Private ruling: Assessability of foreign employment income
Date of advice: 10 August 2015
Published: August 2015
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Question and answer | Will your foreign service from 1 June 2014 to 30 June 2014 meet the requirements under section 23 AG(6F) of the Income Tax Assessment Act 1936 ? | Yes.

Relevant facts and circumstances: You were a resident of Australia for taxation purposes for the 2014 income year. You are engaged in foreign service as an employee for more than 91 days in the period. Your foreign service is directly attributable to Official Development Assistance. You are not excluded from the exemption from the non-exemption conditions.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 23AG

Reasons for decision: Summary: Subsection 23AG(1) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that foreign earnings are exempt from income tax where all of the following requirements are satisfied: • you are a resident of Australia and a natural person, • you are engaged in foreign service, • the foreign service is for a continuous period of at least 91 days, • you derive foreign earnings from that foreign service, • the foreign service is directly attributable to an activity that is listed in subsection 23AG(1AA) of the ITAA 1936, and • the foreign earnings are not exempt from income tax in the foreign country only because of one of the reasons listed in subsection 23AG(2) of the ITAA 1936. 23AG(6F) (Anticipation of exemption by Commissioner) Where: (a) a person has derived foreign earnings during a year of income; and (b) at the time of making an assessment in respect of income of the person of the year of income, the Commissioner is of the opinion that, at a later time circumstances will exist because of which those foreign earnings will be exempted from tax by this section; the Commissioner may apply the provisions of this section as if those circumstances existed at the time of making the assessment. This means that the service is treated as if you had worked for at least 91 days overseas.