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




Reasons for decision: Detailed Reasoning - Remuneration from specific international organisation: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident taxpayer includes all ordinary income derived directly or indirectly from all sources, whether in or out of Australia. Under subsection 6-15(2) of the ITAA 1997 income that is expressly made exempt from income tax by a provision of the ITAA 1997 is not included in assessable income. Subsection 6-20(1) of the ITAA 1997 provides that income will be exempt if it is made exempt from income tax by another Commonwealth law. A person engaged by an International Organisation, may be accorded privileges and immunities in the nature of exemption from taxation under the International Organisations (Privileges and Immunities) Act 1963 (IO(P+I)A). A person who holds an office (other than a high office) in a prescribed organisation may be exempt from income tax under subparagraph 6(1)(d)(i); Pt 1 of the Fourth Schedule to the IO(P+I)A. The Department of Foreign Affairs and Trade, who administer the IO(P+I)A and the associated regulations, take the view that the phrase 'person who holds an office' in relation to a prescribed international organisation covers those who work as employees for that organisation. As you were an official of a particular international organisation within the meaning of Article VI Schedule 19(b) of the Convention of the Privileges and Immunities of the Specialized Agencies, it is accepted that you are an office holder with that organisation. Paragraph 2 of Part 1 of the Fourth Schedule of the IO(P+I)A provides an exemption from taxation on salaries and emoluments received from the organisation. However, this paragraph does not have any application to your specific international organisation unless an enabling regulation has been made. Such regulation can be found in the Specialized Agencies (Privileges and Immunities) Regulations (the regulations). Sub-regulation 8(1) of the regulations entitles a person who holds an office in a Specialized Agency to the privileges and immunities specified in Part 1 of the Fourth Schedule of the Act. Therefore, as you are an office holder with a specific international organisation, the income you receive from your employment with this organisation is exempt from income tax in Australia. | Detailed Reasoning - Disclaimer: You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you or to someone acting on your behalf. The Register of private binding rulings is a public record of private rulings issued by the ATO. The register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.

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: Is the income you derive from a specific international organisation in Country A exempt from tax in Australia? | Relevant facts: You are an Australian resident for income tax purposes. | You were engaged to provide the services of an officer for a specific international organisation within the terms of a specific agreement you entered into - some time in the 2010-11 income year. | The agreement specifies the services of the officer are to be performed in Country A. | The duration of the agreement is for a certain amount of months from commencement. The agreement has provision where the arrangement can be terminated at an earlier date; there is no provision for extension.