 'international organisation to which this Act applies' to mean an organisation that is declared by the regulations to be an international organisation to which the IO(P&I)A applies and includes:

The organisation you are employed by is an international organisation to which the IO(P&I)A applies. Therefore, your employer is an international organisation to which the IO(P&I)A applies.

Entitlement to exemption under the IO(P&I)A depends on whether you were engaged as an independent consultant or as a person who holds an office in the international organisation.

You have confirmed that you are employed as an official. Your circumstances show that you hold an office in the organisation.

Accordingly, the income derived by you as holder of an office with the international organisation is exempt income and, therefore, not assessable.