Taxation Determination TD 2001/23




Examples: Example 1: 6. Guiseppe completed his University and other examinations in 2000 and is qualified to teach in Italian schools. Guiseppe considered that it would enhance his career prospects if he gained teaching experience outside of Europe. In November 2000 Guiseppe entered into an employment contract with the Education Department of an Australian State for the 2001 and 2002 academic years. Under the terms of the contract he will be employed as an assistant teacher in a State school where he will assist the class teacher in the teaching of the Italian language to students. Guiseppe entered Australia on 4 January 2001. His entry visa requires that he leave Australia on or before 3 January 2003. Guiseppe has and will continue to see Australia as a tourist between school terms. The Italian taxing authorities have advised Guiseppe that his Australian teaching salary is subject to tax in Italy. The remuneration paid to Guiseppe for teaching in the State school is not subject to tax in Australia. The State school is not required to withhold an amount of tax from the remuneration. | Example 2: 7. Maria is a teacher in Italy. Maria sought advice from the Australian Embassy of teaching opportunities in Australia. After being advised that her skills and qualifications were in demand in certain Australian States, Maria wrote to the Education Department of the State where she preferred to teach informing the Department that she would arrive in Australia in early December 2000 and would like to teach in a school for one academic year. Soon after her arrival, Maria was interviewed by the Department and accepted a teaching position for the 2001 academic year. Maria then toured parts of Australia and took up her teaching position in February 2001. Maria intends to return to Italy in February 2002. The Italian taxing authorities have advised Maria that her Australian teaching salary is subject to tax in Italy. The remuneration paid to Maria for teaching in the State school is not subject to tax in Australia. The State school is not required to withhold an amount of tax from the remuneration. | Example 3: 8. Alfredo is a teacher in Italy. Alfredo arrived in Australia in October 2000 and commenced to tour Australia as a backpacker. Alfredo has earned income picking fruit whilst backpacking around Australia. In late January 2001, Alfredo met Guiseppe and Maria and then successfully applied for a teaching position in an Australian school. Alfredo intends to return to Italy in July 2002. Alfredo did not enter Australia for the purpose of teaching. The remuneration paid to Alfredo for teaching in the State school is subject to tax in Australia. The State school is required to withhold an amount of tax from the remuneration. | Example 4: 9. Ileana is a teacher in Italy. Ileana arrived in Australia on 25 January 2001 to undertake a teaching contract at an Australian school for two academic years. In August 2002, Ileana booked her return flight to Italy to depart Australia on 23 January 2003. On Christmas Day, Ileana is invited by Australian friends to join them on a 2 week bush walking trip in February 2003. Ileana extends her visa, completes the bush walking trip and departs Australia on 18 February 2003. The Italian taxing authorities have advised Ileana that her Australian teaching salary is subject to tax in Italy. The remuneration paid to Ileana for teaching in the Australian school is not subject to tax in Australia. The school is not required to withhold an amount of tax from the remuneration. On the evidence available, as Ileana did not form an intention to remain in Australia for a period exceeding two years until after completing her teaching contract, no part of her teaching income is taxable in Australia. Commissioner of Taxation 3 October 2001 Not previously issued in draft form



The number, subject heading, date of effect and paragraphs 1 to 5 of this Taxation Determination are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner. The remainder of the Determination is administratively binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain how a Determination is legally or administratively binding. | This Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. Yes, the salary is exempt income in Australia if all of the requirements of Article 20 of Schedule 21 (the Italian Agreement) to the International Tax Agreements Act 1953 are met. | 2. If the salary is exempt income, subsection 12-1(1) of Schedule 1 of the Taxation Administration Act 1953 says that the employer is not required to withhold an amount of tax. | 3. Some Australian schools employ residents of Italy to assist in the teaching of the Italian language. The position in the school that the resident of Italy will hold may be described as assistant teacher or language assistant. Invariably there will be a class teacher who holds Australian teaching qualifications and the assistant teacher will work closely with and under the directions of that class teacher. While the assistant teacher may not have the full range of professional responsibilities that a class teacher will have, the assistant teacher is recognised by teachers, parents and students as teaching within the school. | 4. Article 20 of Schedule 21 to the International Tax Agreements Act 1953 says: | A professor or teacher who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching or carrying out advanced study or research at a university, college, school or other educational institution in that State and who immediately before that visit was a resident of the other Contracting State shall be exempt from tax in the first-mentioned State on any remuneration for such teaching, advanced study or research in respect of which he is, or upon the application of this Article will be, subject to tax in the other State. | 5. To obtain the 'visiting teacher' exemption from Australian income tax, the assistant teacher must satisfy the following requirements:


Related rulings: TR 92/1 TR 92/20 TR 97/16 IT 2577
Legislative references: ITAA 1953 20, Schedule 21 TAA 1953 12-1(1), Schedule 1 TAA 1953 Part IVAAA
Subject references: double tax agreement double tax convention exempt income international tax teachers withholding taxes