Private ruling: Residency and income
Date of advice: 3 January 2018
Published: May 2018
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Questions and answers | Are you required to declare foreign source income in your Australian tax return? | No.

Relevant facts and circumstances: You are a temporary resident of Australia. You are a resident of Australia for taxation purposes. You moved to Australia from country y a number of years ago to live and work. You have investments in Country Y. You pay tax on your investments in Country Y. You receive income from dividends and interest as well as capital gains.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 768-910. | Income Tax Assessment Act 1997 Section 768-915. Reasons for decision | Foreign source income | From 1 July 2006, those taxpayers who are temporary residents do not have to pay tax in Australia on most of their foreign income if they: | ● are an individual who is an Australian resident for tax purposes, and | ● Satisfy the requirements of being a temporary resident. | Section 768-910 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that ordinary income derived from a foreign source (excluding employment related income and capital gains on shares and rights acquired under employee share schemes) and is exempt from income tax in Australia when derived by a temporary resident in Australia. | Therefore, as you are a temporary resident of Australia for taxation purposes, any foreign sourced income you have derived will be exempt from income tax in Australia under section 768-910 of the ITAA 1997. | This income is not required to be declared in your Australian income tax return.