Private ruling: Assessability of salary
Published: June 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Question and answer | Are you required to pay tax on your overseas sourced government income in Australia? | No.

Relevant facts and circumstances: You are a resident and citizen of an overseas country. You work for the Government in your home country. You are working in Australia for the overseas government as part of a government to government bilateral memorandum of understanding. You are paid by your Government. You will be in Australia for a short period.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5. | International Tax Agreements Act 1953 Sch4-Art19.

Reasons for decision: Summary: Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. In determining your liability to pay tax in Australia it is necessary to consider not only the domestic income tax laws but also any applicable double tax agreements (tax treaties). Article 19 of the relevant tax treaty, generally provides that remuneration, including government pensions, paid by the overseas country in respect of government function are only taxable in that country. In your case it is accepted you meet the relevant conditions and your government income is not included in your assessable income in Australia.

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.