Hamilton and Commissioner of Taxation (Taxation)

[2020] AATA 1812

Hamilton and Commissioner of Taxation (Taxation) [2020] AATA 1812 (4 June 2020)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      2018/6843

Re:Stuart Hamilton

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe
Senior Member Linda Kirk

Date:4 June 2020

Place:Canberra

The decision under review is affirmed.

....................................[sgd]....................................

Deputy President Bernard J McCabe

CATCHWORDS

TAXATION – whether income from IMF exempt from Australian income tax – does the applicant hold an office in an international organisation – does the applicant hold an office within a specialised agency – Revenue Administration Adviser of the IMF – short term assignments – application of the test in Jayasinghe – do the positive and negative criteria in Jayasinghe apply – decision affirmed

LEGISLATION

Income Tax Assessment Act 1936 s 166

International Monetary Agreements Act 1947
International Organisations (Privileges and Immunities) Act 1963 ss 6 , Sch 4, Sch 5
Specialized Agencies (Privileges and Immunities) Regulations 1986 regs 2, 3, 8, 9
Taxation Administration Act 1953 s 14ZZK

United Nations (Privileges and Immunities) Regulations 1986 reg 10

CASES

Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Limited (2007) 158 FCR 325

Commissioner of Taxation v Jayasinghe (2017) 260 CLR 400

CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514

SECONDARY MATERIALS

Convention on the Privileges and Immunities of the United Nations

Handbook for Short-Term Expert Appointments
Taxation Determination TD 92/53
Taxation Determination TD 92/153
Taxation Ruling TR 92/14

UN Convention on the Privileges and Immunities of Specialised Agencies

REASONS FOR DECISION

Deputy President Bernard J McCabe
Senior Member Linda Kirk

4 June 2020

1. Australian officeholders in some transnational non-governmental organisations (NGOs) like the International Monetary Fund (IMF) are entitled to certain privileges and immunities – including, in some cases, an exemption from the obligation to pay Australian taxes on income derived from those entities. The Applicant in this case, Mr Stuart Hamilton, was engaged to undertake work by the IMF in 2017 and 2018. He was paid for that work. He says he is entitled to the exemption from income tax available to officeholders in the IMF. His argument relies on his interpretation of the International Organisations (Privileges and Immunities) Act 1963 (the IOPI Act) and regulations made under that statute. He also relies on public rulings issued by the Commissioner of Taxation (‘the Commissioner’). For his part, the Commissioner denies the exemption from income tax is available to Mr Hamilton.

2. The Commissioner is right. Mr Hamilton is not exempt from paying income tax. We explain our reasons for that conclusion below.

   BACKGROUND TO THE REVIEW

3. The Applicant is a chartered accountant. He was employed in the Australian Taxation Office for 32 years. He developed particular expertise and experience in the compliance sphere. He retired in 2014 and has since worked part-time on a series of assignments with the IMF providing advice to IMF member state governments.[1] The Applicant explained to the Tribunal that he successfully applied to the IMF to be placed on its Roster of Experts from which the IMF appoints people for assignments.[2] The Roster of Experts is a pool of regular technical assistance contractual employees used by the IMF to meet the variable demands of member states for their technical assistance, primarily in the form of IMF advice that is provided in written reports to the member state government.[3] Experts are asked to update their details every four years or so.[4] The Applicant has an IMF employee identification number and has the protection of the IMF’s workers compensation insurance.[5]

   [1] Transcript, pp 5-6.

   [2] Transcript, p 6; Statement of Agreed Facts 35.2.

   [3] Applicant’s Statement of Facts, Issues and Contentions, at [43].

   [4] Transcript, pp 6-7.

   [5] Transcript, p 17.

4. By letter dated 16 October 2017, the Applicant was offered an appointment as a Revenue Administration Adviser of the IMF.[6] The appointment was for a total of 24 days, from 6 November 2017 to 22 November 2017. The receiving institution was the Ministry of Finance, Moldova (‘the Moldova appointment’). The Applicant was entitled to remuneration of US$791 a day (net). He was under the sole direction of the IMF and reported to the Fiscal Affairs Department of that organisation (‘FAD’). Payment of the Applicant’s remuneration was made on completion of the appointment to the satisfaction of the FAD and the submission of all required documentation. The terms and conditions of the Moldova appointment were those appearing in the letter of appointment and the administrative procedures, rules, benefits and services generally available to Short-Term Experts in the IMF as described in the Handbook for Short-Term Expert Appointments (‘the Handbook’).

   [6] T13, p 130.

5. On 8 February 2018, the Applicant was offered a further appointment as a Revenue Administration Adviser of the IMF.[7] The appointment was for a total of 20 days from 28 February 2018 to 12 March 2018. The receiving institution was the Ministry of Finance, Armenia (‘the Armenia appointment’). The Applicant was entitled to remuneration of US$791 a day (net) payable at the completion of the appointment to the satisfaction of the hiring department and the submission of all required documentation. The Applicant was under the sole direction of the IMF and reported to the FAD. The terms and conditions of the Armenia appointment were those appearing in the letter of appointment and the administrative procedures, rules, benefits and services generally available to Short-Term Experts in the IMF as described in the Handbook.

   [7] T13, p 134.

6. The IMF described the position and duties of experts on short term assignments as follows:[8]

   Types of assignments

   IMF short term TA [technical assistance] assignments usually involve participation in headquarters-led diagnostic missions of one to two weeks, or standalone short term assignments of up to one month to provide hands on advisory assistance to country authorities. Occasionally, experts are sought for longer-term assignments in a country. …

   Duties of experts during TA assignments

   The expert who participates in a diagnostic mission will be expected to: prepare for the mission by reading relevant documents prior to the mission, and in some instances through a pre-briefing at IMF headquarters for 2-3 days, depending on the location of the expert and the mission site; participate fully in discussions with national authorities in his/her area of expertise; write sections of the draft TA report that is prepared and submitted to the authorities while the TA mission is in the field; and contribute to the team effort as directed by the mission head. Duties after the mission are usually not extensive, but the expert would be expected to respond to e-mails that may request certain limited follow up work from the expert’s home.

   [8] T14, pp 195-196.

7. The Handbook provided the appointment was terminable by either the IMF or the Applicant, with or without cause, on one day’s notice.[9] It also said:

   “[a]ll experts of the Fund are entitled to the privileges and immunities accorded to the Fund under Article IX of its Articles of Agreement [including] … immunity from payment of income tax on their IMF remuneration’.[10]

   [9] Part XIV, T13, p 159.

   [10] Part X, p 156; see also, Part IV, p 143.

8. The Handbook also noted that where the Applicant’s remuneration was quoted on a net basis, if the Applicant was liable for payment of national income tax on his remuneration, he may be eligible to receive a tax allowance.[11]

   [11] Part IV, p 144.

9. During the 2018 income year, the Applicant derived income of $43,787 from the IMF for the Appointments (‘IMF income’). The Commissioner says the IMF income should be included in the Applicant's assessable income in that year. The Applicant objected but was unsuccessful. The Applicant has asked the Tribunal to review the objection decision.

   LEGISLATIVE FRAMEWORK

   International Organisations (Privileges and Immunities) Act 1963 (Cth) (‘IOPI Act’)

10. Section 6 of the IOPI Act empowers the making of regulations conferring on certain persons and entities privileges and immunities. In particular, s 6(1)(d)(i) of the IOPI Act empowers the making of regulations conferring (emphasis added):

    upon a person who holds an office in an international organisation to which this Act applies (not being an office prescribed by the regulations to be a high office) all or any of the privileges or immunities specified in Part I of the Fourth Schedule.

11. Section 6(1)(e)(i) of the IOPI Act empowers the making of regulations conferring:

    upon a person who is serving on a committee, or is participating in the work, or an international organisation to which this Act applies, or is performing, whether alone or jointly with other persons, a mission on behalf of such an organisation all of the privileges and immunities specified in Part I of the Fifth Schedule.

12. Paragraph 2 of Part I of the Fourth Schedule to the IOPI Act identifies a number of ‘[p]rivileges and immunities of Officers of International Organisation’, including an ‘[e]xemption from taxation on salaries and emoluments received from the organisation’.

13. Paragraph 2A of the Fifth Schedule to the IOPI Act identifies as one of the privileges and immunities in that schedule an ‘[e]xemption from taxation on salaries and emoluments received from the organisation’.

    Specialized Agencies (Privileges and Immunities) Regulations 1986 (Cth) (‘SAPI Regulations’)

14. Regulation 2 (definition of ‘Specialized Agency’) and Regulation 3 of the SAPI Regulations and item 5 of the Schedule to the SAPI Regulations identifies the IMF as a ‘Specialized Agency’ and an international organisation to which the IOPI Act applies. Regulation 8(1) of the SAPI Regulations provides as follows (emphasis added):

    Subject to subregulation (2), a person who holds an office in a Specialized Agency, other than a person who holds, or is performing the duties of an office specific in column 3 of an item in the Schedule, has the privileges and immunities specified in Part I of the Fourth Schedule to the Act.

15. Regulation 9(1) of the SAPI Regulations provides as follows:

    A person who is serving on a committee of a Specialized Agency to which this subregulation applies or is performing, whether alone or jointly with other persons, a mission on behalf of such a Specialized Agency has the privileges and immunities specified in paragraphs 1, 2, 3, 4, 5 and 6 of Part I of the Fifth Schedule to the Act.

16. Regulation 9(2) states that subregulation (1) applies to six identified international organisations. The IMF is not named as one of the six organisations.

17. Regulations 9(3) – (8) confer certain identified privileges and immunities specified in the Fifth Schedule of the IOPI Act on persons who serve on committees or perform missions on behalf certain Specialized Agencies. None apply to the IMF and none confer the immunity in paragraph 2A of the Fifth Schedule of the IOPI Act.

    Taxation Ruling TR 92/14 and Taxation Determination TD 92/53

18. Section 358-5 of Schedule 1 of the Taxation Administration Act 1953 (‘Administration Act’) empowers the Commissioner to make a written ruling on the way in which the Commissioner considers a relevant provision generally applies, or would apply, to a class of entities. A ruling binds the Commissioner in relation to a taxpayer (whether or not the taxpayer is aware of the ruling) if the ruling applies to the taxpayer and the taxpayer relies on the ruling by acting (or omitting to act) in accordance with it (s357-60, Schedule 1 of the Administration Act).

19. Both TD 92/153 and TR 92/14 (as they applied at the time) were “public rulings” within the meaning of Div 358 of Schedule 1 of the Administration Act.

20. TD 92/153 states at [3] that: ‘[a]s a practical matter, if the international organisation designates a person as one who holds an office in that organisation, we will accept, in absence of contrary evidence, that this designation is sufficient evidence of the status of the person’.

21. TR 92/14 states at [16] that ‘[d]ocumentary evidence would be satisfied by a statement from the relevant Information Organisation indicating that a person is engaged by that organisation and the relevant capacity in which the person is engaged (High Office, consultant, etc)’.

    ISSUES FOR DETERMINATION

22. The Applicant objected to the Assessment on the basis that the IMF income should be excluded from his assessable income for the 2018 income year for three reasons:

    ·Section 6(1)(d)(i) and Item 2 of Part I of the Fourth Schedule of the IOPI Act and Regulation 8(1) of the SAPI Regulations made the IMF income exempt from income tax;

    ·Section 6(1)(e)(i) and Item 2A of Part I of the Fifth Schedule of the IOPI Act and Regulation 9 of the SAPI Regulations made the IMF income exempt from income tax; or

    ·The Commissioner was bound by TD 92/153 and TR 92/14 to treat the IMF income as income exempt from income tax.

23. The Commissioner correctly identified the following three issues as arising from the Applicant’s application for review of the Objection Decision:

    (a)Is the Applicant entitled to the immunity in s6(1)(d)(i) and Item 2 of Part I of the Fourth Schedule of the IOPI Act and Regulation 8(1) of the SAPI Regulations for reason that he held ‘an office in an international organisation’ or held ‘an office within a Specialized Agency’?[12]

    (b)Is the Applicant entitled to the immunity in s6(1)(e)(i) and Item 2A of Part I of the Fifth Schedule of the IOPI Act and Regulation 9 of the SAPI Regulations which made the IMF income exempt from income tax?[13] and

    (c)Is the Commissioner bound by TD 92/153 and TR 92/14 to treat the IMF income as income exempt from income tax?[14]

    [12] Commissioner’s Statement of Facts, Issues and Contentions, [18]ff.

    [13] Ibid, [23]ff.

    [14] Ibid, [26]ff.

24. In his Statement of Facts, Issues and Contentions, the Applicant raised two other issues:

    ·Does the Commissioner have the ‘authority to make a legal decision’ on the application of the IOPI Act and the SAPI Regulations to the Applicant’s facts and circumstances?[15]

    ·Will including the IMF income in the Applicant’s taxable income cause Australia to be in breach of international instruments?[16]

    [15] Applicant’s Statement of Facts, Issues and Contentions, [1].

    [16] Ibid, [5].

25. We will address each of those issues in turn below.


    Is the Applicant entitled to the immunity in s6(1)(d)(i) and Item 2 of Part I of the Fourth Schedule of the IOPI Act and Regulation 8(1) of the SAPI Regulations for reason that he held ‘an office in an international organisation’ or held ‘an office within a Specialized Agency’?

26. Both parties accept that the proper construction of the phrase ‘hold an office in an international organisation’ in s6(1)(d)(i) of the IOPI Act was authoritatively stated by the High Court in Commissioner of Taxation v Jayasinghe (2017) 260 CLR 400 (‘Jayasinghe’). They differ in relation to the application of the test enunciated by the High Court in Jayasinghe to the Applicant’s circumstances.

27. Mr Jayasinghe was a civil engineer engaged by the United Nations Office for Project Services (‘UNOPS’) under an Individual Contractor Agreement to deliver specialist services relating to the construction of a road in the Sudan. The issue before the Court was whether Mr Jayasinghe was entitled to an immunity from taxation on his income earned in that position by reason of s6(1)(d)(i) of the IOPI Act and Regulation 10(1) of United Nations (Privileges and Immunities) Regulations 1986 (Cth) (‘UN Regulations’). Regulation 10(1) of the UN Regulations was in substantially the same form as Regulations 8(1) of the SAPI Regulations. The High Court held Mr Jayasinghe was not entitled to the immunity under s6(1)(d)(i) of the IOPI Act and Regulation 10(1) of the UN Regulations.

28. The plurality (Kiefel CJ, Keane, Gordon and Edelman JJ) emphasised that although the word ‘office’ is general word, it ‘must not be read in isolation; it must be read in context’ of s6(1) of the IOPI Act: at [31]. The plurality rejected the contention that the phrase ‘holds an office in an international organisation’ could be defined by reference to permanence or succession. They also rejected the contention that it could be defined by the characterisation or label attached to the position by the international organisation at [37]. The plurality observed at [37]-[38] (emphasis added):

    [37]… In ascertaining whether a person "holds an office in" an international organisation, s6(1)(d)(i) is concerned with the incidents of the relationship between a person and an international organisation. It focuses on the substance of the terms upon which a person is engaged – not whether the relevant organisation has attributed a particular label to the engagement – and on the relationship between that engagement and the organisation's performance of its functions.

    [38] The phrase "a person who holds an office in an international organisation" directs attention to the structure of the organisation and the place of the person within it. The holder of an "office" in such an organisation may be expected to have a position to which certain duties attach, duties relating to the performance of the organisation's functions and 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 render explicable why the privileges and immunities are conferred. By comparison, a person whose terms of engagement place them outside the organisational structure, and do not provide that person with any defined duties or authority with respect to the organisation and its functions, could hardly be said to hold an office within the organisation.

29. The plurality identified six reasons leading to the conclusion that Mr Jayasinghe did not ‘hold an office in an international organisation’ for the purposes of s6(1)(d)(i) of the IOPI Act. At [42]:

    (a)he was engaged in a specific task in an individual capacity and not to deliver a core function;

    (b)he was paid a monthly fee on certification of his work by his project manager;

    (c)he served in an individual capacity and had no authority or other right to enter into any legal or financial commitment or incur any obligations on behalf of UNOPS;

    (d)he was not considered an ‘official of the UN’ for the Convention on the Privileges and Immunities of the United Nations (adopted on 13 February 1946 (‘1946 UN Convention’)), but was considered an ‘expert on mission’ for the purposes of s22 in Article VI of the 1946 UN Convention;

    (e)he was responsible for paying any tax levied by the Australian Government on his UNOPS earnings;

    (f)he was solely liable to third parties for negligence arising from his acts or omissions.

30. Gageler J delivered a concurring judgment. He observed that an ‘office’ for the purposes of s6(1)(d)(i) of the IOPI Act is a ‘position which exists within the organisational structure of the international organisation’: at [65]. He added that an office ‘exists independently of the person who from time to time might hold it’ and ‘an office is a position to which duties attach’: at [66]. His Honour agreed with the analysis of the plurality in relation to the reasons which led to the conclusion that Mr Jayasinghe was not a person who held ‘an office in an international organisation’ for the purposes of s6(1)(d)(i) of the IOPI Act at [69].

31. The Applicant in this case contends Jayasinghe does not “create a judicial straightjacket for what the term ‘holds office’ might mean for differing international organisations using different working approaches for different international conventions applied to different fact patterns.”[17] He argues the facts in Jayasinghe are distinguishable.[18] Mr Jayasinghe was engaged to perform a specific task to deliver a specific piece of work: the completion of a road, and upon certification of his services he was paid on a monthly basis. There are ‘no international state secrets’ in completing this task,[19] and nothing that would normally attract diplomatic immunity.[20] Mr Jayasinghe was engaged with a legal status of an independent contractor. He was solely responsible for claims and responsible for paying any tax.[21]

    [17] Applicant’s Outline of Written Submissions, [43]; Transcript, p 13.

    [18] Ibid, [45].

    [19] Transcript, p 16.

    [20] Ibid, p 20.

    [21] Ibid, pp 16-17.

1. By contrast the Applicant was employed as an official of the IMF to provide a core IMF function of technical assistance.[22] The Applicant is paid by the IMF on a day’s work regardless of output.[23] The daily rate increases annually without negotiation by the Applicant. There are none of the features that would be expected of an independent consultant relationship.[24] The Applicant had the legal status of an official of the IMF and was recognised as such in the IMF delegation.[25] The IMF met all financial costs associated with the Applicant’s assignment including hotel, travel and incidental expenses. He was categorised by the IMF as an official and specifically to have the privileges and immunities afforded to UN officials and those of specialised agencies.[26] The Applicant had access to the sensitive documents of IMF member states and to unit level taxpayer data, compliance thresholds and views on policy formulation. He was not liable for any claims by third parties regarding his IMF work.[27] He was ‘specifically and repeatedly instructed’ by the IMF legal department that his income was tax exempt due to the operation of the UN Convention.[28] The fact pattern in Jayasinghe is ‘essentially quite narrowly defined.’[29] He argued there ‘is no substantive correlation between the Jaysinghe fact pattern and that of the Applicant.’[30]

   [22] Applicant’s Outline of Written Submissions, [46].

   [23] Ibid, [46].

   [24] Transcript, p 17.

   [25] Applicant’s Outline of Written Submissions, [46].

   [26] Ibid, [46]; Transcript, p 17.

   [27] Applicant’s Outline of Written Submissions, [46].

   [28] Ibid, [46]; Transcript, p 18.

   [29] Transcript, p 20.

   [30] Applicant’s Outline of Written Submissions, [47]; Transcript, p 18.

2. The Commissioner says Jayasinghe establishes that determining whether the Applicant held ‘an office in’ the IMF by reason of the Appointments depends on the incidents of the relationship between the Applicant and the IMF.[31] It focuses on the substance of the term for which the person is engaged, ‘not whether the relevant organisation has attributed a particular label to the engagement.’[32] The Commissioner says the ‘incidents’ of that relationship are found in the Letters of Appointment dated 16 October 2017 and 8 February 2018 and in the Handbook. The Commissioner argues those documents do not establish a relationship which answers the description of holding ‘an office in’ the IMF in accordance with the decision of the High Court in Jayasinghe. The Commissioner argues the principal criteria identified by the Court in Jayasinghe in determining whether a person holds an office in an organisation is the place of the putative office-holder within the structure of the organisation.  It must be an identifiable office within the structure of the organisation to which defined duties and authorities attach. In this sense, the Commissioner says we must undertake ‘a structural analysis of the organisation.’ The quality of the tasks being performed may inform that structural analysis, but ultimately it is necessary to look at the relevant organisation and consider the person’s place in the hierarchy, and ask if that place meets the characteristics of an office within that structure.[33] The place of a person who has a series of short-term 20-day rolling contracts, terminable at will, to do specific tasks, notwithstanding that the performance of these tasks is within the broader function of the organisation as a whole, does not give the person a role in the structure of the organisation, we were told.[34]

   [31] Transcript, p 36.

   [32] Ibid, p 36.

   [33] Ibid, pp 30, 36.

   [34] Ibid, pp 30, 36 and 39.

3. Our reading of the legislation in light of the High Court’s reasoning Jayasinghe confirms the IMF income was not exempt from income tax by reason of s6(1)(d)(i) and Item 2 of Part I of the Fourth Schedule of the IOPI Act and Regulation 8(1) of the SAPI Regulations. We reach that view because the Applicant did not ‘hold an office in an international organisation’ within the meaning of s6(1)(d)(i) of the IOPI Act.

4. The judgment of plurality in Jayasinghe at [38] identifies six criteria for the assessment of whether an individual can be said to ‘hold an office in an international organisation’ within the meaning of s6(1)(d)(i) of the IOPI Act. The first four may be considered ‘positive’ criteria and the last two ‘negative’ criteria.[35] The holder of an ‘office’ in an international organisation may be expected to have a position exhibiting the following positive criteria:

   (a)a position to which certain duties attach;

   (b)duties relating to the performance of the organisation’s functions;

   (c)a level of authority with respect to the organisation;

   (d)the position of the person within the international organisation and the duties and authority associated with it, should render explicable why the privileges and immunities are conferred.

   [35] Ibid, p 36.

5. By contrast, a person whose terms of engagement meet the following negative criterion would not be the holder of an ‘office’ in an international organisation:

   (a)they place the person outside the organisational structure; and

   (b)they do not provide the person with any defined duties or authority with respect to the organisation and its functions.

6. The incidents of the relationship between the Applicant and the IMF are found in the Letters of Appointment[36] and the Handbook.[37] The Letters of Appointment describe the appointment of the Applicant as a ‘contractual employee’ who will be responsible to and under the ‘sole direction’ of the IMF and report to the FAD. The Appointments were for a short-term period (24 days and 20 days),[38] for a specific task (assignment), and terminable on one day's notice without cause.[39] The Applicant was paid a daily rate for the agreed days on completion of the assignment to the satisfaction of the FAD and on submission of all required documentation.[40] The Applicant contends, and the Tribunal accepts, he was engaged in a ‘core function’ of the IMF in providing technical assistance. However, he was engaged to perform this core function in connection only with specific assignments or ‘missions’ involving the provision of advice and assistance to two Governments and the preparation of a report. He was not engaged in the ongoing discharge of a core function of the IMF.[41] The Applicant had no authority within the IMF; he had no right to enter into any legal or financial commitment or incur any obligations on its behalf.[42] Most significantly, the Appointments did not exist in the organisational structure of the IMF and did not exist independently of the appointment of the Applicant to the relevant assignments.[43] The Appointments did not have ongoing duties attached to them beyond the discharge of the assignment which occasioned the Appointments.[44]

   [36] T13, 130-135.

   [37] Ibid, 138ff.

   [38] Ibid, 130 and 134.

   [39] Commissioner’s Outline of Written Submissions, [22.1]; Transcript, pp 39-40.

   [40] Commissioner’s Outline of Written Submissions, [22.3]; Transcript, pp 39-40.

   [41] Commissioner’s Outline of Written Submissions, [22.2].

   [42] Commissioner’s Outline of Written Submissions, [22.5]; Transcript, p 40.

   [43] Commissioner’s Outline of Written Submissions, [22.6]; Transcript, pp 40-41.

   [44] Commissioner’s Outline of Written Submissions, [22.7]; Transcript, p 41.

7. Having regard to the six criteria identified by the plurality in Jayasinghe, the Appointments meet both of the two negative criteria and only one of the positive criteria in paragraphs 35 and 36 above. The Applicant’s duties related to the performance of the IMF’s core functions, however the Appointments were outside the organisational structure of the IMF and did not provide him with any defined duties or authority with respect to the IMF and its functions. The Appointments did not, as Gageler J recognised in Jayasinghe, exist independently, nor were they ongoing positions to which specific or defined duties attach.

8. The Commissioner concedes that the IMF proceeds on the basis that a person holding the positions to which the Applicant was appointed is entitled to the privileges and immunities arising under Article IX, § 9 of the IMF’s Articles of Agreement[45] and Article VI, § 19 of the UN Convention on the Privileges and Immunities of Specialised Agencies (adopted 21 November 1947) (‘1947 UN Convention’).[46] But the view of an international organisation of the scope of the privileges and immunities conferred by international instruments is not determinative of the scope of the immunities conferred by s6(1)(d)(i) of the IOPI Act and Regulation 8(1) of the SAPI Regulations. The construction and application of the privileges and immunities arising from the IOPI Act and SAPI Regulations by the Commissioner and the Tribunal must be consistent with the approach outlined by the High Court in Jayasinghe.[47]

   [45] T13, p 188.

   [46] see T13, pp 143-144; T13, pp 180-191.

   [47] Commissioner’s Outline of Written Submissions, [23]; Transcript, pp 37-38 and 40.

9. As the Applicant did not by reason of the Appointments hold an ‘office within an international organisation’ within the meaning of s6(1)(d)(i) of the IOPI Act, the IMF income was not exempt from income tax under s6(1)(d)(i) and Item 2 of Part I of the Fourth Schedule of the IOPI Act and Regulation 8(1) of the SAPI Regulations.

   Is the Applicant entitled to the immunity in s6(1)(e)(i) and Item 2A of Part I of the Fifth Schedule of the IOPI Act and Regulation 9 of the SAPI Regulations which made the IMF income exempt from income tax?

10. The Applicant contends that the IMF is a Specialized Agency and therefore he is entitled under s6(1)(e) of the IOPI Act to all of the privileges and immunities in the Fifth Schedule. The Commissioner argues that Regulation 9 of the SAPI Regulations, which applies for the purposes of s6(1)(e)(i) of the IOPI Act, does not assist the Applicant because it does not apply to the IMF nor does it confer the privileges and immunities in paragraph 2A of the Fifth Schedule.

11. We agree with the Commissioner that Regulation 9 does not make the IMF income exempt from income tax. Regulation 9 is narrow in its application and lists in sub-paragraph (2) the organisations to which it extends (Specialized Agencies), and the IMF is not included. Nor does the Regulation confer on persons serving on a committee of, or performing a mission on behalf of Specialized Agency, the immunity in Item 2A of Part I of the Fifth Schedule of the IOPI Act, namely, an ‘[e]xemption from taxation on salaries and emoluments received from the organisation’.[48]

    [48] Commissioner’s Outline of Written Submission, [25].

12. Therefore, s6(1)(e)(i) and Item 2A of Part I of the Fifth Schedule and of the IOPI Act and Regulation 9 of the SAPI Regulations does not make the IMF income exempt from income tax.[49]

    Is the Commissioner bound by TD 92/153 and TR 92/14 to treat the IMF income as income exempt from income tax?

    [49] Transcript, p 34.

13. The Applicant contends the Commissioner should be administratively bound to follow his public tax rulings accepting the IMF’s categorisation of its employees as per TR 92/14 [16].[50] The Commissioner argues TR 92/14 [16] is directed to what evidence it will accept as establishing that a person is engaged by an international organisation and the capacity in which he or she is so engaged.[51] We agree. TR92/14 [16] is limited to describing the evidence that will satisfy that a person is engaged in an international organisation and in what capacity. It does not purport to determine whether any particular person or class of persons is to be taken as holding an office in an international organisation for the purposes of s6(1)(d)(i) of the IOPI Act and Regulation 8(1) of the SAPI Regulations. It does not require the Commissioner to treat any person as necessarily attracting the immunity in s6(1)(d)(i) of the IOPI Act and Regulation 8(1) of the SAPI Regulations.[52]

    [50] Applicant’s Outline of Written Submissions, [60]; Applicant’s Statement of Facts, Issues and Contentions, [132]-[138].

    [51] Commissioner’s Outline of Written Submission, [31].

    [52] Commissioner’s Outline of Written Submission, [31].

14. TD 92/153 [2], says the Commissioner, agrees with DFAT’s view that the phrase ‘person who holds an office’ in relation to a prescribed international organisation covers a person who works as an employee of the organisation but does not include ‘persons engaged by the organisation as experts or consultants.’[53] The Commissioner contends the Handbook and the Letter of Appointment describe the Applicant as an expert so he would come within this exception.[54] Further, TD 92/153 [3] only describes the Commissioner’s general approach to the finding of relevant facts for determining whether a person holds an office in an international organisation for the purposes of the IOPI Act and the SAPI Regulations. It does not oblige the Commissioner to treat a person designated by an international organisation as holding an office as invariably attracting the immunity in s6(1)(d)(i) of the IOPI Act and Regulation 8(1) of the SAPI Regulations.[55] On the contrary, it expressly envisages that in any particular case, a consideration of the whole of the evidence may lead to the opposite conclusion. TD 92/153 [3] does not require the Commissioner to treat a person as one who holds an office in an international organisation for the purposes of the IOPI Act and the SAPI Regulations where, on a proper consideration of the facts and the law, he or she does not do so.[56]

    [53] Transcript, p 42.

    [54] Transcript, p 42.

    [55] Commissioner’s Outline of Written Submission, [29].

    [56] Commissioner’s Outline of Written Submission, [29].

15. We accept TD 92/153 provides guidance on how to determine whether a person ‘holds an office in an international organisation’ for the purposes of the IOPI Act and the SAPI Regulations. But that guidance does not and cannot require the Commissioner to treat an individual as a person who ‘holds an office in an international organisation’ for the purposes of the IOPI Act and the SAPI Regulations if the text of that legislation, interpreted in light of the High Court’s reasoning in Jayasinghe, suggests the person does not hold such an office.

16. Accordingly, we are satisfied that neither TD 92/153 nor TR 92/14 require the Commissioner to treat the IMF income as income exempt from income tax.

    Does the Commissioner have the ‘authority to make a legal decision’ on the application of the IOPI Act and the SAPI Regulations to the Applicant’s facts and circumstances?

17. The Applicant contends the Commissioner did not have the legal authority to make a decision under the IOPI Act.[57] The Applicant points out the Administrative Orders for the Commonwealth provide that DFAT and the Minister of Foreign Affairs administer the IOPI Act.[58] They do so because there is a strong linkage between the suite of privileges and immunities required and functionally necessary for international work, the work of diplomats and the work of officials and international organisations.[59] The Applicant says there is a functional necessity to protect certain kinds of communications and certain work of the international organisation and a tax exemption is just part of the suite that is functionally necessary.[60] The Applicant points out DFAT has agreed it considers that if the Applicant was a person in the position that the letter from the IMF states, pursuant to the IOPI Act he would be entitled to privileges and immunities.[61]  

    [57] Applicant’s Statement of Facts, Issues and Contentions, [60]-[76].

    [58] Applicant’s Statement of Facts, Issues and Contentions, [61]; Transcript, p 11.

    [59] Applicant’s Outline of Written Submissions, [17].

    [60] Applicant’s Outline of Written Submissions, [17]; Transcript, pp 10 and 20.

    [61] Transcript, p 9; Applicant’s submissions, [15].

18. The Commissioner contends that this ground of appeal is not raised by the Applicant’s Objection and therefore, absent an order of the Tribunal to the contrary, cannot be relied on by the Applicant by reason of s14ZZK(a) of the Administration Act. The Commissioner argues the contention is misconceived and irrelevant in any event.[62]

    [62] Commissioner’s Statement of Facts, Issues and Contentions, [32].

19. We agree the Applicant’s argument is misconceived. Under s 166 of the Income Tax Assessment Act1936 the Commissioner is authorised and required to make an assessment of an Applicant’s taxable income. In doing so he must ascertain the facts and apply these to the relevant law as enacted by Parliament and authoritatively interpreted and declared by the judiciary: Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Limited (2007) 158 FCR 325 at [3] - [7]. In the present case, the relevant law includes the IOPI Act and the SAPI Regulations as interpreted in light of the reasoning in Jayasinghe.[63] The views of DFAT or any other executive agency are one thing, but they do not absolve the Commissioner from performing his statutory function under the ITAA and the Administration Act to ascertain a taxpayer’s assessable income and determine any objections and appeals therefrom.

    [63] Commissioner’s Outline of Written Submission [33].

20. In those circumstances, we are satisfied the Commissioner is authorised and required to decide whether the IOPI Act and the SAPI Regulations apply to the Applicant’s facts and circumstances so as to make the IMF income exempt income irrespective of the views of DFAT.

    Will including the IMF income in the Applicant’s taxable income cause Australia to be in breach of international instruments?

21. The Applicant contends that his IMF income should be exempt because subjecting it to tax would be in breach of Australian laws regarding the adherence to international treaties and conventions.[64] He points out that the IOPI Act implements into Australian law the conventions granting privileges and immunities and Teoh’s case recognises that the law should be interpreted in conformity with established rules of international law if the language of the legislation is susceptible to such a construction.[65] He argues this creates legitimate expectations which are negated by inconsistent actions of the legislature or the executive.[66] As the Applicant sees it, the Commissioner should not be invoking provisions of the ITAA that fail to conform with Australia’s treaty obligations when there is a better interpretation of the IOPI Act by DFAT that results in conformance with Australia’s obligations.[67] The Commissioner disagrees.

    [64] Applicant’s Outline of Written Submissions, [62]; Applicant’s Statement of Facts, Issues and Contentions, [139]-[140].

    [65] Applicant’s Outline of Written Submissions, [27]-[28]; Transcript, pp 11-12.

    [66] Applicant’s Outline of Written Submissions, [34]; Transcript, p 12.

    [67] Applicant’s Outline of Written Submissions, [37]; Transcript, p 12.

22. The statutory task of the Tribunal is to consider and determine whether the Applicant has discharged his statutory onus of proving that the assessment is excessive: s14ZZK(b) of the Administration Act. In demonstrating that the assessments are excessive, the Applicant must rely on relevant provisions of domestic law and show why these, applied to facts as found by the Tribunal, demonstrate that the assessments are excessive.[68] As outlined above, the relevant domestic law is found in the IOPI Act and the SAPI Regulations and their authoritative interpretation and application by the High Court in Jayasinghe. International treaties do not form part of domestic law except to the extent that they have been validly incorporated into Australian law by an Act of the Commonwealth Parliament: CPCF v Minister for Immigration and Border Protection (2015) 255 CLR 514 at [490]-[491].

    [68] Commissioner’s Outline of Written Submissions, [37].

23. The views of the IMF on which the Applicant relies[69] concern the application of the immunity in Article IX, § 9 of the IMF’s Articles of Agreement and rely on his status as an IMF ‘employee’. There is an International Monetary Agreements Act 1947 (Cth) which enacts into Australian law the immunity appearing in Article IX, § 9.[70] Furthermore, the criterion applied in Article IX, § 9 is not that adopted in s6(1)(d)(i) of the IOPI Act and Regulation 8(1) of the SAPI Regulations.

    [69] See T13, pp 180-191.

    [70] Commissioner’s Outline of Written Submissions, [39].

1. Insofar as the IMF’s view of the application of the immunity in Article VI, § 19 of the 1947 UN Convention turned on its categorisation of the Applicant as an ‘official’, as the High Court emphasised in Jayasinghe, this categorisation is not determinative for the purposes of the application of the IOPI Act. Moreover, the IMF’s approach was to treat ‘officials’ and ‘employees’ as synonymous,[71] which cannot be reconciled with the High Court’s decision in Jayasinghe.[72]

   [71] T13, pp 182-183.

   [72] Commissioner’s Outline of Written Submissions, [40]; Transcript p 45.

   CONCLUSION

2. For the reasons stated above, the IMF income the Applicant derived from the Appointments was not exempt from income tax in the 2018 income year. The objection decision is affirmed.

I certify that the preceding 56 (fifty -six) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe, Senior Member Linda Kirk

....................................[sgd]....................................

Associate

Dated: 4 June 2020

Date(s) of hearing:	30 August 2019
Date final submissions received:	27 August 2019
Applicant:	In person
Counsel for the Respondent:	Mr M O'Meara SC
Solicitors for the Respondent:	Australian Government Solicitor