The latest from the High Court: October 2017

Tax Law

Income tax – privileges and immunities of international organisation – holding an office

In Commissioner of Taxation v Jayasinghe [2017] HCA 26 (9 August 2017) the High Court held that the appellant did not ‘hold an office’ for the purposes of the International Organisations (Privileges and Immunities) Act 1963 (Cth) and was not exempt from paying income tax. Section 6(1)(d)(i) of the Act relevantly exempted from taxation salaries and emoluments received by those holding an office, or performing the duties of an office, in particular organisations, of which the UN is one.

The High Court held that s 6(1)(d)(i) is concerned with the incidents of the relationship between the person and the organisation, which depends on the substance of the terms of engagement. The structure of the organisation and the place of the person within it will be important, as will the duties and authorities associated with the person’s position. In this case, the appellant was engaged as an independent contractor to an arm of the UN in his individual capacity to perform a specific task or complete a specific piece of work. He had no authority or right to enter into legal or financial commitments or incur any obligations on behalf of the UN. He was responsible for paying any tax levied by Australia on his earnings and was solely responsible for any claims arising for any negligent acts performed by him. He was not an official of the UN for the purposes of the Convention on the Privileges and Immunities of the United Nations. He therefore did not hold an office for the purposes of s 6(1)(d)(i).

Kiefel CJ, Keane, Gordon and Edelman JJ jointly; Gageler J separately concurring. Appeal from the Full Federal Court allowed.