Private ruling: Overseas pension
Published: June 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Question and answer | Is any amount of the Country X government pension you received assessable income in Australia? | No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a resident of Australia for taxation purposes. You are a citizen of Country X. You received a Country X government pension.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2).

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. In your case, you are a resident and citizen of Australia in receipt of a Country X government pension. Under subsection 6-5(2) of the ITAA 1997 this income would ordinarily be taxable in Australia. However, the tax treaty between Australia and Country X overrides subsection 6-5(2) of the ITAA 1997 so that if the treaty states that income is exempt from tax in Australia, you do not need to include it in your tax return. In regards to government pensions, the tax treaty states that pensions paid by Country X to a citizen of Country X are exempt from tax in Australia. Therefore, in your case your Country X government pension is not taxable in Australia as it is being paid by Country X and you are a Country X citizen. You do not need to include this income in your Australian tax return.