Private ruling: Exemption from income tax and withholding tax
Published: April 2012
Date scheme commenced: 1 January 2012

Ruling: Financial year ending 30 June 2012 | Financial year ending 30 June 2013 | Financial year ending 30 June 2014 | Financial year ending 30 June 2015 | Financial year ending 30 June 2016 | Financial year ending 30 June 2017

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The applicant has applied for a private ruling for the superannuation fund for foreign residents. The application includes the following documentation: A brochure providing information relating to the entity and its activities and objectives. Income Tax Assessment Act 1936 Paragraph 128B(3)(a) Income Tax Assessment Act 1936 Paragraph 128B(3)(jb). Income Tax Assessment Act 1936 Section 128D. Income Tax Assessment Act 1997 Section 118-520. While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Paragraph 128B(3)(jb) of the ITAA 1936 excludes interest and dividend income from withholding tax where that income: (i) is derived by a non-resident that is a superannuation fund for foreign residents; and (ii) consists of interest, or consists of dividends or non-share dividends paid by a company that is a resident; and (iii) is exempt from income tax in the country in which the non-resident resides; For the financial years ended 30 June 2008 and onwards, the term 'superannuation fund for foreign residents' is defined in section 118-520 of the Income Tax Assessment Act 1997 (ITAA 1997) as follows: 118-520(1) A fund is a superannuation fund for foreign residents at a time if: (a) at that time, it is: (i) an indefinitely continuing fund; and (ii) a provident, benefit, superannuation fund or retirement fund; and (b) it was established in a foreign country; and (c) it was established, and is maintained at that time, only to provide benefits for individuals who are not Australian residents; and (d) at that time, its central management and control is carried on outside Australia by entities none of whom is an Australian resident. 118-520(2) However, a fund is not a superannuation fund for foreign residents if: (a) an amount paid to the fund or set aside for the fund has been or can be deducted under this Act; or (b) a tax offset has been allowed or is allowable for such an amount. The overseas based superannuation fund (the fund) is not a superannuation fund for foreign residents because the fund is established for the benefit of the whole general public. As the fund is not a superannuation fund for foreign residents, interest and/or dividend income of the fund is subject to withholding tax under section 128B of the ITAA 1936. Section 128D of the ITAA 1936 provides that interest and/or dividend income that is excluded from withholding tax pursuant to paragraph 128B(3)(jb) of the ITAA 1936 is not assessable income. However, in this instance, as the fund is subject to withholding tax on the interest and/or dividend income derived from Australia, section 128D of the ITAA 1936 has no application and the interest and/or dividend income constitutes assessable income of the fund.



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.