Private ruling: Assessability of pension
Date of advice: 17 March 2016
Published: May 2016
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2012

Ruling: Question and answer | Should your Australian source pension be included in your Australian assessable income? | No.

Relevant facts and circumstances: You are a resident of Country X and are in receipt of an Australian superannuation pension. The payer deducts Australian income tax from the payments it makes to you.

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

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a foreign resident includes the ordinary income derived from all Australian sources during an income year. However, in determining liability to tax on the Australian source income of a foreign resident, it is necessary to consider not only the domestic income tax laws but also any applicable double tax agreement. In accordance with Country X Double Tax Agreement, pensions that are usually taxable in the source country are only taxable in the country of which the taxpayer is a resident. Therefore, as you are a resident of Country X, you are not liable to pay tax on your pension in Australia.