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Do I have to pay worldwide tax on US government pension as a resident of Australia?

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I am a US citizen looking to become a permanent resident in Australia. I have the following pensions:

US Military (government) pension

US County (government) pension

 

I will not be earning any income in Australia.

 

I know that I have to pay US tax on my pensions but can you tell me if it will also be taxed in Australia as a permanent resident required to declare worldwide income?

 

I believe my US government pensions would be exempt to Australian worldwide tax based on article 19 of the US Australia tax treaty.

ARTICLE 19 Governmental Remuneration

This Article provides that remuneration, including pensions, paid by one of the Contracting States or a political subdivision, local authority or agency thereof to a citizen of that State for the performance of governmental functions is exempt from tax by the other State.

Could you please verify if this is correct?

 

Your assistance in this matter would be greatly appreciated.

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ATO Community Support

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Hi @plwiker,

 

That's right - your pension will only be taxable in the United States.

 

This is because article one states: Except as otherwise provided in this Convention, this Convention shall apply to persons who are residents of one or both of the Contracting States.

 

So as per article 19, government pensions will only be taxable in the country of origin.

 

You can find the income tax treaties on the treasury website.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @plwiker,

 

That's right - your pension will only be taxable in the United States.

 

This is because article one states: Except as otherwise provided in this Convention, this Convention shall apply to persons who are residents of one or both of the Contracting States.

 

So as per article 19, government pensions will only be taxable in the country of origin.

 

You can find the income tax treaties on the treasury website.