Private ruling: Assessable income
Date of advice: 21 September 2015
Published: September 2015
Ruling period: 1 July 2015 to 30 June 2016.
Date scheme commenced: 1 July 2015.

Ruling: Question and answer: | Is the income you receive from consulting work performed outside Australia for an International Organisation included in your assessable income in Australia? | No.

Relevant facts and circumstances: You are a resident of Australia for taxation purposes. You have been engaged to work as a consultant for an international organisation. You are an expert performing a mission for the international organisation. You will do some of the consulting work in Australia and some overseas. You will be paid for the consulting work.

Relevant legislative provisions: Income Tax Assessment Act 1997 • Subsection 6-5(2) | • Subsection 6-15(2) | • Section 6-20 | International Organisations (Privileges and Immunities Act) 1963 • Section 3 | • Subparagraph 6(1)(e) | • Paragraph 2A of Part 1 of Schedule 5

Reasons for decision: Summary: Generally, the assessable income of an Australian resident taxpayer includes all the ordinary income they derive from all sources, in or out of Australia, during the income year. Income from consultancy services is ordinary income. In some cases, the tax law or another Commonwealth law may operate to exempt an amount of ordinary income from being assessable in Australia. The International Organisation (Privileges and Immunities) Act 1963 (IOPIA) is a Commonwealth Act under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities, including an exemption from taxation. The IOPIA applies to the international organisation. Paragraph 6(1)(e) of the IOPIA provides that the regulations may confer any or all of the privileges and immunities set out in Part I of the Fifth Schedule of the IOPIA upon a person who is performing a mission on behalf of an international organisation. Paragraph 2A of Part I of the Fifth Schedule to the IOPIA provides an exemption from taxation on salary and emoluments received from an international organisation. There are specific regulations that apply to the international organisation you have been engaged by. These regulations provide: • that a person who is performing a mission on behalf of the international organisation has the privileges and immunities specified in paragraph 2A of Part I of the Fifth Schedule to the IOPIA, and • that the exemption from taxation provided by the regulations does not apply to payments for services rendered in Australia by individuals who are residents of Australia for taxation purposes. | Detailed Reasoning - Conclusion: As an expert performing a mission for the International organisation who is also a resident of Australia for taxation purposes: • Payments you receive for services rendered outside Australia in respect of that mission are not assessable in Australia and you can exclude those payments from your assessable income in Australia. • Payments you receive for services rendered within Australia in respect of that mission are included in your assessable income in Australia.