Private ruling: Superannuation fund for foreign residents
Published: April 2013

Ruling: A1: Yes. The foreign entity is a superannuation fund for foreign residents for the purposes of section 118-520 of the ITAA 1997. Decision The requirements of paragraph 128B(3)(jb) of the Income Tax Assessment Act 1936 (ITAA 1936) have been satisfied. Therefore, section 128B does not impose WHT on the payment of interest or dividends by a resident to the foreign entity. Facts The fund and foreign corporation are 'non-residents' as defined in subsection 6(1) of the ITAA 1936. The foreign corporation is the operator of the superannuation fund (the fund). The fund was established in the taxpayer's country of residence and is a superannuation fund for foreign residents under section 118-520 of the ITAA 1997 and a 'foreign superannuation fund' under the definition of that term in subsection 995-1(1) of the ITAA 1997. In its capacity as operator of the fund, the foreign corporation derived income the consisting of dividends and interest paid by Australian resident companies. The income derived by the foreign corporation is income to which paragraph 128B(3)(jb) of the ITAA 1936 applies.



Reasons for decision: Summary: The foreign corporation is an instrument of the foreign government by which it exercises its governmental functions and is thereby, a part of the foreign government. The income is derived by the foreign government in its capacity as the operator of the superannuation fund. Therefore, the superannuation fund derives the income in accordance with subparagraph 128B(3)(jb)(i) of the ITAA 1936.

Issue: Is the foreign entity a superannuation fund for foreign residents for the purposes of section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997)?