The assessable income of an Australian resident includes income from all sources, whether in or outside of Australia. However, in relation to foreign-sourced income, a Double Tax Agreement (DTA) between Australia and the contracting nation must be considered, as the DTA typically takes precedence.

This ID reviews the assessability of income derived by an Australian resident taxpayer from a rental property in Switzerland.

Under the DTA between Australia and Switzerland, rental income derived by an Australian tax resident from real property in Switzerland may be taxed in Switzerland.

The Tax Office considers that the phrase ‘may be taxed’ indicates that Switzerland has a non-exclusive taxing right. Accordingly, the rental income may potentially be taxed in both countries.

Where foreign tax has been paid on income subject to Australian tax, a foreign tax credit is typically available against the Australian tax payable.

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