Wilson and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered the tax liability of an applicant who received payments totalling $138,465 from an American company, IAP Worldwide Services Incorporated, for services rendered in Afghanistan during the 2010-2011 financial year. The applicant did not lodge a tax return for this period, asserting that the income was not assessable. The Australian Taxation Office disagreed, issuing a Notice of Assessment that indicated the applicant owed $41,258.15 in tax.

The Tribunal was required to determine two principal issues: first, whether the payments received by the applicant constituted "assessable income" for the relevant financial year; and second, if they were assessable, whether they were nevertheless exempt from income tax under section 23AF of the Income Tax Assessment Act 1936. The Tribunal noted that "assessable income" has a broad meaning, encompassing income derived from all sources, whether within or outside Australia, and concluded that the payments clearly met this definition.

The core of the Tribunal's reasoning focused on the applicability of section 23AF, which provides an exemption for certain foreign remuneration derived from qualifying service on an "approved project" for a continuous period of at least 91 days. While the applicant's work in Afghanistan might have fallen within the definition of an "eligible project," the Tribunal found no evidence that the Trade Minister or their delegate had formally approved such projects as being in the national interest through a written and signed document. Consequently, the Tribunal could not be satisfied that the requirements of section 23AF were met.

As a result, the Tribunal affirmed the decision under review, holding that the payments received by the applicant were correctly considered taxable income for the 2010-2011 financial year and were not exempt under section 23AF of the 1936 Act.