Private ruling: Foreign income - pension
Published: September 2011
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2008

Ruling: Q1: Is your pension received from Country A assessable in Australia? | A1: 


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10 | International Tax Agreements Act 1953

Reasons for decision: Summary: Section 6-5 and section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997), provides that the assessable income of an Australian resident includes ordinary and statutory income they derived directly or indirectly from all sources, whether in or out of Australia during the income year. Pensions have the character of ordinary income. Pension income is assessable in the year of receipt even though it may relate to a past or future income period In determining liability to Australian tax on foreign sourced income received by a resident, it is necessary to consider not only the income tax laws but also any applicable tax treaty contained in the International Tax Agreements Act 1953 (the Agreements Act). The Agreements Act contains the tax treaty between Australia and Country A and the Notes to the agreement (the Country A Convention). The Country A Convention operates to avoid the double taxation of income received by Australian and Country A residents. An article of the Country A Convention provides that pensions (including government pensions) and annuities paid to a resident of Australia shall be taxable only in Australia. In your case, as you are an Australian resident for tax purposes, the pension income that you receive from the Country A is included in your assessable income under section 6-5 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You are an Australian resident for taxation purposes. | You do not hold a temporary visa as you are a permanent resident of Australia. | You receive a pension from Country A.