• Remove the income tax exemption available to certain government employees working overseas

    In the 2015-16 Federal Budget, the government announced that it will remove the income tax exemption available to government employees who work overseas to deliver Official Development Assistance (ODA).

    The original purpose of the exemption was to avoid double taxation, but in many cases the employee now avoids income tax in both the source country and Australia.

    Section 23AG of the Income Tax Assessment Act 1936 (ITAA 1936) exempts the income of Australian residents who work overseas for more than 90 continuous days and meet certain qualifying conditions.

    The qualifying conditions within section 23AG of the ITAA 1936 have been amended so that from 1 July 2016, Australian government employees who work overseas to deliver ODA no longer qualify for exemption from income tax.

    Australian Defence Force and Australian Federal Police personnel and individuals delivering ODA for a charity or private sector contracting firm will maintain eligibility for the exemption.

    Legislation and supporting material

    Tax and Superannuation Laws Amendment (2015 Measures No. 4) Act 2015External Link

    See also:

      Last modified: 26 Oct 2015QC 45122