United Nations Peacekeeping Force - United Nations tax offset

Is the resident taxpayer who earned salary and wage income while serving in a foreign country with a United Nations Peacekeeping Force, entitled to a United Nations tax offset under section 23AB of the Income Tax Assessment Act 1936 (ITAA 1936)?

Yes. The resident taxpayer who earned salary and wage income while serving in a foreign country with a United Nations Peacekeeping Force is entitled to a United Nations tax offset under section 23AB of the ITAA 1936.

The taxpayer is a resident of Australia for tax purposes.

The taxpayer was an employee serving with a United Nations Peacekeeping Force in a foreign country for a continuous period in excess of 183 days.

The taxpayer is not a member of the Australia Defence Force (ADF).

The taxpayer is a 'prescribed taxpayer' as defined in Regulation 6 of the Income Tax Regulations 1936.

The income is exempt from tax in the foreign country but is included in the taxpayer's assessable income in Australia.

Subsection 23AB(7) of the ITAA 1936 provides a tax offset to a 'prescribed taxpayer' in respect of income in a year of income in which they: • have performed United Nations service; and • derived income by way of salary, wages or other allowances in respect of that service.

'United Nations service' is defined in subsection 23AB(1) of the ITAA 1936 to mean service, other than as a member of the ADF, performed: • at the direction or with the approval of the Commonwealth; • outside Australia with an armed force under the control of the United Nations; and • at a time when the person performing the service was a prescribed taxpayer.

A 'prescribed taxpayer' means a resident taxpayer who is included in a class of persons that is prescribed by the Regulations for the purposes of section 23AB of the ITAA 1936 (subsection 23AB(1) of the ITAA 1936).

Regulation 6 of the Income Tax Regulations provides that the following classes of persons are prescribed taxpayers for the purposes of section 23AB of the ITAA 1936: • members of the Australian Federal Police who are members of the force, created by the United Nations, for keeping peace in Cyprus; • members of the Australian Federal Police performing service with the United Nations Operation in Mozambique in the period from 27 March 1994 to 10 December 1994 (inclusive); • members of the Australian Federal Police performing service with the Multinational Force in Haiti in the period from 5 November 1994 to 21 March 1995 (inclusive); and • Australian residents serving with UNTAET in East Timor on or after 23 February 2000. UNTAET means the United Nations Transitional Administration in East Timor established by the United Nations Security Council on 25 October 1999 (Subregulation 6(2) of the Income Tax Regulations).

Where a 'prescribed taxpayer' has served for more than one half of the year of income, paragraph 23AB(7)(a) of the ITAA 1936 provides that the tax offset allowable is equal to the sum of $338 and 50% of any of the tax offsets listed in subparagraph 23AB(7)(a)(ii) of the ITAA 1936 to which the taxpayer is entitled.

The taxpayer is a member of a prescribed class of persons listed in Regulation 6 of the Income Tax Regulations and is therefore a 'prescribed taxpayer' for the purposes of the United Nations tax offset under section 23AB of the ITAA 1936.

As the taxpayer's period of service was in excess of 183 days, they are entitled to the United Nations tax offset under section 23AB of the ITAA 1936 equal to the sum of $338 and 50% of any tax offsets listed under subparagraph 23AB(7)(a)(ii) of the ITAA 1936 to which the taxpayer is entitled.