ATO ID 2007/22: Assessability of an allocated pension from an Australian superannuation fund received by a Sri Lankan resident
Date of decision: 4 January 2007
Year of income: Year ended 30 June 2005 Year ended 30 June 2006
Business line: Public Groups and International

Issue
Is an allocated pension paid by an Australian superannuation fund to a Sri Lankan resident assessable under subsection 6-10(5) of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision
No. An allocated pension paid by an Australian superannuation fund to a Sri Lankan resident is not assessable under subsection 6-10(5) of the ITAA 1997.

Facts
The taxpayer is a Sri Lankan resident and is not an Australian resident. The taxpayer received an allocated pension from an Australian superannuation fund.

Reasons for decision
Summary: Subsection 6-10(5) of the ITAA 1997 provides that a foreign resident taxpayer's assessable income includes statutory income from all Australian sources and other statutory income included by a provision on a basis other than having an Australian source. Section 27H of the Income Tax Assessment Act 1936 (ITAA 1936) includes annuities and superannuation pensions as assessable income. In determining liability to tax on Australian sourced income received by a non resident, it is necessary to consider any applicable tax treaty contained in the International Tax Agreements Act 1953 (Agreements Act). Section 4 of the Agreements Act incorporates that Act with the ITAA 1936 and ITAA 1997 so that those Acts are read as one. Schedule 31 to the Agreements Act contains the double tax agreement between Australia and Democratic Socialist Republic of Sri Lanka (the Sri Lankan Agreement). Article 18 of the Sri Lankan Agreement deals with pensions and annuities. Article 18(1) of the Sri Lankan Agreement provides that pensions paid to a Sri Lankan resident is taxable only in Sri Lanka. The taxpayer is a resident of Sri Lanka and is not an Australian resident. Accordingly, the allocated pension received from an Australian superannuation fund is taxable only in Sri Lanka.

Legislative references: Income Tax Assessment Act 1936 section 27H
Related ATO interpretative decisions: ATO ID 2002/501
Subject references: Double tax agreements International CoE Non resident individuals Superannuation pensions Sri Lanka