The Government will simplify the operation of the foreign employment income tax exemption, the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, announced today.
The process of determining if a taxpayer qualifies for a foreign employment exemption is currently demanding. For example, ‘absentee credits’ are accumulated for each day of eligible service and the taxpayer needs to calculate and compare these to the time away from foreign service each time that a break occurs in foreign service of more than 24 hours.
“The measure will simplify the process taxpayers need to undertake to determine if their foreign employment income qualifies for a tax exemption, by clarifying what types of leave may count towards eligible service, and simplifying the calculation required to determine if other types of absences constitute a break in this eligible service,” Senator Coonan said.
As a result of the measure, any accrued leave other than long service leave will be included in a taxpayer’s period of foreign service for the purposes of establishing whether the taxpayer has met the required minimum 91 days continuous service.
In addition, the measure provides that continuity of foreign service will not be broken by other types of temporary absence provided that the time away does not exceed one sixth of the total number of days of foreign service.
These changes will apply from 1July2005.