Private ruling: Income derived from an international organisation
Date of advice: 23 July 2025
Published: 22 September 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is Employer Z an organisation to which the International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) applies for the purposes of subsection 3(2A) of the IOPI Act'? | A1: Yes. | Q2: Does subparagraph 6(1)(d)(i) of the IOPI Act apply such that the remuneration that you derived from Employer Z for the relevant income years is exempt income under section 6-20 of the Income Tax Assessment Act 1997 (ITAA 1997) and is therefore not assessable income under section 6-15 of the ITAA 1997, on the basis that the Applicant is an office holder of Employer Z. | A2: Yes. | Q3: If your contract with Employer Z is extended and her circumstances remain the same for future income years, does subparagraph 6(1)(d)(i) of the IOPI Act apply such that the remuneration that the Applicant derives from Employer Z in those future income years is exempt income under section 6-20 of the ITAA 1997, and therefore not assessable income under section 6-15 of the ITAA 1997, on the basis that the Applicant is an office holder of Employer Z. Answer Yes.

Relevant facts and circumstances: You are a resident of Australia for taxation purposes. You have been engaged by Employer Z as a consultant under a series of contracts. Between each contract, there was a 'break in service' period (Break-In Service Period) - a short transitional phase lasting a number of days. You did not receive any income from Employer Z during these periods. Following each Break-In Service Period, you were consistently re-engaged in the same role. Employer Z's Secretariat is located overseas. The following terms and conditions apply to you under the various contracts: (a) You are engaged as a professional; (b) You are engaged as a consultant; (c) Your administrative duty station is Employer Z's headquarters, but you work remotely from Australia as this your particular agreement with Employer Z; (d) Your remuneration is paid monthly. Payments were not based on production of results or completion of projects; (e) There is no accrual of leave or similar entitlements, but you are entitled to a number of days of paid holidays per year; (f) You are entitled to certified sick leave (i.e. requiring a medical certificate or other evidence to support absence) and health insurance; (g) You are prohibited from working for any other organisations during the period of employment; (h) You are not entitled to receive a pension or superannuation payments; and (i) You are entitled to union membership, which you have taken up and continues to maintain. Your current contract describes the contract as being a 'Regular Consultancy contract'. You are classified as a Level IV consultant. The Terms of Reference (TOR) is the most current TOR. You understand that the terms of the previous versions of the TOR to which the earlier contract refer were substantially similar. You are subject to the terms applicable to regular consultants under the HR Manual. Based on the HR Manual, consultants at this level have roles that correspond to tasks performed by a senior advisor, for example representative assignments, providing authoritative advice on major policies, systems and strategies which are accepted virtually unchanged. You work within a specific area of Employer Z. A key priority of your area is to generate evidence-based insights about specific subjects. Employer Z's program is an international programme and involves: (a) collaboration with governments, UN agencies, NGOs, and the private sector; and (b) providing support to governments. Employer Z has worked towards strengthening approaches to measuring outcomes as part of a global initiative. Elements of the role you carry out formed part of the job description for other roles which pre-dated the establishment of your current role (the current role). The current role was created a few years ago, in response to a strategic evaluation conducted by the Employer Z. Following the creation of the current role, you were approached by Employer Z and recruited for the role. Had you declined the offer to take on the current role, it is your understanding that Employer Z would have had to find another individual to take it on. The current role has been ongoing since your appointment. Given the scope, duties, and responsibilities of your role, it is your understanding that if you were to vacate the role, Employer Z would be required to appoint a replacement to fulfil the duties and responsibilities of the role. Your role is to: (a) provide strategic direction to the initiative and Employer Z's evidence generation agenda more broadly': and (b) collaborate with other teams to provide high-level technical expertise to enhance measurement and evidence generation across priority country offices; and (c) manage a team of specialists. Relevantly, it is stated in the TOR that: The Officer is expected to lead and provide strategic direction to the initiative and Employer Z's evidence generation agenda more broadly. This position will be positioned in a specific area, working under the direction of the Chief of the area, and managing a small team of evidence and measurement specialists. In collaboration with the relevant counterparts, the Officer provides high-level technical expertise to enhance measurement and evidence generation. The Officer is a senior-level specialist, technical advisor and capacity builder. The TOR also sets out your accountability and responsibilities as follows: 1. TECHNICAL LEADERSHIP: Provide overall technical leadership and strategic direction for the initiative, and the corporate evidence generation agenda more broadly. More specifically, manage the budget and donor reporting for the initiative. 2. PEOPLE MANAGEMENT: Manage a team of evidence and measurement specialists to advance the evidence agenda. This includes providing clarity on performance expectations, giving frequent feedback, guiding work planning and holding team members accountable for delivering results. 3. POLICY AND GUIDANCE: Ensure that evidence is appropriately featured in relevant policies and strategies. Develop and/or update guidance, resources and tools for measurement and evidence generation, ensuring that they meet international standards, good practice and is fit-for-purpose. Ensure that the guidance, resources and tools are appropriately rolled out, e.g. communications or training materials, or being communicated at events such as RB-level workshops. 4. CAPACITY BUILDING: Support the team to increase their capacity to advance the evidence agenda. This may be through ensuring that they have necessary skills, resources, know- how, or other enabling factors. As part of a team, provide the necessary capacity building to colleagues. 5. PARTNERSHIPS and COLLABORATION: Support internal and external partnerships to advance measurement and evidence. This includes working in partnership or in collaboration with other area or organisations to advance the evidence generation agenda. Drive the process of engagement international measurement experts, including to develop papers to contribute to Employer Z's learning. The TOR 2024 also specifies that the deliverables at the end of the contract are: Over a duration of several months, the Officer is expected to deliver the following outputs: 1. Team members are enabled to deliver their workplans. 2. The budget is appropriately managed, and donor reporting is prepared to a high quality. 3. A detailed workplan for the team is developed. 4. The development of the methodology to measure averted humanitarian assistance is finalized. 5. The evidence toolkit and training materials are finalized and uploaded. 6. Strong partnerships have been developed within different services. You report to the Chief of the area, including your team. You are the team lead of your team, and you manage and supervise staff, who report to you. Relevantly: (a) Your name and position is included in the organisation chart. (b) You are named on Employer Z's intranet page as the lead for policy, guidance and knowledge management. The staff that you manage include individuals on permanent ongoing contracts. In your role, you also oversee budgets and negotiates and approves contracts with third-party providers (e.g. consulting companies). In the process, you would agree details of the agreement on behalf of Employer Z. You generally pass the contract to an authorised signatory to execute the agreements. Your role requires that you communicate directly with other governments/government entities around the world and other international organisations as a representative of Employer Z. Your communications include decisions and outcomes on behalf of Employer Z. You are involved in the recruitment of staff for your team. This includes identifying resourcing needs and endorsing resourcing needs based on the demands and requirements of the team. You also participate in the recruitment process. For staff that you supervise, you set review periods, completes performance reviews, makes determinations about remuneration. You also have the ability to make recommendations for termination (if required). You do not and cannot engage any other individual to perform any part of your duties. You also do not believe that you would be able to do so under the terms of your contract. You are responsible for cross-team collaboration and leads the development of Employer Z's approach to evidence generation and Employer Z's policy. You are responsible for convening roundtable discussions on evidence generation attended by government officials and international organisations. You are responsible for presenting Employer Z's evidence approaches to government officials, including at Employer Z's executive board meetings. You are responsible for the entire body of work that your team delivered. Given your position as the strategic lead and team lead, you are responsible for correcting any defects in that work in order to meet the deliverables in your employment contract. You establish team objectives, performance metrics, and standards, and is responsible for achieving these goals and work as a project manager to ensure the team meets the set targets. You are not required to personally obtain professional liability insurance for the services that you provide to Employer Z. Your conduct is bound by the rules and regulations and standards of conduct of Employer Z. You pay for internet charges, while Employer Z covers other office expenses and provides the necessary equipment. As part of your work with Employer Z, you are required to carry out your duties in an impartial manner and in accordance with the policies and charter of Employer Z. You understand that the terms and conditions and the duties and responsibilities of your role described above apply to the various contracts, with the only a few differences.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 6-5(2) | Income Tax Assessment Act 1997 subsection 6-15(2) | Income Tax Assessment Act 1997 subsection 6-20 | International Organisations (Privileges and Immunities) Act 1963 subsection 3(2A) | International Organisations (Privileges and Immunities) Act 1963 subsection 6(1) | International Organisations (Privileges and Immunities) Act 1963 Part 1 of the Fourth Schedule

Reasons for decision: Detailed Reasoning - Assessable income: Section 6-5 of the ITAA 1997 provides that the assessable income of an Australian resident includes ordinary income derived directly or indirectly from all sources during the income year. This includes income derived from all overseas sources. However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income. then it is not assessable income. An amount is exempt income under section 6-20 of the ITAA 1997, if it is made exempt from income tax by a provision of either the ITAA 1997 or another Commonwealth law. This includes income received by a person who is connected with an international organisation that is exempted by the IOPI Act. | Detailed Reasoning - Exemption of income under the IOPI Act 1963: Income of tax residents of Australia working for designated international organisations may be exempted from taxation in accordance with the IOPI Act. The application of these benefits to persons performing the work of the Organisation is provided in the Relevant Regulations. The IOPI Act 1963 exempts from taxation certain income of a person connected with an international organisation, to the extent it satisfies all of these elements: • the income is received from an international organisation to which the IOPI Act applies; • the person is connected with the international organisation in one of the specified ways; and • the conditions and other particulars provided in the regulations for the international organisation are satisfied in relation to the income of the person. Subsection 3(1) of the IOPI Act defines the term 'international organisation to which this Act applies' to mean an organisation that is declared by the 'regulations' to be an international organisation to which the IOPI Act applies, and includes a body established by such an organisation. The regulations of Employer Z state that it is an organisation to which the IOPI applies. Subsection 6(1) and Part I of the Second to the Fifth Schedules to the IOPI Act inclusive set out the taxation exemptions that can be conferred upon certain persons currently connected with an international organisation. This includes a person who 'holds an office' in an international organisation (but who is not a holder of a high office) under paragraph 6(1)(d) and Part I of the Fourth Schedule to the IOPI Act. Relevantly, as per item 2 of Part 1 of the Fourth Schedule of the IOPI Act, this includes an exemption from taxation on salaries and emoluments received from the international organisation. A sub-regulation of the regulations states that officers (other than high officers) of Employer Z are entitled to the privileges and immunities specified in items 1 to 7 of Part I of the Fourth Schedule to the IOPI Act. In your case, the payments you received in relation to your engagement with Employer Z will be exempt from income tax if it can be shown that you hold an office (but not a high office) in Employer Z in undertaking your role. The Commissioner's view on the meaning of office holder The Commissioner's view on the meaning of office holder is set out in paragraphs 24 to 34 of Draft Taxation Ruling TR 2024/D2 Income tax: exempt income of international organisations and persons connected with them (TR 2024/D2). In determining who is an office holder, it is not enough to simply be an employee and thereby be regarded as an office holder. An office holder is someone who has identifiable duties, functions, responsibilities or powers to carry out. It does not include an employee who is merely following the command of a higher-ranking person. This does not take away from the fact that an office holder may be an employee; it illustrates however that a person who is an employee is not necessarily or automatically to be taken to be an office holder. As specified in paragraph 26 of the ruling, the term 'office' cannot be defined by reference to permanence or succession. Whether a person holds or performs the duties of an office in an international organisation concerns the relationship between that person and that organisation. Paragraph 27 of TR 2024/D2, states that whether someone is an office holder is a question of fact, considered on a case-by-case basis. There are six criteria for determining whether a person can be said to hold an office in an international organisation: 4 positive criteria: • a position to which certain duties attach - the office must exist within the international organisation regardless of the individual who occupies the office from time to time, that is if an individual vacates that office, the office continues to exist to be filled by another individual • duties relating to the performance of the organisation's functions - the office must have identifiable duties, functions and responsibilities or powers • a level of authority with respect to the organisation • the position of the person within the international organisation, and the duties and authority associated with it, should make it apparent why the privileges and immunities are conferred 2 negative criteria, the presence of which would indicate the person is not an office holder: • the position places the person outside the organisational structure • the position does not provide the person with any defined duties or authority with respect to the organisation and its functions - for example, the role is merely an advisory function. Paragraph 29 of TR 2024/D2 explains an office holder can include a person who works as an employee of the international organisation, but an office holder does not include a person (whether an employee or not) who is: • locally engaged and paid an hourly rate, or • engaged as an expert or consultant. The case law on the meaning of office holder As per South Sydney District Rugby League Football Club Ltd v. News Ltd [2000] FCA 1541 (the South Sydney District Rugby League Football Club Ltd Case), in determining what the nature of a relationship was between two parties it is necessary to look at the form and substance of that relationship. It is not appropriate to adopt the label that one or more parties may have given to the relationship and let that determine what it is. In FCT v. Jayasinghe [2017] HCA 256 (the Jayasinghe Case) it was discussed in paragraphs 31 and 34 that the term 'office' cannot be defined by reference to permanence or succession. Whether a person holds or performs the duties of an office in an international organisation concerns the relationship between the person and that organisation. As per paragraph 37 of the Jayasinghe Case, the phrase 'a person holding an office in an international organisation' directs attention to the structure of the organisation and the place of the person in it. The substance of the terms of the engagement of the person and the relationship between that engagement and the organisation's performing its functions must be considered. Whether someone is an office holder is a question of fact, considered on a case-by-case basis. It should be clear from the duties and authority associated with the person's position within the international organisation why the privileges and immunities are conferred. Paragraph 38 of the Jayasinghe Case outlines that a person is unlikely to be an 'office holder' if their terms of engagement place them outside the organisational structure and do not include defined duties or authority in relation to the organisation and its functions. This is consistent with the purpose of the IOPI Act to confer privileges and immunities to assist organisations to perform their functions, rather than to personally benefit persons connected with the organisation (see paragraph [39] of the Jayasinghe case and paragraph [54] of Macoun v. FCT (2015) 257 CLR 519). In Edwards v. Clinch [1982] AC 845 it was held that an office was a position of authority to which duties and functions are attached; an independent post, with some degree of permanence, to which successive people can be appointed. In Federal Commissioner of Taxation v. Sealy (1987) 19 ATR 582 at 286; 87 ATC 5076, which concerned a managing partner of a grazing partnership, Pincus J said: The word office has a range of meanings. In some contexts, it refers to a position of authority in a governmental or other public organisation. It is difficult to think of any reason why the legislature should have intended to confine the concession to instances in which the terminated position is one of a public character or of any high degree of permanency. Presumably, no one would dispute that the position of managing director of a public company could be regarded as an office. In AAT Case 8603 93 ATC 148; 25 ATR 1082, Deputy President BJ McMahon dealt with the case of a taxpayer who had been an Inspector of Schools and who became (when that position phased out) a Cluster Director. Paragraphs [14] and [15] read as follows: 14. The word "office" is a word that had been considered in many cases, but no satisfactory definition has emerged. As was pointed out in Grealy's case [ Grealy v. Commissioner of Taxation (1989) 24 FCR 405; (1989) 20 ATR 403; (1989) 89 ATC 4192] the word usually connotes a position of defined authority in an organisation, such as a director of a company, or a tertiary education body. Their Honours held (at 4197 column 2) that it was not a word normally applicable to a relatively low-level employee, such as a university lecturer. As the court observed the applicant, like many holders of professional employment, is not made an office holder merely because her position has a name. 15. This view was consistently taken by the Boards of Review. For example, in Case K4, 78 ATC 29 [(1978) 22 CTBR (NS) 212], Mr Dempsey suggested that an office connotes something more than substantial, something more in the nature of a continuing executive position, the holder of which has distinct responsibilities. In Grealy's case itself, their Honours noted that the word "office" usually connoted a position of defined authority. [additional case citations added] Application to your circumstances In your case, the income you have received from Employer Z is from an international organisation to which the IOPI Act applies. | Detailed Reasoning - Office holder: As mentioned above, the payments you received in relation to your engagement with Employer Z will be exempt from income tax if it can be shown that you hold an office (but not a high office) in Employer Z in undertaking your role. You are engaged with Employer Z and are classified as a Level IV consultant for the relevant income years in your contracts. Your role is to: • provide strategic direction to an initiative and Employer Z's evidence generation agenda more broadly': and • collaborate with other teams to provide high-level technical expertise to enhance measurement and evidence generation across priority country offices; and • manage a team of specialists. You are the team lead of your team, and you manage and supervise staff, who report to you. Relevantly: • Your name and position is included in the organisation chart. • You are named on Employer Z's intranet page as the lead for policy, guidance and knowledge management within the area. You oversee budgets and negotiate and approve contracts with third-party providers (e.g. consulting companies). In the process, you agree details of the agreement on behalf of Employer Z. You communicate directly with other governments/government entities around the world and other international organisations as a representative of Employer Z. Your communications include decisions and outcomes on behalf of Employer Z. You are involved in the recruitment of staff for your team. This includes identifying resourcing needs and endorsing resourcing needs based on the demands and requirements of the team. For staff that you supervise, you set review periods, complete performance reviews, make determinations about remuneration. You also have the ability to make recommendations for termination. You establish team objectives, performance metrics, and standards, and is responsible for achieving these goals and work as a project manager to ensure the team meets the set targets. You are responsible for the entire body of work that your team delivers. | Detailed Reasoning - Conclusion: The Commissioner is of the opinion that your work with Employer Z is that of an office holder. This is because: • the position is not short term • executive and managerial responsibilities are central functions of your role as they would be for someone considered to be an office holder • the work includes making recommendations to, or making significant decisions for Employer Z • the position has a sufficient level of authority in the organisation • you have staff reporting to you Therefore, you are an office holder of Employer Z and the income you derive from Employer Z is not assessable as per section 6-15 of the ITAA 1997.