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  • Foreign service straddling income years

    Foreign service is not measured on a year-of-income basis. Where your foreign service commences in one income year and continues into the next income year, the entire period of that service is taken into account to determine the impact on your foreign earnings in applying both the:

    In this section

    Absences that still count as foreign service

    Some temporary absences during a period of foreign service still count as foreign service and will not affect continuity of the service. These are periods where you are absent in accordance with the terms and conditions of your foreign service for any of the following reasons:

    • recreation leave on full pay that is attributable to the period of foreign service
    • because of an accident or illness you suffer
    • because of an accident or illness of a person other than you, or the death of another person
    • you carry out duties or undertake training in Australia (work-related trips directly related to your foreign service), provided the absences are not excessive by comparison with the scheduled period of your foreign service
    • short breaks such as weekends, public holidays, rostered days off, days off due to part-time arrangements, compulsory lay-off or layover days, grounded days, flex days and days off in lieu – provided the break is part of the normal working conditions for your foreign service.

    Example: absence counting as foreign service

    Tim is employed on a 12 month contract to work in China.

    In exchange for forgoing public holidays, rostered days off and working weekends, he is given a two week break for days off in lieu. He takes this break part way through his period of foreign service and spends it in Australia.

    The 14 day break spent in Australia is part of the normal working conditions of Tim's scheduled 365 days foreign service. So it forms part of Tim’s period of foreign service, even though that time is spent in Australia.

    End of example

    Absences that do not count as foreign service

    Longer absences during a period of foreign service will affect your continuity of the service and not count as foreign service. An example of this is maternity leave.

    Taxpayers who die while on foreign service

    A taxpayer who dies while on foreign service is taken to have been engaged in that foreign service for a continuous period of 91 days or more if the period of service would have been at least that long had they not died.

    Find out about How exempt foreign employment income affects your tax

      Last modified: 09 Jun 2022QC 16739