Residency for tax purpose – Part 15
Developing country relief fund
A developing country relief fund is a fund established by an organisation solely for the purpose of providing relief to people of a developing country.
The organisation must be an approved organisation as declared by the Minister for Foreign Affairs and the country must be a developing country as declared by the Minister for Foreign Affairs.
Public disaster relief fund
A public disaster relief fund is a fund established and operated by a public benevolent institution in response to an event recognised as a disaster by the Minister for Foreign Affairs.
If you are unsure of whether you work for a developing country relief fund or a public disaster relief fund, you should seek advice from your employer.
A prescribed institution is exempt from Australian income tax
You may be eligible for exemption if your foreign service is directly attributable to working for a prescribed charitable or religious institution that is exempt from Australian income tax.
Such organisations are either located outside Australia or have a physical presence in Australia but incur their expenditure and pursue their objectives principally outside Australia.
If you are unsure of whether you work for a prescribed charitable or religious institution, you should seek advice from your employer.
Foreign deployment as a member of disciplined force
You may be eligible for exemption if your foreign service is directly attributable to deployment outside Australia as a member of a disciplined force by an Australian Government, or an authority thereof.
The ‘disciplined force’ means a defence force, including a peacekeeping force, and a police force.
As a member of a defence force, the exemption applies to your deployment outside Australia as part of a non-warlike operation.
As a member of a police force, the exemption applies to you if you are an Australian Federal Police employee deployed on an International Deployment Group mission and you are subject to a commander’s orders to achieve operational policing outcomes.
Non-exemption conditions
Your foreign employment income is not exempt from Australian tax if you did not have to pay tax in the country where you earned that income because of any of the following:
- a tax treaty with Australia or a law giving effect to a treaty agreement
- the foreign country does not impose tax on employment or personal services income – for example, Saudi Arabia
- a law of the foreign country or an international agreement to which Australia is a party that deals with:
- diplomatic or consular privileges and immunities, or
- privileges and immunities for people connected with international organisations, such as the United Nations.
