ATO ID 2002/1065: Assessable Income - non resident taxpayer in a non Double Tax Agreement country in receipt of Australian sourced pension
Date of decision: 1 November 2002
Year of income: Year ended 30 June 2002
Business line: Small Business/Individual Taxpayers

Issue
Is a non-resident taxpayer's Australian superannuation pension included in their assessable income under section 27H of the Income Tax Assessment Act 1936 (ITAA 1936)?

Decision
Yes. A non-resident taxpayer's Australian superannuation pension will be included in their assessable income under section 27H of the ITAA 1936.

Facts
The taxpayer is not a resident of Australia. They are a resident of a foreign country. Australia does not have a double tax agreement with this foreign country. The taxpayer previously resided and worked in Australia. They are in receipt of an Australian superannuation pension.

Reasons for decision
Summary: Subsections 6-5(3) and 6-10(5) of the Income Tax Assessment Act 1997 provides that the assessable income of a non resident includes both the ordinary and statutory income derived from all Australian sources. Annuities and contributory pensions are specifically made assessable under section 27H of the ITAA 1936. The taxpayer's Australian superannuation pension will be assessable under this section. As the taxpayer is a non-resident the Australian pension will be taxed at non-resident tax rates. In determining whether or not an amount of income received by a non-resident is assessable in Australia, it is necessary to also consider any double tax agreement Australia may have with the country in which the taxpayer resides. However, as the country where the taxpayer is currently residing does not have a double tax agreement with Australia the assessability of Australian sourced income is determined on the basis of Australian domestic law. Therefore, the receipt of an Australian superannuation pension by a non resident taxpayer will be included in their assessable income under section 27H the ITAA 1936.

Legislative references: Income Tax Assessment Act 1997 subsection 6-10(3) subsection 6-10(5)
Related ATO interpretative decisions: ATO ID 2002/1064
Subject references: Assessable income Double tax agreements Non resident individuals Superannuation pension income Resident/residency