Government clarifies tax for overseas-based Australian resident employees

On 1 April 2010 the government addressed implementation problems with the changes to the tax announced in the 2009 Budget, and legislated in June 2009.  On this occasion, the problems it attempts to address are for the tax treatment of Australian residents employed overseas.

To avoid double taxation, overseas-based Australians will now not be required to lodge a foreign tax return to demonstrate and claim amounts of foreign tax paid – they will just need to keep their normal pay slips identifying the amounts withheld as evidence in case of an ATO audit.


In relation to the application of FBT to overseas-based Australian residents, the operation of the current FBT exemption for fly-in-fly-out arrangements that apply for domestic arrangements will be maintained and applied to Australian workers in similar situations involving international work.  The ATO has indicated that there is no impediment to the ‘otherwise deductible’ rule that applies within Australia also being applied to overseas FIFO arrangements that are factually similar in nature (other than one being domestic and one international).


The press release issued by the Minister Assisting the Treasurer, Senator the Hon Nick Sherry, announcing these changes can be found HERE.

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