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How we work out the taxable income

Last updated 27 October 2016

Five per cent of any amount received as payment for carriage of passengers, livestock, mail or goods in Australia, is deemed to be taxable income derived in Australia.

This deemed amount reflects the estimated profit of the shipping activity which is attributable to the Australian shipping activity.

The source of income is based on the location of the activity, not where the payment is made or where contracts are signed.

Amounts received for a ship's journey to Australia – such as for cargo loaded in an overseas port and transported to an Australian port – is not deemed by us to be part of your taxable income.

Contractual arrangements in the shipping industry may vary – for example, a contract may specify potential payments other than the agreed fee or 'freight'. Amounts such as 'demurrage' and 'dispatch (or despatch) money' will affect the total amount received for carriage and therefore amounts deemed to be taxable income derived in Australia.

Income earned from fares of passengers embarking in Australia on a cruise liner or any other visiting ship is also deemed to be part of the ship operator's taxable income.

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