Private ruling: International Income
Date of advice: 27 July 2016
Published: September 2016
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2014

Ruling: Q1: Are the payments you received from Country X to finance your studies assessable in Australia? | A1: No

Relevant facts and circumstances: You arrived in Australia in 20XX. You planned to study until the end of 20XX when you intended to graduate. You have now graduated from this degree. You are married however your spouse remained in Country X while you study in Australia. You struck a financial agreement with the firm which employed you in Country X. They paid you a monthly payment during your studies. These payments had already been taxed in Country X. Accordingly, tax had been deducted. You intend to remain in Australia and study for a Ph.D. degree. You have been employed from 20XX as a casual staff member at the university where you study.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 Double Tax Agreement with Country X

Reasons for decision: Summary: A regular payment is ordinary income and is normally assessable in Australia under the provisions of section 6-5 of the ITAA 1997. This will generally be the case regardless of whether the recipient is a resident or non-resident of Australia for taxation purposes. Where an individual is receiving a payment in Australia from another country, the application of any applicable Double Tax Agreement (DTA) between Australia and the other country needs to be considered in determining the country in which that payment will be assessable. A Double Tax Agreement exists between Australia and Country X. The agreement between Australia and the overseas country operates to avoid the double taxation of income received by residents of Australia and the overseas country. An article of the relevant overseas agreement considers the tax treatment of student payments. This article specifies that certain payments that are taxable in the paying country are not taxable in Australia. Therefore, your payments are not assessable in Australia under the relevant article of the Double Tax Agreement between Australia and the overseas country. | Detailed Reasoning - Conclusion: The payments you received while studying would not be assessable in Australia.