Show download pdf controls
  • Zone and overseas forces tax offsets

    If you live in a remote area or serve in forces overseas, you may be eligible for one of the following tax offsets:

    If you qualify for both of the above tax offsets, you can claim the one that provides the greater offset.

    Zone tax offset

    A rebate of tax, known as the zone tax offset, is available to individuals who are residents of specified remote or isolated areas of Australia (known as a zone). This doesn't include an offshore oil or gas rig.

    Remote areas are classed as either Zone A or Zone B. There are also special areas within these zones. If you don't know which zone your area is in, see Australian zone list.

    Eligibility for the zone tax offset

    Eligibility for the zone tax offset changed on 1 July 2015. We base your eligibility on your usual place of residence. If your usual place of residence is not in a zone, you are not eligible for the zone tax offset.

    From 1 July 2015, to claim the zone tax offset your usual place of residence needs to be both:

    • a remote or isolated area (known as a zone)
    • your residence for 183 days or more during the income year.

    If your usual place of residence was in a zone for less than 183 days in the income year, you may still be able to claim the tax offset. If your usual place of residence was in a zone for a continuous period of less than five years and:

    • you were unable to claim in the first year because it was not your residence for 183 days or more
    • the total of the days you lived there in the first year and the current income year is 183 days or more
    • the period you lived in a zone in the current income year includes the first day of the income year.

    Any discretion the Commissioner of Taxation exercises for the zone tax offset will be made with reference to your usual place of residence.

    Example: unable to claim the zone tax offset – no residence in a prescribed zone

    Levi is an engineer who lives in Adelaide. He flies to Alice Springs for 12-day shifts at an engineering firm and then travels back to Adelaide for his days off (which vary between four and eight days in a row).

    Levi doesn't have his usual place of residence within a prescribed zone, even though he is in Alice Springs for 183 days or more. This means he is unable to claim the zone tax offset.

    End of example

     

    Example: able to claim the zone tax offset

    Jonte is an engineer who lives in Darwin (located in Zone A). He travels to Kununurra in Western Australia (located in a Zone A special area), where he is employed in the mining industry. In his usual shift, Jonte drives to Kununurra, works 14 days at the mine and drives back to Darwin where he remains for 16 days.

    Jonte is eligible for the Zone A tax offset because his usual place of residence is in Darwin (Zone A).

    End of example

     

    Example: unable to claim the zone tax offset – main residence outside Australia

    Angela is a doctor who works in the Darwin Hospital emergency department. She flies into Darwin from Auckland, New Zealand and works on a regular rotational basis in Darwin Hospital.

    Usually, Angela works for 10 days and then has a break of between eight and ten days. During her breaks, Angela travels back to Auckland to see her friends and family. She stays in accommodation provided by the hospital when she is in Darwin.

    Angela is purchasing a house in Auckland. She also has a car which she leaves at her Auckland home for use when she is there. Angela has bills sent to her Auckland home and she is registered to vote in New Zealand.

    Angela isn't eligible for the zone tax offset because her usual place of residence is in Auckland.

    End of example

    See also:

    Eligibility prior to 1 July 2015

    Prior to 1 July 2015, to qualify for the zone tax offset, you must have lived or worked in a remote area (not necessarily continuously) for either:

    • 183 days or more during the income year
    • 183 days or more in total during the current and previous income years – but
      • less than 183 days in the current year
      • less than 183 days in the previous income year – and
      • you didn't claim a zone tax offset in your previous year's tax return.

    See also:

    Overseas forces tax offset

    You may be eligible for an overseas forces tax offset if the following apply:

    • you serve in a specified overseas locality
    • your income relating to that service is not specifically exempt from tax
    • you are a member of either  
      • the Australian Defence Force
      • a United Nations armed force.

    If your income was exempt foreign employment income, you exclude these periods when working out your eligibility for the tax offset.

    To claim the full tax offset, you must have served in an overseas locality for 183 days or more in the income year. If your overseas service was less than 183 days, you may be able to claim part of the tax offset. Unlike the zone tax offset, you can't carry forward any unused days from previous years to make up 183 days.

    See also:

    Last modified: 28 May 2021QC 31995