Private ruling: Taxation of foreign income
Date of advice: 20 June 2019
Published: August 2019
Ruling period: Year ending 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022 | Year ending 30 June 2023
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the income that you earned from foreign employment as a professional with Employer Z assessable in Australia? | A1: No. It is not assessable in Australia under Subsection 6-5(2) of the Income Tax Assessment Act 1997 . The Country Y Agreement operates to avoid the double taxation of income received by residents of Australia and Country Y. The Country Y Agreement states at Article 15, paragraph 3: Notwithstanding the provisions of paragraphs (1) and (2), remuneration derived in respect of an employment exercise aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, shall be taxable only in the Contracting State of which the enterprise is a resident. The income derived from your employment in Country Y as a professional on international operations, is "derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a contracting state in international traffic" and, consequently, is exempt from tax in Australia under article 15(3) of the Country Y Agreement.

Relevant facts and circumstances: You are a resident of Australia for taxation purposes. You intend to remain in Australia and continue to be an Australian resident. You are not a resident of Country Y. You are a professional with Employer Z in Country Y. You currently operate internationally. You have a contract that ends in 2022.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2) | International Tax Agreements Act 1953 Section 4 | International Tax Agreements Act 1953 Section 5 | Income Tax Assessment Act 1936