Private ruling: Income v reimbursement
Published: November 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you assessable on the funding for an overseas programme you received? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Section 6-10 | Income Tax Assessment Act 1997 Section 15-2

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary and statutory income derived from all sources during the income year. However, if an amount is exempt income, it is not assessable income (section 6-15 of the ITAA 1997). Under section 15-2 of the ITAA 1997 your assessable income includes the value to you of all allowances, gratuities, compensations, benefits, bonuses and premiums received in respect of your employment, either directly or indirectly. Taxation Ruling TR 92/15 Income tax and fringe benefits tax: the difference between an allowance and a reimbursement , discusses the difference between an allowance and a reimbursement. A payment is an allowance when a person is paid a definite predetermined amount to cover an estimated expense. A payment is a reimbursement when the recipient is compensated exactly, for an expense already incurred although not necessarily disbursed. In your case, an overseas agency has provided you with funding to undertake two projects. Even though you are paid a predetermined amount, you are required to repay any amount not actually spent on undertaking the projects. The payment is considered to be a reimbursement and therefore not assessable income.

Relevant facts: You have received funding for an overseas programme which is a funding program for cultural promotion at foreign universities. | During the relevant financial year, you obtained funding under the program to undertake two projects. | You are required to submit a report justifying their fulfilment of the purpose and the application of the funds received within three months of the conclusion of the project. You are required to repay any amounts not actually incurred. This requirement has been satisfied with all funds fully expended in compliance with requirements. | The funding covers expenses associated with travel, board & lodgings, publication related expenses and other expenses inherent to the production of the cultural project. No provision is made for remuneration of services provided by you.