ATO Interpretative Decision

ATO ID 2001/187 (Withdrawn)

Income Tax

• This ATO ID is withdrawn and has been replaced with TD 2001/22 Income tax: Is salary paid to a German resident employed as an assistant teacher in an Australian school exempt income?
  This document has changed over time. View its history.

Issue

Is the salary paid by a college to a recently qualified teacher from Germany, who has come to Australia to teach, for two years or less, exempt from tax in Australia under paragraph 1 of article 19 of Schedule 9 to the International Tax Agreements Act 1953.

Decision

Yes. Salary earned by a recently qualified overseas teacher, teaching in Australia for less than two years, will be exempt from income tax under paragraph 1 of article 19 of Schedule 9 to the International Tax Agreements Act 1953.

Facts

The taxpayer was a resident of The Federal Republic of Germany (Germany) immediately before departing for Australia.

The taxpayer enters a contract to be employed in an Australian educational institution. The taxpayer is to teach or assist in teaching the German language to the students of the educational institution. Under the contract for employment the taxpayer's job title is language assistant.

The taxpayer had recently qualified as a teacher in Germany but had not yet taught.

The taxpayer furnishes a copy of the teaching qualification obtained in their country as well as a duty statement and hours of work to be performed at the Australian educational institution pursuant to the employment contract.

The taxpayer has a 2 year visa, and plans to leave Australia before the visa expires.

While in Australia the taxpayer is teaching the German language to students at the educational institution.

The educational institution confirms that the taxpayer is teaching the German language to students, although under the direction of the classroom teacher.

Reasons For Decision

To obtain an exemption from Australian income tax for the teaching salary, the taxpayer must comply with paragraph 1 of article 19 of Schedule 9 to the International Tax Agreements Act 1953. In order to do so the taxpayer must satisfy all of the following requirements:

(1)

must be a professor or teacher at the time of leaving Germany to visit Australia;

(2)

must be a resident of Germany under the terms of Schedule 9 at that time;

(3)

their visit to Australia must be for a period not exceeding two years; and

(4)

the purpose of the visit must be to carry out advanced study or research or teaching at a university, college, school or other educational institution.

A taxpayer will be regarded as a teacher if they were either working as a qualified teacher or they had recently qualified as a teacher but had not yet commenced teaching prior to coming to Australia.

The taxpayer had qualified as a teacher prior to leaving Germany and is therefore accepted as being a teacher for the purposes of article 19.

The taxpayer was a resident of Germany at the time of leaving to visit Australia.

The taxpayer's visa is for a maximum of 2 years and it is accepted that the taxpayer does not intend to remain in Australia for longer than this period.

It is accepted that the taxpayer is teaching at a educational institution while in Australia, even though they are doing so under the direction of the classroom teacher.

The taxpayer satisfies the requirements of paragraph 1 of article 19 of Schedule 9 of the International Tax Agreements Act 1953 and therefore the salary they receive is exempt from Australian income tax.

Legislative References:
International Tax Agreements Act 1953
   Schedule 9
   Schedule 9 Article 3
   Schedule 9 Article 19

Keywords
Double tax agreements
Residence of individuals
Germany
Exempt income
Teacher

Business Line:  Small Business/Individual Taxpayers

Date of publication:  10 August 2001

ISSN: 1445-2782