Private ruling: International Organisations - Privileges and Immunities - Salary paid to an employee
Published: July 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016

Ruling: Q1: Is the income derived from your service with an international organisation in Australia exempt from tax in Australia? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5(2). | Income Tax Assessment Act 1997 Subsection 6-15(2). | Income Tax Assessment Act 1997 Section 6-20. | International Organisations (Privileges and Immunities) Act 1963 Paragraph 3(1)(b). | International Organisations (Privileges and Immunities) Act 1963 Subsection 5(1). | International Organisations (Privileges and Immunities) Act 1963 Subparagraph 6(1)(d)(i). | The regulation for the international organisation made under the International Organisations (Privileges and Immunities) Act 1963 Regulation 3. | The regulation for the international organisation made under the International Organisations (Privileges and Immunities) Act 1963 Subregulation 6(1). | The regulation for the international organisation made under the International Organisations (Privileges and Immunities) Act 1963 Subregulation 7(1). | The regulation for the international organisation made under the International Organisations (Privileges and Immunities) Act 1963 Subregulation 8(1). | The regulation for the international organisation made under the International Organisations (Privileges and Immunities) Act 1963 Subregulation 10(1).

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (the "ITAA 1997") provides that the assessable income of an Australian resident will include ordinary income derived from all sources whether in or out of Australia, during the income year. Income from your salary paid by the body of the international organisation is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997. However, subsection 6-15(2) of the ITAA 1997 provides that if an amount is exempt income then it is not assessable income. Section 6-20 of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 or another Commonwealth law. The International Organisations (Privileges and Immunities) Act 1963 (the "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. Subsection 5(1) of the IO(P+I)A provides that the regulations may declare an organisation to be an organisation to which the IO(P+I)A applies. Paragraph 3(1)(b) of the IO(P+I)A defines the term an "international organisation to which this Act applies" to mean an organisation that is declared by the regulations to be an international organisation to which IO(P+I)A applies, and includes a body established by such an organisation. Regulation 3 of the regulation for the international organisation made under the IO(P+I)A (the "Regulations") provides that the international organisation is an international organisation to which the IO(P+I)A applies. The body of the international organisation you are employed with is an organ of the international organisation. Therefore, the body is an international organisation to which IO(P+I)A applies. Subparagraph 6(1)(d)(i) of the IO(P+I)A provides that the regulations may confer all or any of the privileges and immunities set out in Part I of the Fourth Schedule upon a person who holds an office in an international organisation to which the IO(P+I)A applies, not being an office prescribed by the relevant regulations as a high office. In your case, the relevant international organisation is the body. You are the holder of an office with the body whilst in Australia. That office is not a high office as provided in subregulations 6(1), 7(1) and 8(1) of the Regulations. Subregulation 10(1) of the Regulations provides that a person who holds an office in the international organisation, other than a person who holds a high office, has the privileges and immunities specified in Part I of the Fourth Schedule to the IO(P+I)A. Paragraph 2 of Part I of the Fourth Schedule to the IO(P+I)A provides an exemption from taxation on salary and emoluments received from the international organisation. As you are a holder of an office of an international organisation to which the IO(P+I)A apples, the income received by you from working for the body is exempt from Australian tax in accordance with subparagraph 6(1)(d)(i) of the IO(P+I)A and subregulation 10(1) of the Regulations. Accordingly, as the income is exempt under section 6-20 of the ITAA 1997, it is not assessable under subsection 6-5(2) of the ITAA 1997. | Detailed Reasoning - Disclaimer: You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you or to someone acting on your behalf. The Register of private binding rulings is a public record of private rulings issued by the ATO. The register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.

Relevant facts: You are a foreign national. | You currently work for a body established by an international organisation. | The body of the international organisation opened an international operating unit in Australia. | You hold a position with the body of the international organisation whilst in Australia. You are not employed as an expert or consultant. | You have advised that you will be an Australian resident for taxation purposes for the duration of your stay in Australia.