Private ruling: Assessability of income
Published: December 2013
Ruling period: Year ended 30 June 2009 | Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2008

Ruling: Question and answer | Is the income you earn from carrying out professional services work assessable in Australia? | Yes.

Relevant facts and circumstances: You are not a resident of Australia for taxation purposes. You are a resident of country X for taxation purposes. You are employed by a country X company to provide professional services in Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes ordinary income gained from all sources, whether in or out of Australia. However, where you are a foreign resident (non-resident), your assessable income includes only that ordinary income derived from an Australian source. Income earned from employment is ordinary income under section 6-5 of the ITAA 1997. As you are a non-resident of Australia for taxation purposes you are assessable on your ordinary income derived in Australia. The source (derivation) of a taxpayer's income is the place where the services are performed: French v. FC of T (1957) 98 CLR 398. In your case, the income you earn while carrying out professional services has an Australian source as you are physically present in Australia when you carry out your duties. As your employment income is ordinary income and is sourced (derived) in Australia, this income is assessable under section 6-5 of the ITAA 1997 regardless of your non-resident status in Australia.