Private ruling: Assessability of income
Published: June 2012
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2010

Ruling: A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5

Reasons for decision: Summary: Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a foreign resident taxpayer or a non resident taxpayer includes the ordinary income derived directly or indirectly from all Australian sources during the income year. A non resident is a person who is not a resident of Australia for the purposes of the Income Tax assessment Act 1936. | Detailed Reasoning - Working on board a vessel in Australian waters: Subsection 6-5(3) of the ITAA 1997 provides that the assessable income of a foreign resident for the income year includes ordinary income derived directly or indirectly from all Australian sources. Salary and wages are ordinary income under subsection 6-5(3) of the ITAA 1997. The source of remuneration for services rendered will depend on the facts of each case. However, the source is generally the place where those services are performed. As you perform employment duties in Australia and receive ordinary income as remuneration for these, that remuneration would be assessable under subsection 6-5(3) of the ITAA 1997. Accordingly, your remuneration derived from employment exercised aboard a ship operated by an Australian entity is assessable in Australia under subsection 6-5(3) of the ITAA 1997. As you are a non resident of Australia you will be taxed on this income at non resident rates.

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. | Question and answer: Is the income you receive when working in Australian waters and paid by an Australian company assessable in Australia? | Relevant facts: You are a resident of Country X. | You live in Country X permanently with your wife and children. | You receive the following income: | Wages from your employment with an Australian owned company aboard oil and gas vessels in Australian waters. You are employed as a permanent employee under your employment agreement.