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An Australian resident for tax purposes, received foreign income which is exempt from tax in that jurisdiction (foreign country) due to specific tax exempt source per that country's taxation laws.
Does the australian resident needs to declare that income in Australia? If yes how it will be taxed here in Australia and/or if not taxed, how it will impact his tax liability on Australian Income?
Can you please let me know the specific provisions in the Act confirming the addition of foreign exempt income in Australia and paying tax at marginal rate.
If your income from foreign employment is exempt from tax in Australia, you must still include it in your tax return, as it still affects your tax.
Whether the foreign income is exempt from Australian tax, or how much tax needs to be paid on the amount will depend on whether there are tax treaties in place with the source country, as @SM2304 is referring to.
If Australia has a tax treaty with the source country, you can find it on the tax treaties page. You can find the legislation of it there.
How to calculate your assessable and exempt income is covered under Division 6 of the Income Tax Assessment Act 1997.
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