Private ruling: Section 23AG - exempt income
Date of advice: 23 April 2024
Published: 3 June 2024
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will your foreign employment income be exempt from income tax in Australia under section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes. Based on the information you have provided your foreign service is directly attributable to deployment outside Australia as a member of a disciplined force by the Commonwealth, a State, or a Territory or an authority of the Commonwealth, a State, or a Territory. The term member includes employees of the Australian Defence Force (ADF), Australian Federal Police (AFP) and the State and Territory police forces that are part of an international peacekeeping force in their capacity as an ADF, AFP or State or Territory police force member (see Taxation Ruling TR 2013/7). Further, your employment income is exempt from taxation in the foreign country for a reason outside of the non-exemption conditions listed in section 23AG(2) of the ITAA 1936. More information on the non-exemption conditions can be found by typing QC 72095 in the search box on www.ato.gov.au.

Relevant facts and circumstances: You are a resident of Australia for taxation purposes. You are a member of an Australian disciplined force. You entered into an employment contract with an international peacekeeping force (Employer). You will serve overseas for a period exceeding 91 days. Your Employer will be responsible for the payment of your salary in accordance with the terms of your contract of employment. You will take unpaid leave from your Australian position while employed with your Employer. Your employment income is exempt from taxation in the foreign country for a reason outside of the non-exemption conditions listed in section 23AG(2) of the ITAA 1936.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-15 | Income Tax Assessment Act 1997 section 6-20 | Income Tax Assessment Act 1936 section 23AG