Assessability of Swedish superannuation pension received by an Australian resident

Is a Swedish superannuation pension received by an Australian resident taxpayer assessable under section 27H of the Income Tax Assessment Act 1936 (ITAA 1936)?

Yes. A Swedish superannuation pension received by the Australian resident taxpayer is assessable under section 27H of the ITAA 1936.

The taxpayer is a resident of Australia for income tax purposes.

The taxpayer receives a superannuation pension from Sweden.

The superannuation pension is paid under a private superannuation plan.

The pension is not paid by the Swedish government or under the Swedish Social Security Scheme.

Section 6-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a taxpayer's assessable income includes statutory income amounts which are not ordinary income but are included in assessable income by another provision. Subsection 6-10(4) of the ITAA 1997 states that the assessable income of an Australian resident, includes statutory income from all sources, whether in or out of Australia.

Section 10-5 of the ITAA 1997 lists the provisions about assessable income. Included in this list is section 27H of the ITAA 1936 which provides that annuities and superannuation pensions are included in assessable income.

In determining liability to Australian tax of foreign sourced income received by a resident it is necessary to consider not only the income tax laws but also any applicable double tax agreement contained in the International Tax Agreements Act 1953 (the Agreements Act).

Section 4 of the Agreements Act incorporates that Act with the ITAA 1936 and ITAA 1997 so that those Acts are read as one. The Agreements Act effectively overrides the ITAA 1936 and ITAA 1997 where there are inconsistent provisions (except for some limited provisions).

Schedule 17 to the Agreements Act contains the double tax agreement between Australia and Sweden (the Swedish Agreement).

Article 18 of the Swedish Agreement specifies how pensions and annuities are to be taxed. Subject to Article 18(3), Article 18(1) of the Swedish Agreement provides that pensions and annuities paid to a resident of Australia shall be taxable only in Australia.

Article 18(3) of the Swedish Agreement provides that pensions paid by to a Swedish citizen in respect of services rendered to Sweden and pensions paid under the Swedish Social Security Scheme may be taxed in Sweden.

The taxpayer's pension is paid under a private superannuation plan, therefore Article 18(3) of the Swedish Agreement does not apply.

The Swedish superannuation pension received by the Australian resident taxpayer is therefore included in the taxpayer's assessable income under section 27H of the ITAA 1936 and forms part of the taxpayer's statutory income under subsection 6-10(4) of the ITAA 1997.