Blank v Commissioner of Taxation (No 2)

In Blank v Commissioner of Taxation (No 2), the respondent sought a review of a decision of the Full Court of the Federal Court of Australia. The dispute centred on whether certain payments made to the applicant constituted "foreign earnings" exempt from tax under section 23AG of the Income Tax Assessment Act 1936 (Cth). The primary issue for the court was whether the definition of "foreign earnings" in section 23AG(7) could be applied to the term "earnings" in section 23AG(1). A secondary issue was whether the court could ascribe to the Commissioner's acceptance of apportionment of earnings as between foreign and non-foreign service as proposed by the applicant.

The court held that the term "earnings" in section 23AG(1) was not defined by the term "foreign earnings" in section 23AG(7). The court found that the exemption created by section 23AG(1) required the foreign earnings to be derived exclusively from foreign service. The court rejected the applicant's argument that the exemption applied where the earnings were derived from both foreign and non-foreign service. The court also held that it was unnecessary to consider the Commissioner’s acceptance of apportionment where earnings were for foreign service and for service that was not foreign service. The court found that the Full Court's conclusion that no error of law had infected the reasoning of the primary judge made it unnecessary to consider the Commissioner’s acceptance of an apportionment principle.

The appeal was dismissed.