Private ruling: Foreign employment income
Date of advice: 28 February 2019
Published: May 2019
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022
Date scheme commenced: The scheme has commenced

Ruling: Q1: Is your foreign employment income exempt from taxation in Australia under section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936)? | A1: Yes. Subsection 23AG(1) of the ITAA 1936 provides that foreign earnings are exempt from income tax where all of the following requirements are satisfied: ● you are a resident of Australia and a natural person, ● you are engaged in foreign service, ● the foreign service is for a continuous period of at least 91 days, ● you derive foreign earnings from that foreign service, ● the foreign service is directly attributable to an activity that is listed in subsection 23AG(1AA) of the ITAA 1936, and ● the foreign earnings are not exempt from income tax in the foreign country only because of one of the reasons listed in subsection 23AG(2) of the ITAA 1936. You meet the above criteria and the income referable to your foreign service is exempt from income tax in Australia and thus, not assessable under subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997).

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. You are on deployment to Country X. You will be in Country X for a continuous period of not less than 91 days. You are deployed as a member of a disciplined force by the Commonwealth. Salary and wages of residents and non-residents are generally taxed in Country X. There is no double tax agreement between Australia and Country X. You are subject to a Memorandum of Understanding while you are deployed. You are not an accredited diplomat and therefore have no diplomatic privileges and immunities under the Vienna Convention on Diplomatic Relations 1961 during your posting.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 23AG(1) | Income Tax Assessment Act 1997 subsection 23AG(1AA) | Income Tax Assessment Act 1997 sub-subsection 23AG(1AA)(d) | Income Tax Assessment Act 1997 subsection 23AG(1A) | Income Tax Assessment Act 1997 subsection 23AG(2)