Private ruling: Income tax - non-resident
Date of advice: 8 December 2025
Published: 27 January 2026
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: MM 20XX

Ruling: Q1: Is the income you earn in Australia as a consultant medical practitioner assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No. Issue 2 | Q2: Will you be entitled to claim input tax credits for costs incurred in relation to travel and accommodation whilst undertaking your business activities of providing medical services in Australia? | A2: Yes.

Relevant facts and circumstances: You are a resident of Country Y for taxation purposes, maintaining a permanent home in Country Y as your usual place of abode. You have provided locum medical services in Country Y as a contractor through a locum agency. You are not an employee of any medical practice or facility. You provided consultant medical services in Australia on various dates under a contract with Country Y for less than 183 days. You have returned to Country Y following expiration of your contract. You hold an Australian bank account and no other belongings or assets in Australia. You have registered for an Australian business number and for goods and services tax (GST) in Australia. You plan to pursue other short-term opportunities to provide locum services in Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | International Tax Agreements Act 1953 section 4 | A New Tax System (Goods and Services Tax) Act 1999 section 9-27 | A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-15 | A New Tax System (Goods and Services Tax) Act 1999 section 23-5

Reasons for decision: Summary: Based on the information provided, we accept that the income you earned whilst performing medical services in Australia is not assessable under section 6-5 of the ITAA 1997. You worked in Australia for less than 183 days and you do not have a permanent establishment in Australia. In accordance with the relevant treaty with Country Y Treaty, your income is only taxable in Country Y. | Detailed Reasoning - Assessable Income: Section 6-5 of the ITAA 1997 provides that a resident of Australia is assessable on their income from all sources, while a foreign resident is assessable on income that has, or is deemed to have, its source in Australia. Specifically, subsection 6-5(3) of the ITAA 1997 states that the assessable income of a foreign resident includes: a) the ordinary income derived directly or indirectly from all Australian sources during the income year (paragraph 6-5(3)(a) of the ITAA 1997), and b) other ordinary income which is included in assessable income on some basis other than its Australian source (paragraph 6-5(3)(b) of the ITAA 1997). Ordinary income is income according to ordinary concepts which is not specifically defined in the legislation. However, the courts accept that ordinary income generally arises in one of the following ways: • as a reward for rendering personal services (e.g. salary and wages and professional fees), • as profits from carrying on a business, including profits from unusual or isolated business transactions, or • as a return on an investment (e.g. rent, interest and dividends). Income for rendering personal services such as professional fees is ordinary income for the purposes of subsection 6-5(3) of the ITAA 1997. In determining liability to Australian tax on Australian sourced income derived by a foreign resident, it is necessary to consider not only the relevant Income Tax Assessment Act, but also any applicable double tax agreement. Section 4 of the International Tax Agreements Act 1953 (the Agreements Act) incorporates that Act with the Income Tax Assessment Act 1936 (ITAA 1936) and ITAA 1997 so that they are read as one. Subsection 4(2) of the Agreements Act provides that the provisions of the Agreements Act have effect notwithstanding anything inconsistent with those provisions contained in the case of any inconsistency with the provisions contained in ITAA 1936 and ITAA 1997. Under Article 7 of the Treaty with Country Y (the Treaty), the business profits of an enterprise of Country Y are taxable in Country Y unless the enterprise carries on business in Australia through a 'permanent establishment' situated in Australia. The term 'permanent establishment' is defined in Article 5(1) as 'a fixed place of business through which the business of the enterprise is wholly or partly carried on'. The term 'enterprise' under the Treaty applies to the carrying on of any business. Article 3(1)(c) of the Treaty defines the term 'business' to include the performance of professional services and of other activities of an independent character. Article 4(1) of the Treaty provides that the term 'resident of a Contracting State' means any person who, under the laws of that State, is liable to tax as a resident of that State, and also includes that State and any political subdivision or local authority of that State. This term however, does not include any person who is liable to tax in that State in respect only of income from sources in that State. Article 4(2)(a) of the Treaty provides that the individual shall be deemed to be a resident only of the State in which a permanent home is available to that individual; but if a permanent home is available in both States, or in neither of them, that individual shall be deemed to be a resident only of the State with which the individual's personal and economic relations are closer (centre of vital interests). | Detailed Reasoning - Application to your situation: You are an independent contractor providing medical services through a locum agency in Country Y. You provided locum services in Australia for short periods totalling less than 183 days. Your work as an independent contractor is considered business under the Treaty. You do not have a 'permanent establishment' in Australia. In accordance with Article 7 of the Treaty, your income is only taxable in Country Y as you were not carrying on your professional services through a permanent establishment in Australia. Therefore, the income you earned while working as a medical consultant in Australia is not assessable income under section 6-5 of the ITAA 1997. You will need to include the income in your Country Y tax return. | Summary: Since you are registered for GST, you are entitled to claim input tax credits on acquisition made in relation to providing medical services and not reimbursed by the relevant Australian Health Services. | Detailed Reasoning - Detailed reasoning: Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you are required to register for GST if you are carrying on an enterprise and your GST turnover meets the registration turnover threshold. Section 9-27 of the GST Act explains when an enterprise is carried on in Australia by a non-resident. Subsection 9-27(1) of the GST Act provides: An enterprise of an entity is carried on in Australia if: a) the enterprise is carried on by one or more individuals covered by subsection (3) who are in Australia, and b) any of the following applies: i. the enterprise is carried on through a fixed place in Australia, ii. the enterprise has been carried on through one or more places in Australia for more than 183 days in a 12-month period, or iii. the entity intends to carry on the enterprise through one or more places in Australian for more than 183 days in a 12-month period. Subsection 9-27(3) of the GST Act provides the following as individuals: a) if the entity is an individual - that individual, b) an employee or officer of the entity, c) ... | Detailed Reasoning - Input tax credit: You are entitled to claim GST credits if you make any creditable acquisition. Section 11-5 of the GST Act provides that you make a creditable acquisition if: a) you acquire anything solely or partly for a creditable purpose, b) the supply of the thing to you is a taxable supply, c) you provide or are liable to provide consideration for the supply, and d) you are registered or required to be registered. Section 11-15 of the GST Act provides the meaning of creditable purposes. It states that you acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise. However, you do not acquire the thing for a creditable purpose to the extent that the acquisition relates to making supplies that would be input taxed, or the acquisition is of a private or domestic nature. | Detailed Reasoning - Application to your circumstances: You are an individual performing medical services in Australia for less than 183 days in a 12-month period and you do not have a fixed place in Australia. You perform medical services at various hospitals under contract with the relevant Australian Health Services. You intend to work for less than 183 days in a 12-month period in the future. As a non-resident the activities carried out by you do not satisfy subsection 9-27(1) of the GST Act and your supply of medical services in Australia are not considered as made through an enterprise carried on by you in Australia. Hence, you are not required to register for GST under section 23-5 of the GST Act. However, as you have registered for GST, you are liable to pay GST on taxable supplies you make and you are entitled to claim input tax credits for your creditable acquisition. You are entitled to claim input tax credits for travel and accommodation provided the acquisitions satisfy section 11-5 of the GST Act. However, if these acquisitions are made partly for private or domestic purposes, then you are required to apportion the input tax credits available between private and creditable purposes. According to the facts, part of the expenses is reimbursed by the relevant Australian Health Services, and you are not entitled to claim input tax credits for these expenses that are reimbursed. Goods and Services Tax Ruling GSTR 2006/4 Goods and services tax: determining the extent of creditable purpose for claiming input tax credits and for making adjustments for changes in extent of creditable purpose provides guidance on how to determine the extent of your creditable purpose in making acquisitions to enable you to claim the correct amount of input tax credits.