Private ruling: Assessable income
Date of advice: 13 March 2026
Published: 29 June 2026
Ruling period: Year ended 30 June 2025
Date scheme commenced: 1 July 2024

Ruling: Q1: Is the dividend distribution from the Country Z liquidator assessable in Australia? | A1: Yes.

Relevant facts and circumstances: You are a resident of Australia for taxation purposes. You are a citizen of Country Z. You entered Australia on a specific visa, which means that you will not be a temporary resident of Australia for taxation purposes. You received a distribution from a Country Z company in the relevant income year. The Country Z company has gone into liquidation. The distribution is not assessable in Country Z. You have supplied us with a copy of the distribution statement from the liquidator.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 44(1) | Income Tax Assessment Act 1997 section 6-10 | Income Tax Assessment Act 1997 section 10-5

Reasons for decision: Detailed Reasoning - Foreign dividend income: Section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a taxpayer's assessable income includes statutory income amounts that are not ordinary income but are included in assessable income by another provision. The assessable income of an Australian resident taxpayer includes statutory income from all sources, whether in or out of Australia (subsection 6-10(4) of the ITAA 1997). Section 10-5 of the ITAA 1997 lists provisions about assessable income. Included in this list is subsection 44(1) of the Income Tax Assessment Act 1936 (ITAA 1936) which deals with dividends. Subsection 44(1) of the ITAA 1936 provides that the assessable income of an Australian resident taxpayer, who is a shareholder of a company (whether the company is a resident or non-resident), includes dividends paid to the taxpayer by the company out of profits derived by it from any source. Therefore, the foreign dividends are included in your assessable income under Australian income tax law. In determining liability to Australian tax on foreign sourced income it is necessary to consider not only the income tax laws, but also any applicable double tax agreement contained in the International Tax Agreements Act 1953 . Double tax agreements operate to avoid double taxation by allocating taxing rights and the claiming of tax credits between the countries party to a particular agreement. The Agreement between the Government of Australia and The Government of Country Z for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income deals with the taxation of dividends received by residents of Australia and Country Z. The Country Z Agreement states that dividends paid by a company which is a resident of Country Z, being dividends to which a resident of Australia is beneficially entitled, may be taxed in Australia. Therefore, the Country Z Agreement does not prevent Australia from taxing the dividends and they are included in your assessable income under subsection 6-10(4) of the ITAA 1997.