Taxation Determination TD 2001/21




Examples: Example 1: 6. Jean-Pierre completed his University and other examinations in 2000 and is qualified to teach in French schools. Jean-Pierre considered that it would enhance his career prospects if he gained teaching experience outside of Europe. In November 2000 Jean-Pierre 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 French language to students. Jean-Pierre entered Australia on 4 January 2001. His entry visa requires that he leave Australia on or before 3 January 2003. Jean-Pierre has and will continue to see Australia as a tourist between school terms. The remuneration paid to Jean-Pierre 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. Nadine is a teacher in France. Nadine 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, Nadine 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, Nadine was interviewed by the Department and accepted a teaching position for the 2001 academic year. Nadine then toured parts of Australia and took up her teaching position in February 2001. Nadine intends to return to France in February 2002. The remuneration paid to Nadine 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. Henri is a teacher in France. Henri arrived in Australia in October 2000 and commenced to tour Australia as a backpacker. Henri has earned income picking fruit whilst backpacking around Australia. In late January 2001, Henri met Nadine and Jean-Pierre and then successfully applied for a teaching position in an Australian school. Henri intends to return to France in July 2002. Henri did not enter Australia for the purpose of teaching. The remuneration paid to Henri 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. Marie-France is a teacher in France. Marie-France arrived in Australia on 25 January 2001 to undertake a teaching contract at an Australian school for two academic years. In August 2002, Marie-France booked her return flight to France to depart Australia on 23 January 2003. On Christmas Day, Marie-France is invited by Australian friends to join them on a 2 week bush walking trip in February 2003. Marie-France extends her visa, completes the bush walking trip and departs Australia on 18 February 2003. The remuneration paid to Marie-France 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 Maria-France 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 Paragraph 19(1) of Schedule 11 (the French 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 France to assist in the teaching of the French language. The position in the school that the resident of France 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. Paragraph 19(1) of Schedule 11 to the International Tax Agreements Act 1953 (as amended by the Protocol at Schedule 11A to the same Act) says: | Where a professor or teacher who is a resident of a Contracting State visits the other Contracting State for a period not exceeding two years for the purpose of teaching or conducting research at a university, college, school or other educational institution, remuneration which he receives for so teaching or conducting research shall be taxed only in the first-mentioned 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 19(1), Schedule 11 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