Expatriates
working overseas? There are income tax exemptions for expats
Important information for expatriates
It was proposed in the 2009 budget announcement of 12 May 2009 to effectively terminate the exemption for all employees working overseas with a few exceptions. This change particularly affects employees in the oil & gas industry as well as those in mining.
For more information please contact Cecilia Musuka.
Expatriate
Is a citizen who is a resident in another country, or. A native of elsewhere residing in a specific place, but still identifying with their native "home".
Does this relate to you? If so you could be eligible for exemption from Australian Income Tax under Section 23AG of the Income Tax Assessment Act.
What is section 23AG?
It provides for an Australian income tax exemption for Australian resident employees/expats working overseas. Usually of interest to individuals who are working in a foreign country or working fly-in fly-out on an overseas drilling rig or mining project.
M Squared & Associates Pty Ltd specialise in claiming the Australian income tax exemption for foreign sourced employment income pursuant to section 23AG of the Income Tax Assessment Act 1936 ('section 23AG').
We provide a range of services relating to this exemption and the following may be of assistance to you and expatriates:
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Preparation and lodgement with the Commissioner of Taxation of applications for private binding ruling ('PBR'). A PBR provides the Commissioner's opinion as to whether the taxpayer's foreign sourced employment income may be exempt from tax in Australia. It gives the employee an additional level of assurance that they may be eligible for the exemption particularly if the employment arrangement is complex, the foreign tax jurisdiction is unique or the employee is using a tax agent who is not experienced with section 23AG.
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Another benefit of obtaining a PBR is that it may be given by the Employee to their Employer to reduce the amount of employment tax withheld at source by their Employer.
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Preparation and lodgement of personal income tax returns claiming the exemption under section 23AG. This includes a detailed retrospective analysis of the foreign service dates and exemption criteria as is required at year end. Further, we make a detailed review of the tax system in the foreign jurisdiction and the double tax treaty (where applicable). Where we are preparing the tax returns for the employee on an ongoing basis, we are happy to maintain a schedule of their foreign service dates and advise them of their available leave balance as and when required.
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Review of standard or customised employment contracts and their suitability for claiming the exemption under section 23AG.
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A benefit arising out of section 23AG for an Employer, is the discontinuance of any liability arising under the Fringe Benefit Tax Legislation for benefits provided to an Employee subject to section 23AG