ATO Interpretative Decision
ATO ID 2001/794 (Withdrawn)
Assessability of United States Air Force pension
FOI status: may be released
||This ATO ID is withdrawn. Guidance on the issue contained in this ATO ID can be found at Foreign income (QC 31917).
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 23 February 2018.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is a United States Air Force pension received by an Australian resident taxpayer assessable under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
No. A United States Air Force pension received by an Australian resident taxpayer is not assessable under section 6-5 of the ITAA 1997.
The taxpayer is a citizen of the United States of America who has retired from the United States Air Force.
The taxpayer is a resident of Australia for taxation purposes and receives a United States Air Force pension.
Reasons for Decision
Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. However, if an amount is exempt income it is not included in the assessable income of a taxpayer (section 6-15 of the ITAA 1997).
Agreements that Australia has with various countries under the International Tax Agreements Act 1953 (the Agreements Act) operates to prevent the double taxation of income. Section 4 of the Agreements Act incorporates that Act with the ITAA 1997 so that both Acts are read as one. The Agreements Act effectively overrides the ITAA 1997 where there are inconsistent provisions (except for some limited provisions).
Article 19 of Schedule 2 (the Australia - United States Convention) to the Agreements Act provides that wages, salaries and similar remuneration, including pensions, paid from the funds of the United States of America for labour or personal services performed as an employee in the discharge of governmental functions of the United States of America shall be exempt from tax in Australia.
The United States Air Force pension received by the taxpayer is exempt income and therefore not assessable in Australia under section 6-5 of the ITAA 1997.
Date of decision: 28 June 2001
|Year of income:||Year ended 30 June 2001|
Income Tax Assessment Act 1997
International Tax Agreements Act 1953
Schedule 2, Article 19
Double tax agreements
Foreign pension income
Business Line: Small Business/Individual Taxpayers
Date of publication: 21 December 2001
|ATO ID 2001/794 (Withdrawn) history