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1 Is the income you derive from the XXXX assessable in Australia under section 6-5 of the Income Tax Assessment Act 1997 ?

1 No. This ruling applies for the following period : Year ended XX June 20XX The scheme commenced on: XX July 20XX

You are a resident of Australia for taxation purposes. You are a consultant with an international organisation. Your contract is for a period of several months. You have supplied a copy of your consultancy agreement which forms part of the private ruling application. This consultancy agreement provides that you will be paid on a daily basis, with the payment being conditional upon certification of days worked and satisfactory completion of the assignment. Your contract is based in Australia with some travel outside Australia. You have also supplied a copy of the Terms of Reference for your consultant role which forms part of the private ruling application. This contains reference to your position, including background information, along with roles and responsibilities. You report to your supervisor. There is a general description of tasks and objectives to be achieved including: Support the global rollout of the relevant programme. Oversee the programme of support in certain countries. Develop and provide guidance and resources to support countries in navigating the process and gather relevant information to inform their national plans.

Facilitate national consultations, workshops, and meetings with countries and international meetings. Support the team in applying the process and key principles effectively. Present findings to the community. Key Performance Indicators Expected outputs and required completion date Outcomes produced by your engagement in the position You contribute as part of a team and lead teams and undertake work alone, to prepare concepts, information notes, briefs, proposals, review and analysis and normative materials and publications. You also represent the organisation at official meetings, workshops and consultations. These result in the development, design, planning and functioning of the group. Countries are supported in the decisions, design and functionality of their systems through facilitated multistakeholder meetings, institutional analysis, political economy assessments and shared priorities for a theory of change. The materials produced inform, and often form, the official documentation of the national system and the responsibilities of government agencies and others.

Meeting planning, organisation, operation, reporting upon and developing the inputs from meetings into materials, publications and positions. The work you have completed upon the ending of your work assignment The publications, materials, reports and analyses that you produce will be used in ongoing across governments in the partnering countries. Staff reporting to you You lead a team undertaking the development and testing of a XX for countries to use to assess their currents status and establish priorities for improvement. You are the focal point for a number of countries and supervise a governance expert for each and then experts with required skills as they contribute to the planning processes. You are not able to engage any other persons to assist you with your consultancy contract. The role of consultant has been in existence for decades and consistently. It has expanded in numbers and will be ongoing. The role of leading teams in country and supporting management overall, including developing the initiative, has been ongoing for a few years. You have no leave entitlements. The number of days you work is fixed by contract.

Should there be any defects in the work undertaken, you are under no obligation to correct this. The hours of work vary due to time zones and work demands. Work hours are agreed in consultation subject to those factors and any other considerations. All of your expenses are recovered or reimbursed by the organisation. The organisation provides you with a laptop and you are not provided a phone or reimbursed for the costs associated with the phone. Your travel overseas as part of your contract.

Income Tax Assessment Act 1997 section 6-5 Income Tax Assessment Act 1997 section 6-15 Income Tax Assessment Act 1997 section 6-20 International Organisations (Privileges and Immunities) Act 1963 Specialized Agencies (Privileges & Immunities) Regulations 1986

Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of an Australian resident includes ordinary income derived from all sources, whether in or out of Australia, during the income year. Income from the provision of services is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997. However, subsection 6-15(2) of the ITAA 1997 says that if an amount is exempt income, then it is not assessable income. Section 6-20 of the ITAA 1997 provides that an amount of ordinary income is exempt income if it is made exempt from income tax by a provision of the ITAA 1997 or another Commonwealth law. The International Organisations (Privileges and Immunities) Act 1963 (IOPI Act) is a Commonwealth law under which an international organisation and persons engaged by it, may be accorded certain privileges and immunities including an exemption from income tax. The International organisation is an organisation to which the IOPI Act applies.

Part 1 of the Fourth Schedule to the IOPI Act provides that a person who holds an office (other than a high office) in an international organisation will be exempt from taxation on salaries and emoluments received from the international organisation. Subsection 5(1) of the IOPI Act states that the regulations may declare an organisation to be an organisation to which the IOPI Act applies. Column two of the Schedule to the Specialized Agencies (Privileges & Immunities) Regulations 1986 (SAPI Regulations) lists the international organisation as a specialized agency. Regulation 3 of the SAPI Regulations states that each specialized agency is an international organisation to which the IOPI Act applies, therefore the international organisation is an international organisation to which the IOPI Act applies. The IOPI Act exempts from taxation certain income of a person connected with an international organisation, to the extent it satisfies all of these elements: •                     the income is received from an international organisation to which the IOPI Act applies; •                     the person is connected with the international organisation in one of the specified ways; and

•                     the conditions and other particulars provided in the regulations for the international organisation are satisfied in relation to the income of the person. Subsection 6(1) and Part I of the Second to the Fifth Schedules to the IOPI Act inclusive set out the taxation exemptions that can be conferred upon certain persons connected with an international organisation. Relevant to your case, this includes a person who holds an office in an international organisation (but who is not a holder of a high office), as per paragraph 6(1)(d) of the IOPI Act. As per item 2 of Part 1 of the Fourth Schedule to the IOPI Act, this includes an exemption from taxation on salaries and emoluments received from the international organisation. Under subregulation 8(1) of the SAPI Regulations, a person who holds an office (other than a high office) in a specialized agency has the privileges and immunities specified in Part 1 of the Fourth Schedule to the IOPI Act, including an income tax exemption on salaries and emoluments received from the organisation.

For completeness, we note that the IOPI Act may also exempt the income of a person who is 'serving on a committee or is participating in the work or performing a mission', as per paragraph 6(1)(e) and item 2A of Part I of the Fifth Schedule to the IOPI Act. However, subregulations 9(9) and 9(10) of the SAPI Regulations concerning Privileges and Immunities of persons performing missions for a Specialized Agency does not provide for the exemption from taxation on salaries and emoluments provided by item 2A of Part I of the Fifth Schedule. for persons performing missions for the international organisation. From the above, the payments you received in relation to your engagement with the international organisation will only be exempt from income tax if it can be shown that you were a holder of an office (but not a high office) in the organisation when you were undertaking your role. The Commissioner's view on the meaning of office holder The terms 'office' and 'office holder' are not defined by the IOPI Act or the ITAA 1997 and therefore, they take their ordinary meaning.

The Commissioner's view on the meaning of office holder is set out in Taxation Ruling 2025/1 ('the ruling'). As specified in paragraph 27 of the ruling, the term 'office' cannot be defined by reference to permeance or succession. Whether a person holds or performs the duties of an office in an international organisation concerns the relationship between that person and that organisation. Paragraph 31 of the ruling states that a holder of an office may include a person who works as an employee of an international organisation, but it does not include a person (whether an employee or not) who is: •                     locally engaged and paid an hourly rate, or •                     engaged as an expert or consultant. Paragraph 32 of the ruling states that whether someone is an office holder is a question of fact, considered on a case-by-case basis. Paragraph 29 provides that there are six criteria for determining whether a person can be said to hold an office in an international organisation: •                     Four positive criteria

-                    a position to which certain duties attach - the office must exist within the international organisation regardless of the individual who occupies the office from time to time, that is if an individual vacates that office, the office continues to exist to be filled by another individual -                    duties relating to the performance of the organisation's functions - the office must have identifiable duties, functions and responsibilities or powers -                    a level of authority with respect to the organisation -                    the position of the person within the international organisation, and the duties and authority associated with it, should make it apparent why the privileges and immunities are conferred. •                     Two negative criteria, the presence of which would indicate the person is not an office holder -                    the position places the person outside the organisational structure -                    the position does not provide the person with any defined duties or authority with respect to the organisation and its functions - for example, the role is merely an advisory function.

The following example of an office holder is included at paragraph 34 of the ruling: Chris is employed by an organisation that is an international organisation covered by the IOPI Act (as per the Regulations for that organisation). The Regulations provide that income received from the organisation by an office holder of the organisation is income tax exempt and that there are no further conditions or particulars that apply to that exemption. Chris leads a team that provides ongoing professional advice the organisation relies on to carry out its core functions. Chris has significant organisational responsibilities and functions, including developing organisational strategy and managing employees. He is also able to engage and enter contracts and make financial commitments on behalf of the organisation. If Chris was to leave the organisation, the vacancy would be filled as there is an ongoing need for the responsibilities and functions that he undertakes to continue to be performed. Chris is a person who is an office holder for the purposes of the IOPI Act. The case law on the meaning of office holder

In determining who is an office holder, it is not enough to simply be an employee and thereby be regarded as an office holder. An office holder is someone who has identifiable duties, functions, responsibilities or powers to carry out. It does not include an employee who is merely following the command of a higher ranking person. This does not take away from the fact that an office holder may be an employee; it illustrates however that a person who is an employee is not necessarily or automatically to be taken to be an office holder. As discussed in paragraphs [31] and [34] of Jayasinghe [2017] HCA 256 (Jayasinghe case), the term 'office' cannot be defined by reference to permanence or succession. Whether a person holds or performs the duties of an office in an international organisation concerns the relationship between the person and that organisation. As per paragraph [37] of the Jayasinghe case, the substance of the terms of the engagement of the person and the relationship between that engagement and the organisation's performing its functions must be considered. Whether someone is an office holder is a question of fact, considered on a case by case basis.

It should be clear from the duties and authority associated with the person's position within the international organisation why the privileges and immunities are conferred. As per paragraph [38] of the Jayasinghe case, a person is unlikely to be an 'office holder' if their terms of engagement place them outside the organisational structure and do not include defined duties or authority in relation to the organisation and its functions. This is consistent with the purpose of the IOPI Act to confer privileges and immunities to assist organisations to perform their functions, rather than to personally benefit persons connected with the organisation (see paragraph [39] of the Jayasinghe case and paragraph [54] of Macoun v. FCT (2015) 257 CLR 519). In Edwards v. Clinch [1982] AC 845 it was held that an office was a position of authority to which duties and functions are attached; an independent post, with some degree of permanence, to which successive people can be appointed. In Federal Commissioner of Taxation v. Sealy (1987) 19 ATR 582 at 286; 87 ATC 5076, which concerned a managing partner of a grazing partnership, Pincus J said:

The word office has a range of meanings. In some contexts, it refers to a position of authority in a governmental or other public organisation. It is difficult to think of any reason why the legislature should have intended to confine the concession to instances in which the terminated position is one of a public character or of any high degree of permanency. Presumably, no one would dispute that the position of managing director of a public company could be regarded as an office. In AAT Case 8603 93 ATC 148; 25 ATR 1082, Deputy President BJ McMahon dealt with the case of a taxpayer who had been an Inspector of Schools and who became (when that position phased out) a Cluster Director. Paragraphs [14] and [15] read as follows: 14. The word "office" is a word that had been considered in many cases, but no satisfactory definition has emerged. As was pointed out in Grealy's case [ Grealy v. Commissioner of

Taxation (1989) 24 FCR 405; (1989) 20 ATR 403; (1989) 89 ATC 4192] the word usually connotes a position of defined authority in an organisation, such as a director of a company, or a tertiary education body. Their Honours held (at 4197 column 2) that it was not a word normally applicable to a relatively low-level employee, such as a university lecturer. As the court observed the applicant, like many holders of professional employment, is not made an office holder merely because her position has a name. 15. This view was consistently taken by the Boards of Review. For example, in Case K4, 78 ATC 29 [(1978) 22 CTBR (NS) 212], Mr Dempsey suggested that an office connotes something more than substantial, something more in the nature of a continuing executive position, the holder of which has distinct responsibilities. In Grealy's case itself, their Honours noted that the word "office" usually connoted a position of defined authority. [additional case citations added]

AAT Case 12,178 (1997) 97 ATC 407; (1997) 37 ATR 1174 concerned a taxpayer who received a payment in respect of unused sick leave when he resigned from his position as a Branch Manager after having successfully won a position of Division Director for the same employer (a local council). In determining the case, one of the issues raised was whether the taxpayer was the holder of an office and whether a retirement or termination had occurred. In that case, Senior Member J Block stated: The test as to whether a position is an office will no doubt usually be one involving questions of fact and degree... In his findings, Senior Member Block also referred to a few previous cases which looked at the issue of office and at (ATC) 421; (ATR) 1189, he made the following observation: In Great Western Railway Co v. Bater [1920] 3 KB 266 Rowlett J had held that an office was "a subsisting, permanent, substantive position which had an existence independent of the person who filled it, which went on and was filled in succession by successive holders".

I consider, with respect, that the meaning attributed to the term "office" by Deputy President Thompson in W31 [Case No VT 87/3438 (1989) 20 ATR 3509; (1989) 89 ATC 307] is for Australian purposes, correct. That test would require that it is a position to which "duties are attached, especially a place of trust, authority or service under constituted authority". It is thus clear that the restricted UK view is narrow, when contrasted with the less restricted Australian approach. [additional case citations added] Convention on the Privileges and Immunities of the Specialized Agencies 1948 A number of High Court decisions make it clear that Australian law only incorporates treaties to the extent that the provisions of the treaty have been incorporated into Australian domestic law. In Simsek v. Macphee 148 CLR 636; [1982] HCA 7 (the Simsek case) Stephen J established the position that provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into Australian domestic law by statute. The legal effect of international treaty provisions in Australian law was contemplated in the

High Court in CPCF v. Minister for Immigration and Border Protection [2015] HCA 1 at [488] to [491] where Gagelar J stated (relevant footnotes citing further cases on the matter are also reproduced): 488. The plaintiff contended that, if the Court were to hold that a non-statutory executive power to prevent persons from entering Australia does exist, then that power was abrogated by the Act and the Migration Act, both of which were said to operate as part of a single statutory scheme, displacing any non-statutory executive power with respect to the exercise of power concerning immigration into Australia. 489. In Ruddock v Vadarlis, the Full Court of the Federal Court of Australia held, by majority, that the Migration Act did not abrogate executive power in this regard. The plaintiff argued that that case was wrongly decided. That argument should be rejected.

490. Powers exercisable by the Executive government under the common law are not limited by international law obligations not incorporated into domestic law. The provisions of an international treaty to which Australia is a party do not form part of Australian law unless those provisions have been validly incorporated into our municipal law by an Act of the Commonwealth Parliament. In point of constitutional principle, an international treaty made by the Executive government can operate as a source of rights and obligations under our municipal law only if, and to the extent that, it has been enacted by the Parliament. It is only the Parliament that may make and alter our municipal law. 491. In Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam, McHugh and Gummow JJ observed that: "in the case law a line has been drawn which limits the normative effect of what are unenacted international obligations upon discretionary decision-making under powers conferred by statute and without specification of those obligations... [S]uch obligations are not mandatory relevant considerations attracting judicial review for jurisdictional error." (emphasis added)

The issue was also considered, and the earlier principle established by the High Court was applied by the High Court in NAGV and NAGW and Minister for Immigration and Multicultural and Indigenous Affairs & Anor [2005] HCA 6 where in a joint judgement Gleeson CJ, McHugh J, Gummow J, Hayne J, Callinan J and Heydon J stated: However, in Simsek v Macphee (1982) 148 CLR 636 at 641-643, Stephen J applied the accepted general preposition that in the absence of legislation the Convention had no legal effect in Australian municipal law upon the rights and duties of individuals and of the Commonwealth.... Furthermore, Parliament may not accept or only partly accept the terms of a treaty (or convention which is a treaty) which means that not all of the treaty may be enacted into law. This was recognised in Plaintiff M47/2012 v. Director General of Security [2012] HCA 46 (the Plaintiff M47/2012 case) where Heydon J stated:

Those submissions may be accepted for the purpose of the proceedings. However, the legislature may well decide not to adopt the whole of a treaty that the Executive has entered. "[T]he purposes of international instruments are not necessarily to be pursued at all costs. The purpose of an instrument may instead be pursued in a limited way, reflecting the accommodation of differing viewpoints, the desire for limited achievement of objectives, or the constraints imposed by limited resources. The authorities which the plaintiff relied on did not state that the Act gives effect to the whole of the Convention. It is notorious that it does not. The relevant question is what the Act provides, not the Convention.

Therefore, in order to determine whether income received from the international organisation is exempt income for the purposes of the IOPI Act, it is necessary to apply the domestic law that has been enacted. It is not appropriate to conclude that an amount is to be regarded as exempt income in Australia through accession to the treaty. This is particularly so, because as per the Plaintiff M47/2012 case a choice may have been made by Parliament to only partly accept (and enact) the terms of a treaty. Enacting can include legislating a new Act or putting in place subordinated legislation, such as Regulations to an existing Act, to give effect to a treaty.

The IOPI Act is Commonwealth law that implements Australia's obligations under international treaties to which the Australian government has agreed and ratified. To the extent that it has been enacted through the SAPI Regulations, this includes the UN Convention on the Privileges and Immunities of the Specialized Agencies, together with Annex IV (the Specialized Agencies Convention) which was adopted by the General Assembly of the United Nations on 21 November 1947 and acceded to by Australia on 9 May 1986. This is acknowledged by the Explanatory Statement to Statutory Rules No. 67, 1986 (being the original SAPI Regulations) which states: 2. In December 1985 the Government decided that Australia would accede to the Convention on the Privileges and Immunities of the Specialized Agencies in respect of the specialized agencies covered by the Convention, and that it should accept the Agreement on the Privileges and Immunities of the International Atomic Energy Agency, without reservations. It also decided to make regulations under the Act to give full effect to Australia's obligations under the two agreements.

3. The purpose of these Regulations is to give effect to that decision, and to make certain necessary consequential changes to other regulations. Details are set out in Attachment A. As established by Stephen J of the High Court in the Simsek case and accepted by the High Court in many other cases since, what matters in these cases is what the domestic law provides. The courts are not bound by the text of the treaties in any way. Application to your circumstances Were you an office holder? As noted in the paragraphs above, the word 'office' connotes a position of defined authority in an organisation, such as a director of a company or the president of a club. The holder of a professional employment is not an office holder merely because the position has a name. An office holder's position is more than something which is important or substantial within an organisation. In your case, your role with the organisation involved such activities as: •                     contributing as part of a team and lead teams and undertake work alone, to prepare concepts, information notes, briefs, proposals, review and analysis and normative materials and publications

•                     Representing the organisation at official meetings, workshops and consultations, Resulting in the development, design, planning and functioning of the group and working groups. Consequently, from the information provided, it is considered that you were not an 'office holder' in respect of the role you had with the organisation because you: •                     were not a direct employee of the organisation but a contractor under a personal services agreement •                     while you had subordinates, you did not have the required level of authority in relation to decision making in the organisation or managing the operations of the organisation. •                     you were engaged as an expert/consultant for a finite period to complete various tasks as outlined in the Terms of reference document in line with the key performance indicators (expected outputs). •                     your work assignment was more aligned to providing technical support and input, developing resources, and supporting management, in an advisory capacity.

•                     your income payments are paid via a set amount per day, and are conditional upon certification of days worked and satisfactory completion of the assignment. Therefore, as you were not an officer holder of an international organisation, the payments you received are not exempt income under paragraph 6(1)(d) of the IOPI Act. Does the Convention on the Privileges and Immunities of the Specialized Agencies 1948 exempt your income from taxation in Australia? You have provided correspondence from the organisation which states that you are an 'official' of the organisation for the purposes of Article VI of the Convention on the Privileges and Immunities of the Specialized Agencies 1948 . However as previously explained above, Australian law only incorporates treaties to the extent that the provisions of the treaty have been incorporated into Australian domestic law, which has not occurred in respect of the Convention on the Privileges and Immunities of the Specialized Agencies 1948 .

The IOPI Act and SAPI Regulations are the domestic law that must be reviewed to determine whether the payments that you have received from the organisation are exempt income. This has been addressed above. As found there the payments that you have received are not exempt income either on the basis that you are an office holder or that the income is exempt on the basis that you are an expert or consultant of the organisation. They would also not be exempt under any other provision of the IOPI Act and SAPI Regulations. As your income is not exempted from taxation in Australia under the IOPI Act or any other Australian law, income you receive from the organisation for providing services as a consultant will be assessable under section 6-5 of the ITAA 1997.