Private ruling: Foreign source income from an international organisation
Date of advice: 24 March 2020
Published: May 2020
Ruling period: Year ended 30 June 20 XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the income from your role with an international organisation exempt from taxation in Australia? | A1: No | Q2: Are the payments received from the International Organisation treated as if they were exempt income as not doing so would be in breach of Australia's obligations under international treaties? | A2: No

Relevant facts and circumstances: You are an Australian resident for tax purposes who entered into a contract with an international organisation (the international organisation) in early to mid- 20XX to provide expert advice to the Government of Country A. You are a current employee of an Australian employer. You received an amount as a payment for your services under the contract. You have supplied a copy of your contract with the international organisation which specifies: - The remuneration is a certain amount per day. - Pre-mission work not to exceed a couple of days. - Post-mission work not to exceed 1 day. - Mission days not to exceed a couple of weeks. - Number of travel days not to exceed a few days. - Total number of days not to exceed three weeks. - An allowance for travel of up to 2 days travel each way. - Payment will be made upon completion of each assignment to the satisfaction of the hiring department, pursuant to the letter of appointment, and submission of all required documentation. - In the event that the work assignment is cancelled, postponed, or suspended before the scheduled start date, you will not be entitled to any compensation, other than for days spent in pre-mission work and/or travel status. - Your appointment will be governed by the abovementioned terms and conditions specified in the contract and also by the administrative procedures, rules, benefits, and services generally applicable or available to Short-term experts in the international organisation, as described in Document A. You have not supplied a copy of Document A, and the relevant section on conditions of appointment, and you have also advised that you did not get a hard copy of this document. The international organisation's website has a section that provides general information on their recruitment for short term experts, and you confirmed that you were happy for us to include this information for some further general background and context: A summary of relevant points from the international organisation's website are: Overview of technical assistance and training activities - Technical assistance (TA) and training are core activities for the international organisation in its areas of expertise. - To help the international organisation' staff to deliver the program of TA and training, the international organisation draws on an extensive and carefully vetted roster of subject matter experts from around the world to undertake short-term assignments in its member countries, and the international organisation is constantly seeking to add to this roster of experienced senior professionals. Types of assignments - The international organisations short-term assignments usually involve participation on headquarters-led diagnostic missions of one to two weeks, or standalone short-term assignments of up to one month to provide hands on advisory assistance to country authorities. Occasionally experts are sought for longer-term assignments in a country. General qualifications required - For inclusion on the international organisations expert's roster, individuals should have extensive operational or policy making experience in one of the subject areas; usually stemming from senior government positions or academic life. Duties of experts during TA assignments The expert who participates in a diagnostic mission will be expected to: - Prepare for the mission by reading relevant documents prior to the mission; - Participate fully in discussions with national authorities in his/her area of expertise; - Write sections of the draft TA report that is prepared and submitted to the authorities while the TA mission is in the field; and - Contribute to the team effort as directed by the mission head. An expert undertaking a standalone TA assignment will be expected to advise and assist the country authorities in specific areas of their special expertise as provided in a detailed terms of reference. While working directly with the authorities, the expert will be required to consult staff of the international organisation at their headquarters on substantial developments and issues, and coordinate with and report regularly to the headquarters.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Subsection 6-15(2) | Income Tax Assessment Act 1997 Subsection 6-5(2) | Income Tax Assessment Act 1997 Section 6-20 | Income Tax Assessment Act 1997 Section 50-5 | Income Tax Assessment Act 1997 Section 50-50 | Income Tax Assessment Act 1936 Section 23AG | Income Tax Assessment Act 1936 Section 23AF | Income Tax Assessment Regulations 1997 Regulation 50-50.01 | Income Tax Assessment Regulations 1997 Regulation 50-50.02 | Diplomatic Privileges and Immunities Act 1967 | Diplomatic Privileges and Immunities Regulations 1989 | The International Organisations (Privileges and Immunities) Act 1963 Subsection 3(1) | The International Organisations (Privileges and Immunities) Act 1963 Subsection 5(1) | The International Organisations (Privileges and Immunities) Act 1963 subparagraph 6(1)(d)(i) | Specialized Agencies (Privileges and Immunities) Regulations 1986 Sub-regulations 8(1) and 8(2)

Reasons for decision: Detailed Reasoning - Assessable income - general: The assessable income of an individual who is a resident of Australia for taxation purposes will generally include all the income they earn from all sources, in or out of Australia. However, as per section 6-20 of the Income Tax Assessment Act 1997 (ITAA 1997) a provision of Australia's tax law or of another Commonwealth law might apply to provide an exemption from taxation on income such as salary and wages earned from certain types of employment. In cases where an individual is employed overseas on Foreign Service, the provisions of either section 23AG or 23AF of the Income Tax Assessment Act 1936 may provide an exemption from taxation in Australia on the salary and wages earned from that Foreign Service. In cases where an individual's foreign service relates to employment with or contracted work for an international organisation, an exemption from taxation may also be provided by the provisions of the International Organisations (Privileges and Immunities) Act 1963 (IO(P&I)Act)or the Diplomatic Privileges and Immunities Act 1967 (DP&I Act). Exempt income under section 23AG of the Income Tax Assessment Act 1936 Subsection 23AG(1) of the ITAA 1936 provides that foreign earnings of an Australian resident derived during a continuous period of foreign service of not less than 91 days employment in a foreign country are exempt from income tax in Australia. Foreign earnings includes income consisting of salary, wages, bonuses or allowances (subsection 23AG(7) of the ITAA 1936). You have advised that you are not an employee for this work assignment, and that your assignment was less than 91 days in duration. As such no exemption is available under section 23AG of the ITAA 1936. However, even if you were an employee of the international organisation and your assignment was for more than 91 days, you would still need to have met the requirements of subsection 23AG(1AA) of the ITAA 1936, which provides that foreign earnings are not exempt from tax unless the continuous period of foreign service is directly attributable to any of the following: · the delivery of Australia's overseas aid program by the individual's employer (except if that employer is an Australian Government Agency); · the activities of the individual's employer in operating a developing country relief fund or a public disaster relief fund that: (i) is covered by item 9.1.1 or 9.1.2 of the table in subsection 30-80(1) of the Income Tax Assessment Act 1997 (international affairs deductible gift recipients): and (ii) meets the special conditions mentioned in that item. · the activities of the individual's employer being a prescribed institution that is exempt from Australian tax (because of paragraphs 50-50 (c) or (d) of the ITAA 1997) ; or · the individual's deployment outside Australia by an Australian government (or an authority thereof) as a member of a disciplined force. In your case you do not meet any of the conditions of subsection 23AG(1AA) of the ITAA 1936, for the reasons explained below. | Detailed Reasoning - Delivery of Australian official development assistance by an employer: Taxation Ruling TR 2013/7 - Income tax: foreign employment income: interpretation of subsection 23AG(1AA) of the Income Tax Assessment Act 1936 (TR 2013/7)provides guidance on what constitutes delivery of Australian official development assistance (ODA) by an employer. Paragraph 5 of TR 2013/7 provides that 'Australian official development assistance' refers to activities or programs in respect of which the funding has been (or would properly be) classified, in whole or in part, by the Australian government as official development assistance (ODA) for the purposes of reporting to the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC). The Australian government bases its classification of funding as Australian ODA solely on the directives of the OECD DAC. Paragraph 6 of TR 2013/7 also provides that in the context of paragraph 23AG(1AA)(a) 'delivery of Australian ODA' means the act of providing, giving or sending forth the relevant Australian ODA by the employer. The 'delivery of Australian ODA by the person's employer' is the doing of the activities which are carrying out or sending forth the Australian ODA. The term 'delivery' includes activities which are necessary for or facilitate carrying out the Australian ODA. Therefore, an employer is delivering Australian ODA for the purposes of section 23AG where they are undertaking activities necessary for or which facilitate the carrying out of Australian ODA even though the expenditure on those particular activities may not be classified as Australian ODA by the Australian government. Delivery of Australian ODA does not necessarily require an employer to undertake all activities associated with the Australian ODA. In your case, you are working for an international organisation in Country A on a short-term assignment as a short-term expert. You have also advised that your foreign service is not directly attributable to the delivery of Australian ODA. As such your appointment as a short-term expert with an international organisation is not directly attributable to the delivery of Australian ODA. | Detailed Reasoning - Activities of the individual's employer in operating a developing country relief fund or a public disaster relief fund: You have not provided any information which would demonstrate that the international organisation are operating a public fund established to provide monetary relief to people in a developing foreign country who are distressed as a result of a disaster. As such your period of Foreign Service is not directly attributable to activities of your employer in operating a developing country relief fund or a public disaster relief fund. | Detailed Reasoning - Activities of the individual's employer being a prescribed institution that is exempt from Australian tax: The exemption also applies where the continuous foreign service period of a resident individual is directly attributable to the activities of the individual's employer if the employer is exempt from income tax because of paragraphs 50-50(c) or (d) of the ITAA 1997. This applies to a prescribed charitable or religious institution that is exempt from Australian income tax pursuant to item 1.1 or 1.2 of section 50-5 of the ITAA 1997. A list of prescribed institutions for the purposes of paragraph 50-50(c) of the ITAA 1997 is contained in regulation 50-50.01 of the Income Tax Assessment Regulations 1997 (ITAR 1997). A list of prescribed institutions for the purposes of paragraph 50-50(d) of the ITAA 1997 is contained in regulation 50-50.02 of ITAR 1997. In your case, the international organisation is not on the list of charitable and religious institutions contained in regulations 50-50.01 or 50-50.02 of the ITAR 1997. As such, the international organisation is not a prescribed institution exempt from income tax by virtue of paragraphs 50-50(c) or (d) of the ITAA 1997. | Detailed Reasoning - Individual's deployment outside Australia by an Australian government (or an authority thereof) as a member of a disciplined force: Taxation Ruling TR 2013/7 Income tax: foreign employment income: interpretation of subsection 23AG(1AA) of the Income Tax Assessment Act 1936 provides that the phrase 'disciplined force' refers to the Australian Defence Force (ADF), Australian Federal Police (AFP) and the State and Territory police forces. A person is 'deployed' if, and only if, they have been directed to perform duties overseas by the Commonwealth, a State or a Territory or an authority thereof in their capacity as a member of a disciplined force. You entered into a contract with the international organisation in early to mid- 2019 to provide expert advice to Government of Country A regarding a specific financial matter as a short-term expert. You have not been deployed by the ADF, AFP or a State or Territory police force. Therefore your position as is not classed as being deployed as a member of a disciplined force. Exempt income under section 23AF of the Income Tax Assessment Act 1936 Subsection 23AF(1) of the ITAA 1936 provides that where an Australian resident has been engaged on a qualifying service on a particular approved project for a continuous period of not less than 91 days, any eligible foreign remuneration derived by the person is exempt from tax in Australia. In your case your work assignment was for a period of less than 91 days in duration. As such you will not meet the conditions of subsection 23AF(1) of the ITAA 1936. However, even if your assignment was for more than 91 days you would still need to have met the other conditions of this subsection. The most relevant conditions to your situation are listed below: | Detailed Reasoning - Eligible foreign remuneration: Subsection 23AF(18) of the ITAA 1936 defines 'eligible foreign remuneration', in relation to a person, as income that is derived by the person who is resident of Australia for taxation purposes, consisting of salary, wages, commission, bonuses or allowances derived by the person in his or her capacity as an employee of an eligible contractor. Subsection 23AF of the ITAA 1936 also defines 'eligible contractor' as: - a resident of Australia (for taxation purposes), - the Commonwealth, a State, a Territory, the Government of a country other than Australia or an authority of the Commonwealth, of a State, of a Territory or of the or of the government of a country other than Australia; - an organisation of which Australia and a country or countries other than Australia are members; or - an organisation that is constituted by a person or persons representing Australia and a person or persons representing a country or countries other than Australia, or an agency of an organisation to which this applies. | Detailed Reasoning - Approved project: Subsections 23AF (18) and (11) of the ITAA 1936, also clarify that an approved project must be a project that, the Trade Minister is satisfied is an eligible project and will be, in the national interest and the Minister, has signed approval for the project. The granting of approved project status is currently administered by Austrade, as delegated by the Trade Minister. In this instance you entered into a contract with the international organisation in early to mid-2019 2019 to provide expert advice to the Government of Country A regarding as a short-term expert. You have not provided any information to confirm that your work assignment with the international organisation was part of an approved project for the purpose of Section 23AF of the ITAA 1936. Furthermore you have also advised that you are not an employee for this work assignment. As such you are not an employee of the international organisation. As such, as the approved project, and eligible foreign remuneration status have also not been met. Therefore you are not eligible for the exemption under Section 23AF of the ITAA 1936. | Detailed Reasoning - Exemption from taxation under the provisions of the International Organisations (Privileges and Immunities) Act 1963 (IOPIA): Draft Taxation Ruling TR 2019/D1 considers income of international organisations and persons connected with them that is made exempt from income tax under section 6-20 of the ITAA 1997 by section 6 of the IOPIA. The International Organisations (Privileges and Immunities) Act 1963 (IO(P&I)A) is a Commonwealth law under which an international organisation, and persons engaged by it, may be accorded certain privileges and immunities including an exemption from tax. The IO(P&I)A exempts from taxation certain income of a person connected with an international organisation, to the extent that it satisfies all of these elements: and Subsection 3(1) of the IO(P&I)A defines the term 'international organisation to which this Act applies' to mean an organisation that is declared by the regulations to be an international organisation to which the IO(P&I)A applies, and includes a body established by such an organisation. Subsection 6(1) and Part I of the Second to the Fifth Schedules to the IOPIA 1963 inclusive set out the taxation exemptions that can be conferred upon certain persons currently connected with an international organisation. Relevant to your case, this includes the following: and Relevantly, as per item 2 of Part 1 of the Fourth Schedule and item 2A of Part 1 of the Fifth Schedule this includes an exemption from taxation on salaries and emoluments received from the international organisation. The International organisation is an organisation to which the IO(P&I)A applies. This is because it is covered by the Specialized Agencies (Privileges and Immunities) Regulations 1986 (SAPIR 1986) as per the definition of specialised agency in regulation 2, the effect of regulation 3 and item 5 in the table in the schedule to the regulations. | Detailed Reasoning - Taxation exemption on the basis that you are an office holder: Sub-regulations 8(1) and 8(2) of the SAPIR 1986 provide details on the application of privileges and immunities of current officers (other than high officers) of 'specialized agencies'. Their effect is that such officers are entitled to the privileges and immunities specified in Part I of the Fourth Schedule to the IOPIA 1963 which includes item 2 concerning exemptions from taxation. (Whilst the exemption from duty on exporting personal effects and furniture does not apply due to the SAPIR 1986 that is not relevant to this case). Therefore the payments that you received in relation to your engagement with the international organisation will be exempt from income tax if it can be shown that you are a holder of an office (but not a high office) of the international organisation at the time you completed the assignment. This is a question of fact that needs to be resolved. As per South Sydney District Rugby League Football Club Ltd v. News Ltd [2000] FCA 1541 (the South Sydney District Rugby League Football Club Ltd Case) in determining what the nature of a relationship was between two parties it is necessary to look at the form and substance of that relationship. It is not appropriate to adopt the label that one or more parties may have given to the relationship and let that determine what it is. 'Office' and 'office holder' are not defined by the IOPIA 1963 and the ITAA 1997 and therefore they should take their ordinary meaning. Care must be taken to ensure that it is read with regard to the context of the statutory provision (as per Certain Lloyd's [2009] HCA 56 (Lloyds Case) at [23-26]). The guidance provided in the rulings on what is an office holder The Commissioner's views on what is an office holder are set out in in draft Taxation Ruling TR 2019/D1. As per paragraph 27 of TR 2019/D1 a holder of an office can include a person who works as an employee of an international organisation, but it does not include a person (whether an employee or not) who is: An appointment, office or position must exhibit the characteristics of an office holder. As per paragraph 25 of TR 2019/D1 the characteristics of an office holder for an appointment, office or position are: and Further guidance on who is an office holder is also provided by Taxation Ruling TR 2002/21. As is apparent from the Commissioner's views and the relevant case law in determining who is an office holder it is not sufficient to simply be an employee and thereby be regarded as an office holder. An office holder is someone who has identifiable duties, functions, responsibilities or powers to carry out. It does not include an employee who is merely following the command of a higher ranking person. This does not take away from the fact that an office holder may be an employee - it illustrates however that a person who is an employee is not necessarily or automatically to be taken to be an office holder. | Detailed Reasoning - Case law on the meaning of office holder: As discussed in paragraphs [31] and [34] of FCT v. Jayasinghe [2017] HCA 256 (the Jayasinghe Case) the term 'office' cannot be defined by reference to permanence or succession. Whether a person holds or performs the duties of an office in an international organisation concerns the relationship between the person and that organisation. As per paragraph [37] of the Jayasinghe Case, the substance of the terms of the engagement of the person and the relationship between that engagement and the organisation's performing its functions must be considered. Whether someone is an office holder is a question of fact, considered on a case by case basis. It should be clear from the duties and authority associated with the person's position within the international organisation why the privileges and immunities are conferred. As per paragraph [38] of the Jayasinghe Case a person is unlikely to be an 'office holder' if their terms of engagement place them outside the organisational structure and do not include defined duties or authority in relation to the organisation and its functions. This is consistent with the purpose of the IOPIA to confer privileges and immunities to assist organisations to perform their functions, rather than to personally benefit persons connected with the organisation (see paragraph 39 of the Jayasinghe Case and paragraph [54] of Macoun v. FCT (2015) 257 CLR 519). The High Court also affirmed the Commissioner's view outlined in paragraph 27 of TR 2019/D1 in paragraph [52] of the Jayasinghe Case. | Detailed Reasoning - Your circumstances: As noted in the paragraphs above, the word office connotes a position of defined authority in an organisation, such as a director of a company or the president of a club. The holder of a professional employment is not an office holder merely because the position has a name. An office holder's position is more than something which is important or substantial within a company. Following the listed reasons below your role on your assignment with the international organisation is best described as that of an expert or consultant, and not an office holder. As such the substance of your relationship is consistent with that of a contractor and what one would commonly understand a 'contractual employee' to be. You have also provided the relevant letter of offer which indicates that that you are a short-term expert. The letter of offer does not indicate that you hold an office in the international organisation. You are not an office holder in respect of the assignments you undertook for the international organisation. This is because: · Independent existence or permanence - the position you occupied as a short-term expert for your assignment with the international organisation did not have any permanence to it. You have stated that the position was not an ongoing role, and that it did not exist before you commenced the assignment. This demonstrates that your position will not necessarily continue to exist should you depart. This is opposed to an 'office' where the position itself is an ongoing or continuing one, either continuously or for a substantial term even if the person that occupies it at a particular point changes (an example would be the position of Governor General or the position of a Royal Commissioner). · duties, functions, responsibilities or powers are defined by the office - the consulting position that you occupied did not have duties, functions, responsibilities or powers as it is purely in an advisory capacity. You have not advised us that you had any defined duties or authority in relation to the international organisation and it carrying out its functions. As such it cannot be said that your position as a short-term expert is defined by the duties, functions, responsibilities or powers that you carried out while occupying it. Therefore, as per this factor you would not be regarded as an office holder.Similarly, your duties, functions and responsibilities have not been identified as belonging to your position. Rather they appear to have been delegated to you in your role. In addition, whilst you prepared a report for the Government of Country A and the international organisation regarding certain matters, you have not advised that you were tasked with preparation of a specific report or work product of the international organisation, and you have no direct staff which you are required to supervise or are responsible for. Instead, for the assignment that you undertook you would be better regarded as an expert or a consultant. This is on the basis that the assignment: · requires deep-level technical skills and knowledge of the subject matter (such as financial matters) or, for a large subject matter area such as finance, a part of the matter - this is consistent with the person being an expert or consultant. This is opposed to an office holder who would be expected to have a more general understanding and broader expanse of knowledge within the international organisation. An office holder would not necessarily be expected to have detailed knowledge as they would have advisers and staff to provide this. In addition an office holder would be expected to have sufficient administrative and contextual knowledge to be able to run their office effectively - which is something that is not required of an expert or consultant. As such the payment that you have received is not exempt income on the basis that you are an office holder of an international organisation under paragraph 6(1)(d) of the IOPIA 1963, taking into account the Specialized Agencies (Privileges and Immunities) Regulations 1986 (SAPIR 1986), and section 6-20 of the ITAA 1997. | Detailed Reasoning - Conclusion: As stated above, under sub-regulations 8(1) and 8(2) of the SAPIR 1986 a person who holds an office, other than a high office, in a Specialized Agency, has the privileges and immunities specified in Part I of the Fourth Schedule to the IO(P&I)A, including income tax exemption on salaries and emoluments received from the organisation. However in your case Part 1 of the Fourth Schedule to the IO(P&I)A which grants the income tax exemption does not apply as you do not hold an office as specified in the Schedule. | Detailed Reasoning - Taxation exemption on that basis that you are an expert or consultant who is performing a mission: The regulations pertaining to the international organisation do not confer any privileges and immunities to persons performing a mission or working as experts or consultants for that international organisation. Furthermore, in any case, the section in the regulations that covers experts and consultants, for the international organisation that it applies to, does not confer on any person connected with them in the capacity of performing a mission or working as experts or consultants, an exemption from taxation. | Detailed Reasoning - Further Reasoning: In summary, the IOPIA 1963 does provide for an exemption from income tax of salaries and emoluments received by an expert or a consultant under paragraph 6(1)(e), subject to the provisions of the SAPI Regulations. The manner by which section 6-20 of the ITAA 1997 exempts income from taxation that is exempted by the IOPIA in relation to office holders applies equally here in relation to considering exemption on the basis of whether you were an expert or a consultant. However, regulation 9 of the SAPIR 1986 specifies which privileges and immunities are available to a person who is 'performing a mission', and those privileges and immunities only apply to organisations that are listed by name in that regulation. · The international organisation is not one of the organisations listed. As such regulation 9 of the SAPIR 1986 does not apply to that international organisation. · In addition, regulation 9 of the SAPIR 1986 does not include privilege 2A in the Fifth Schedule to the IO(P&I)A which is the exemption from taxation on salaries and emoluments received from the relevant organisation for those performing a mission. · This means that no person who works for any specialised agency, be it performing a mission or working as an expert or consultant, is conferred an exemption from taxation. As such the payments that you have received from the international organisation are not exempt income on the basis that you are performing a mission or working as an expert or consultant under paragraph 6(1)(e) of the IOPIA 1963, taking into account the SAPI Regulations, and section 6-20 of the ITAA 1997. | Detailed Reasoning - Exemption from taxation under the provisions of the Diplomatic Privileges and Immunities Act 1967: The DP&I Act is an Act relating to Diplomatic Privileges and Immunities, and for other purposes and in some cases it provides an exemption from taxation for certain international organisations and employees of such organisations. Section 5A of the DP&I Act deals with the application of the Act in relation to certain international organisations. Subsection 5A(1) of this Act provides that the Act only applies to an international organisation that is declared by the regulations to be an international organisation for the purposes of section 5A of the Act, and for this purpose an international organisation is an organisation whose membership is made up of: - overseas countries in a particular geographical location; - an organisation constituted by persons who represent overseas countries in a particular geographical region; or - an organisation or group of organisations whose membership is constituted by organisations whose members are overseas countries in a particular geographical region or organisations that are constituted by persons representing overseas countries in a particular geographical location. The relevant regulations are the Diplomatic Privileges and Immunities Regulations 1989 (DP&I Regs) . The DP&I Act generally provides that staff of a mission, excluding locally engaged staff, receive the specified privileges and immunities, which may include an exemption from taxation. The staff receiving privileges and immunities have to be directly employed or engaged by the relevant international organisation. The international organisation is an organisation of many different countries from many different geographical locations around the world. The international organisation is not declared under the DP&I Regs as an international organisation for the purpose of section 5A of the DP&I Act, and is also unlikely to be declared to be an international organisation for the purposes of the DP&I act, as despite the fact that the international organisation is an organisation of many different countries from different locations around the world, its membership would not satisfy the specific requirements of section 5A of the DP&I Act. As such, the provisions of the DP&I Act (including any potential for exemption from taxation) do not apply to the international organisation and persons engaged by it. | Detailed Reasoning - Conclusion: The income from your role as a short-term expert with the international organisation is not exempt from taxation in Australia under the provisions of: Accordingly, that income will be included in your assessable income in Australia. | Detailed Reasoning - Question 2 - income exempt on the basis of treaty law: In early to mid- 2019 you received the following advice from a department of the International Organisation: Australia signed UN Convention on Privileges and Immunities (Convention) and agreed not to tax income received by its citizen's employees and officials of US agencies. Any changes to taxation of UN agencies employees have to involve revocation of Australia's signature on this Convention. You have also provided the following excerpt from the International Organisations Handbook for Short-Term Expert Appointments: "X. PRIVILEGES AND IMMUNITIES All experts of the international organisation are entitled to the privileges and immunities accorded to employees of the international organisation under Article IX of its Articles of Agreement and, with respect to many member countries of the international organisation, under the United Nations Convention on the Privileges and Immunities of the Specialized Agencies. These include immunity from legal process with respect to acts performed in their capacity as experts of the international organisation; immunities from immigration restrictions, alien registration requirements, and national service obligations; immunity from payment of income tax on their remuneration and the same facilities as regards exchange restrictions and travel facilities as are accorded to foreign officials of comparable rank. The immunities from immigration restrictions, alien registration requirements, national service obligations and payment of income tax are not applicable to experts who are nationals of a member country that has not undertaken to apply the UN convention on the Privileges and Immunities of the Specialized Agencies with respect to the organisation. A list of signatory countries can be found in this website: https://www.imf.org/external/SelectedDecisions/DecisionsList.aspx " You also advise that in reference to the abovementioned link, Australia is a signatory to the United Nations Convention on the Privileges and Immunities of the Specialized Agencies. | Detailed Reasoning - Further reasoning: A number of High Court decisions make it clear that Australian law only incorporates treaties to the extent that the provisions of the treaty have been incorporated into Australian domestic law. In Simsek v. Macphee 148 CLR 636; [1982] HCA 7 (the Simsek case) Stephen J established the position that provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into Australian domestic law by statute. Further consideration of the matter was given by the High Court in CPCF v. Minister for Immigration and Border Protection [2015] HCA 1 at [488] to [491] where Gagelar J stated (relevant footnotes citing further cases on the matter are also reproduced): | Detailed Reasoning - Has the power been abrogated?: 488. The plaintiff contended that, if the Court were to hold that a non-statutory executive power to prevent persons from entering Australia does exist, then that power was abrogated by the Act and the Migration Act, both of which were said to operate as part of a single statutory scheme, displacing any non-statutory executive power with respect to the exercise of power concerning immigration into Australia. 489. In Ruddock v Vadarlis, the Full Court of the Federal Court of Australia held, by majority, that the Migration Act did not abrogate executive power in this regard. The plaintiff argued that that case was wrongly decided. That argument should be rejected. 490 . Powers exercisable by the Executive government under the common law are not limited by international law obligations not incorporated into domestic law. The provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into our municipal law by an Act of the Commonwealth Parliament. In point of constitutional principle, an international treaty made by the Executive government can operate as a source of rights and obligations under our municipal law only if, and to the extent that, it has been enacted by the Parliament. It is only the Parliament that may make and alter our municipal law. 491. In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam, McHugh and Gummow JJ observed that: "in the case law a line has been drawn which limits the normative effect of what are unenacted international obligations upon discretionary decision-making under powers conferred by statute and without specification of those obligations... [S]uch obligations are not mandatory relevant considerations attracting judicial review for jurisdictional error." (emphasis added) The issue was also considered, and the earlier principle established by the High Court was applied by the High Court in NAGV and NAGW and Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] HCA 6 where in a joint judgement Gleeson CJ, McHugh J, Gummow J, Hayne J, Callinan J and Heydon J stated: However in Simsek v Macphee (1982) 148 CLR 636 at 641-643, Stephen J applied the accepted general preposition that in the absence of legislation the Convention had no legal effect in Australian municipal law upon the rights and duties of individuals and of the Commonwealth.... Furthermore Parliament may not accept or only partly accept the terms of a treaty (or convention which is a treaty) which means that not all of the treaty may be enacted into law. This was recognised in Plaintiff M47/2012 v. Director General of Security [2012] HCA 46 (the Plaintiff M47/2012 case) where Heydon J stated: Those submissions may be accepted for the purpose of the proceedings. However, the legislature may well decide not to adopt the whole of a treaty that the Executive has entered. "[T]he purposes of international instruments are not necessarily to be pursued at all costs. The purpose of an instrument may instead be pursued in a limited way, reflecting the accommodation of differing viewpoints, the desire for limited achievement of objectives, or the constraints imposed by limited resources. The authorities which the plaintiff relied on did not state that the Act gives effect to the whole of the Convention. It is notorious that it does not. The relevant question is what the Act provides, not the Convention. Therefore, in order to determine whether the income that you have received from the international organisation is exempt income, it is necessary to apply the domestic law that has been enacted. It is not appropriate to interpret a treaty or treaties and then draw the conclusion because an amount is to be regarded as exempt income that it is actually exempt in Australia. This is particularly so, because as per the Plaintiff M47/2012 case a choice may have been made by Parliament to only partly accept (and enact) the terms of a treaty. Enacting can include legislating a new Act or putting in place subordinated legislation, such as Regulations to an existing act, to give effect to a treaty. The IOPIA 1963 is a domestic Commonwealth law that implements Australia's, (the Commonwealth's), obligations under International Treaties that the Australian government (the executive), has agreed to and ratified to the extent that it has been enacted. In respect of the IOPIA 1963 this includes the UN Convention on the Privileges and Immunities of the Specialized Agencies, together with Annex IV (the Specialized Agencies Convention), that was adopted by the General Assembly of the United Nations on 21 November 1947 and acceded to by Australia on 9 May 1986 (see https://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=III-2&chapter=3&lang=en ). Australia gave effect to the Specialized Agencies Convention by utilising the IOPIA 1963. This was achieved by implementing the SAPIR 1986. This is acknowledged by the Explanatory Statement to Statutory Rules No. 67, 1986 (being the original SAPIR 1986) which states: 2. In December 1985 the Government decided that Australia would accede to the Convention on the Privileges and Immunities of the Specialized Agencies in respect of the specialized agencies covered by the Convention, and that it should accept the Agreement on the Privileges and Immunities of the International Atomic Energy Agency, without reservations. It also decided to make regulations under the Act to give full effect to Australia's obligations under the two agreements. 3. The purpose of these Regulations is to give effect to that decision, and to make certain necessary consequential changes to other regulations. Details are set out in Attachment A. The IOPIA 1963 and the SAPIR 1986 are the domestic law that must be reviewed to determine whether the payments that you have received from the International Organisation are exempt income (see response to Question 1). As found there the payments that you have received are not exempt income either on the basis that you are an office holder or that the income is exempt on the basis that you are an expert or consultant of the International Organisation. They would also not be exempt under any other provision of the IOPIA 1963 and SAPIR. As established by Stephen J of the High Court in the Simsek case and accepted by the High Court in many other cases since, what matters in these cases is what the domestic law provides. The courts are not bound by the text of the treaties in any way. Generally, a court will only take into account the words of a treaty in the following circumstances (which do not apply to you): · enacted legislation provides that the treaties themselves form part of the domestic law (as is the case with taxation treaties which have been given legislative effect through the International Tax Agreements Act 1953) · as interpretive material in assisting to interpret domestic law as per section 15AB of the Acts Interpretation Act 1901. However this would only be necessary in situations where the provisions of the Act being interpreted are in some way unclear or ambiguous.

Subject matter experts - Financial matters: These experts should have extensive experience either in senior positions in the ministry responsible for analysis concerning financial matters or formulation of their country, or a comparable advisory position. | Experts should also have: | - Experience in research and teaching in certain financial matters from a reputable academic institution and / or consulting work against a background of exposure to policy issues. | - A solid understanding of the basic economic and structural principles of certain matters; | You have provided the following information about your short-term work assignment with the international organisation: | (a) You were not an employee, as you were an expert under contract with the international organisation engaged to assist Country A. | (b) Your work assignment related to a specific mission linked to specific expert assistance for Country A. | (c) Your work assignment was not directly attributable to the delivery of Australian official development assistance by the international organisation. | (d) Your work assignment was not directly attributable to the activities of the international organisation in operating a developing country relief fund or a public disaster fund. | (e) You are not liable to taxation on your foreign income in Country A, as you are not a resident of Country A for taxation purposes and you were only there for two weeks of the work assignment. Your work assignment is not covered under a Memorandum of Understanding (MOU) or an Agreement of Cooperation for development between the Australian Government and the Government of Country A. | (f) You work assignment was not part of an approved project for the purposes of section 23AF of the Income Tax Assessment Act 1936 (ITAA 1936). | (g) You did not have a diplomatic passport and you did not receive any diplomatic privileges. | (h) The purpose of your engagement in the position was to provide specialised advice to agencies of the Government of Country A regarding certain financial matters. | (i) Your engagement was also on the basis that the payments were exempt from income tax, as the international organisation had provided you with this advice. | (j) You prepared an 'in confidence' report for the Government of Country A and the international organisation as part of your engagement. As the report was not published and subject to privacy restrictions you are unable to supply a copy of the report. | (k) For day to day interactions you reported directly to the head of the region for the international organisation who was based in a major city in Country A, however you were accountable to send the final report to the international organisations headquarters in Country B, and also to the Country A Government agencies you dealt with. | (l) You did not have any one reporting to you. | (m) You did not engage any other persons to perform any part of the work in the position, as it was not relevant to your appointment, given that your appointment was linked to your personal expertise. | (n) The length of the engagement in the position was two weeks, plus some preparatory work and completion work, for a total of three weeks duration. | (o) The engagement was for a specific period and for a specific outcome (the preparation of the report), however there was some freedom to shape those days and the meetings within them, and there was also some work completed outside of standard work hours on the compilation of the report. | (p) You did not accrue any leave entitlements. | (q) You were entitled to a travel allowance as specified in the contract. | (r) You were required to deliver the report and expert advice as required under the terms of the contract, and if it was not to the standard the international organisation and Country A Government required you would be required to amend the report to ensure that you were paid. | (s) The location of the work was in Country A, where there was also some pre-work and follow up work. | (t) You worked at the international organisations offices in Country A as well as attending meetings in the premises of the Country A Government agencies that you were working with for the international organisation. You also did some out of hours work in your hotel in Country A. | (u) No part of the work assignment was completed in Australia. | (v) As the work was about advising the Country A Government agencies you were required to be in Country A for the work assignment. | (w) You paid for accommodation, local transport and a business visa, which you were reimbursed for. The international organisation paid for the flights directly through their corporate travel area in Country B. | (x) You provided your own equipment for the work assignment, which included a laptop and phone. | the income is received from an international organisation to which the IOPIA 1963 applies | the person is connected with the international organisation in one of the ways set out subsection 6(1) of the IO(P&I)A | the conditions and other particulars provided in the regulations for the international organisation are satisfied in relation to the income of the person. | a person who holds an office in an international organisation (but who is not a holder of a high office) - as per paragraph 6(1)(d) and Part I of the Fourth Schedule to the IOPIA 1963 | a person who is serving on a committee, or is participating in the work or performing a mission - as per paragraph 6(1)(e) and Part I of the Fifth Schedule to the IOPIA 1963 | locally engaged and paid an hourly rate, or | engaged as an expert or consultant. | independent existence - the office must exist regardless of the individual who occupies the office from time to time. This means that if the individual currently occupying the office vacates that office, the office must continue to exist to be filled by another individual | duties, functions, responsibilities or powers - the office must have identifiable duties, functions, responsibilities or powers other than a mere advisory function. These features of the office (or of the panel, board, committee or tribunal to which the individual has been appointed) would usually be specified in the relevant legislation or statutory instrument [or for a common law situation, foundation document or equivalent document of that nature] | the relevant duties, functions, responsibilities or powers must attach to the office itself, rather than the individual who occupies the office. | duties, functions, responsibilities or powers belong to the office - the position of short-term expert that you occupied does not have duties, functions, responsibilities or powers within the international organisation as it is purely an advisory role. There is also nothing to suggest that there is a requirement to have any knowledge or take anything from prior engagements to future engagements of this type. Therefore there is no transfer of duties, functions, responsibilities or powers within the international organisation from one occupant of the position to the next one. As none of these things transition from occupant to occupant with the position you would not be regarded as an office holder as per this factor. | was short-term - your assignment was for three weeks in duration which is consistent with an expert or consultant role. This is opposed to an officer holder who would be expected to hold their position for a longer period of time to give stability to the office and allow its duties, functions and responsibilities to be performed in an effective manner. | is performed in an advisory capacity - the undertaking of the work was in an advisory capacity which is consistent with an expert or consultant role. Furthermore the work that was undertaken did not include any work concerned with any recommendations or permit for the making of significant decisions within the international organisation. This is opposed to an office holder who has duties, functions and responsibilities within an organisation that go beyond that of merely being an advisor. | the International Organisations (Privileges and Immunities) Act 1963, or