Private ruling: Foreign pension
Date of advice: 3 August 2020
Published: September 2020
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Is your Country Z pension assessable in Australia? | A1: No. The Agreement between Australia and Country Z for the elimination of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion and avoidance in an Article states; a pension paid by, or out of funds created by, a Contracting State or any political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. Therefore, your Country Z pension is not assessable in Australia.

Relevant facts and circumstances: You are a Country Z citizen. You are living in Australia with your spouse. You have a permanent resident visa for Australia. You worked as a teacher in Country Z for approximately many years. Some years ago you took a leave of absence from your position until you recently retired. You were employed as a civil servant of the state. You are receiving a Country Z pension because of your employment as a professional. The pension is being taxed by the Country Z authorities.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(2) | International Tax Agreements Act 1953