ATO Interpretative Decision
ATO ID 2002/182 (Withdrawn)
Exempt Income - Approved overseas project in a foreign country
FOI status: may be released
||This ATO ID is withdrawn. Guidance on the issue contained in this ATOI ID can be found at the following Approved overseas projects
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 11 April 2017.
|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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 taxpayer entitled to exemption under section 23AF of the Income Tax Assessment Act 1936 (ITAA 1936) for income received whilst working on an approved overseas project for a minimum of 91 days?
Yes. The taxpayer is entitled to exemption under section 23AF of the ITAA 1936 for income received while working on an approved overseas project.
The taxpayer is a resident of Australia for income tax purposes.
The taxpayer received approved project status from Austrade on an overseas work contract undertaken in a foreign country.
The proposed period of absence is a minimum of 91 days.
Reasons for Decision
Section 23AF of the ITAA 1936 provides that income derived by a resident taxpayer from at least 91 days continuous employment on an approved overseas project is exempt from tax, provided that the taxpayer is a resident of Australia for tax purposes at the time the foreign remuneration is derived.
All income directly attributable to qualifying service by the taxpayer on an approved project (for example, salary, wages, commission, bonuses, allowances, contractual payments and payments for recreation leave entitlements which accrue during the relevant period) is eligible for the exemption.
As the taxpayer is a resident and will be employed on an approved project for a minimum of 91 days, they will be entitled to the exemption under section 23AF of the ITAA 1936.
Note: Approved overseas projects income is taken into account in calculating Australian tax payable on other income derived by the taxpayer. Tax on the non-exempt income is calculated by applying a notional average rate of tax payable on the sum of the exempt and non-exempt income.
Date of decision: 30 January 2002
Income Tax Assessment Act 1936
Related ATO Interpretative Decisions
ATO ID 2001/152
ATO ID 2001/256
Approved overseas projects
Siebel/TDMS reference number: DW238749; 1-5A5MW3A
Business line: Small Business/Individual Taxpayers
Date of publication: 28 February 2002
Date reviewed: 3 June 2014