16 July 2015

Release of draft legislation - Zone Tax Offset changes for fly-in-fly-out workers

Draft legislation to improve the integrity of the Zone Tax Offset is released today for public comment.

The Zone Tax Offset is a concessional tax offset available to individuals in recognition of the isolation, uncongenial climate and high cost of living associated with living in particular locations.

Broadly, to be eligible for the Zone Tax Offset, a taxpayer must reside or work in a specified remote area for more than 183 days in an income year.  However the 183 days do not need to be spent consecutively in a Zone for a taxpayer to be eligible for the offset. So fly-in, fly-out and drive-in, drive-out workers can claim the offset without facing the full challenges of remote living.

It is estimated that around 20 per cent of the more than 500,000 claimants do not live full‑time in the zones.

From the 2015-16 income year, access to the Zone Tax Offset will be restricted to people whose normal residence is located within a Zone or special area of a Zone. People who fly or drive to a Zone for work related purposes but do not ordinarily reside in the Zone will no longer be eligible to claim the Zone Tax Offset. 

The Government is committed to maintaining the integrity of the tax system. The changes to the Zone Tax Offset improve integrity by limiting it to genuine residents of Zones.

Submissions are invited on the exposure draft legislation and explanatory material which are now available on the Treasury website.

Submissions close on 5 August 2015.