Taxation Determination TD 2001/24




Examples: Example 1: 6. Mika completed her University and State examinations in 2000 and is qualified to teach in Japanese schools. Mika considered that it would enhance her career prospects if she gained teaching experience outside of Japan. In November 2000 Mika 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 she will be employed as an assistant teacher in a State school where she will assist the class teacher in the teaching of the Japanese language to students. Mika entered Australia on 4 January 2001. Her entry visa requires that she leave Australia on or before 3 January 2003. Mika has and will continue to see Australia as a tourist between school terms. The remuneration paid to Mika 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. Masojuro is a teacher in Japan. Masojuro sought advice from the Australian Embassy of teaching opportunities in Australia. After being advised that his skills and qualifications were in demand in certain Australian States, Masojuro wrote to the Education Department of the State where he preferred to teach informing the Department that he would arrive in Australia in early December 2000 and would like to teach in a school for one academic year. Soon after his arrival, Masojuro was interviewed by the Department and accepted a teaching position for the 2001 academic year. Masojuro then toured parts of Australia and took up his teaching position in February 2001. Masojuro intends to return to Japan in February 2002. The remuneration paid to Masojuro 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. Yoko is a teacher in Japan. Yoko arrived in Australia in October 2000 and commenced to tour Australia as a backpacker. Yoko has earned income picking fruit whilst backpacking around Australia. In late January 2001, Yoko met Mika and Masojuro and then successfully applied for a teaching position in an Australian school. Yoko intends to return to Japan in July 2002. Yoko did not enter Australia for the purpose of teaching. The remuneration paid to Yoko 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. Yukio is a teacher in Japan. Yukio arrived in Australia on 25 January 2001 to undertake a teaching contract at an Australian school for two academic years. In August 2002, Yukio booked his return flight to Japan to depart Australia on 23 January 2003. On Christmas Day, Yukio is invited by Australian friends to join them on a 2 week bush walking trip in February 2003. Yukio extends his visa, completes the bush walking trip and departs Australia on 18 February 2003. The remuneration paid to Yukio 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 Yukio did not form an intention to remain in Australia for a period exceeding two years until after completing his teaching contract, no part of his 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 15 of Schedule 6 (the Japanese 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 Japan to assist in the teaching of the Japanese language. The position in the school that the resident of Japan 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 15 of Schedule 6 to the International Tax Agreements Act 1953 says: | Where a professor or teacher, who is a resident of one of the Contracting States, is temporarily present in the other Contracting State for the purpose of teaching or conducting research during a period not exceeding two years at a university, college, school or other educational institution in that other Contracting State, remuneration derived by him for so teaching or conducting research for that period shall be exempt from tax in that other Contracting 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 15, Schedule 6 TAA 1953 12-1(1), Schedule 1 TAA 1953 Part IVAAA
Subject references: double tax agreement doulbe tax convention exempt income international tax teachers withholding taxes