Exempt foreign employment income

If you are an Australian resident for tax purposes , you pay tax in Australia on your employment income, such as salary, wages, commissions, bonuses and allowances earned from foreign service unless it is exempt from Australian tax. From 1 July 2009, there is a limited exemption for foreign employment income from particular types of foreign service.

Is your foreign employment income exempt from tax?

Your foreign employment income is exempt from tax if all of the following applies:

you are a resident of Australia
you are engaged in continuous foreign service as an employee for 91 days or more
your foreign service is directly attributable to any of the following

delivery of Australian official development assistance by your employer
activities of your employer in operating a public fund declared by the Treasurer to be a developing country relief fund
activities of your employer in operating a public fund established and maintained to provide monetary relief to people in a developing foreign country who are distressed as a result of a disaster (a public disaster relief fund)
activities of your employer as a prescribed charitable or religious institution exempt from Australian income tax because it is located outside Australia or the institution is pursuing objectives outside Australia
deployment outside Australia by an Australian government (or an authority thereof) as a member of a disciplined force

and

you are not excluded from exemption by the non-exemption conditions.

If your foreign service is not directly attributable to these activities, you will need to include the foreign employment income in your tax return as assessable income.

You may be entitled to a foreign income tax offset for amounts of foreign tax you have paid.

Sections within Is your foreign employment income exempt from tax?

Last Modified: Thursday, 28 June 2012