Private ruling: Assessability of salary of a non-resident
Published: May 2012
Ruling period: Year ended 30 June 2011 | Year ending 30 June 2012
Date scheme commenced: 1 July 2010

Ruling: Q1: Is your salary assessable in Australia? | A1: No.

Relevant facts and circumstances: You are not a resident of Australia for tax purposes. You are a resident of Country X. Your employer is an Australian company. You perform all your employment duties in Country X.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(3).

Reasons for decision: Summary: Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) states that if you are not a resident of Australia for tax purposes, your assessable income includes the income you derive from Australian sources. In your case, you are not a resident of Australia for tax purposes. You live and work in Country X, however, your employer is an Australian company. Therefore, your salary is derived from an Australian source. However, under the double tax agreement between Australia and Country X, salary and wages derived by a resident of Country X is only taxable in Country X unless the employment is exercised in Australia. In your case your employment is exercised in Country X and you are a resident of Country X. Therefore, under the double tax agreement, your salary is not taxable in Australia.

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.