Australia: Ruling on Income From Freelance Journalism for Italian Radio Station

The issue of a recent ATO ruling (ATO Interpretative Decision) was whether income derived by an Australian resident from performing freelance journalism in Australia for an Italian radio station is assessable with Australian income tax.

The ATO decided that the provision of freelance journalism is similar in character as those mentioned in Article 14(2) of the 1982 tax treaty concluded between Australia and Italy. That treaty provision reads as follows:
?The term “professional services” includes especially services performed in the exercise of independent scientific, literary, artistic, educational or teaching activities as well as in the exercise of the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.?

The pertinent tax treaty only allocates a right to tax to Italy if an Australian resident has a fixed base regularly available in Italy for the purpose of performing his activities. In this case the taxpayer did not have a fixed base available in Italy. The – not surprising – conclusion of the ATO was that the income earned with the freelance journalism activities was included in the assessable income for Australian income tax purposes (under Sec. 6-5(2) of the ITAA 1997).