6.4 Income earned in Australia

6.4.1 Missions, posts and privileged individuals

Missions and posts do not pay tax on interest earned on official bank accounts in Australia. This exemption also applies to interest earned on government securities, bonds, debentures and distributions from unit trusts.

Home-based diplomatic and consular staff posted to Australia do not pay income tax on their official salaries and allowances, nor on income from sources outside Australia.

Income derived by privileged individuals from sources inside Australia, including bank interest, share market dealings, company dividends and real estate dealings is taxable. If this income is above the income tax free threshold, or if privileged individuals wish to claim deductions on, or refunds of, tax already deducted from this income, they are required to complete and submit an income tax return to the ATO.

Privileged individuals may also apply to the ATO for a Tax File Number, which is required to avoid automatic tax deductions from interest earned on bank accounts and other Australian investments.

Where there is a double taxation agreement in place between Australia and a country, the position of privileged individuals from that country in Australia will also be governed by that agreement.

6.4.2 Locally engaged staff and other Australian citizens or permanent residents

Locally engaged staff (see chapter 10) and other mission or post staff who are Australian citizens or permanent residents are required to pay Australian income tax on their salaries and allowances.
Last Updated: 2 November 2017