The Government intends to legislate to restore a tax exemption for certain Australians employed in Iraq. The exemption is no longer available because of orders issued by the Coalition Provisional Authority (CPA) in Iraq.
Remuneration earned by Australian employees in Iraq is exempt under certain conditions.
However, the CPA retrospectively suspended the Iraqi personal tax system for the period 1 January 2003 to 30 April 2004. As a consequence, one of the conditions of the exemption is no longer satisfied by Australian employees in Iraq for this period.
The employees affected are Australian residents who worked for a government organisation in Iraq, employees of certain non-government organisations (including aid agencies), and private sector employees.
'These Australians worked or served in Iraq with the reasonable expectation their earnings would be exempt from Australian tax. The majority of their work was related to reconstruction, humanitarian or peacekeeping efforts, which the Government supported. The Government's amendments will mean these workers will not lose this exemption retrospectively as a result of orders passed by the CPA," Minister for Revenue and Assistant Treasurer, Mal Brough, said today.
The Government's amendments will ensure that the CPA's orders do not affect the availability of the exemption for remuneration earned by Australian employees in Iraq for the period 1 January 2003 to 30 April 2004.
Remuneration earned after 30 April 2004 is not affected by the CPA's orders.