Zone and overseas forces
If you live in a remote area or serve in forces overseas, you may be eligible for one of the following:
If you qualify for both an overseas forces and a zone tax offset, you can claim only one of them, but you may claim the highest one.
Zone tax offset
You may be able to claim a zone tax offset if your usual place of residence is in a remote or isolated area of Australia (zone), not including an offshore oil or gas rig.
Eligibility for the zone tax offset changed on 1 July 2015.
Eligibility from 1 July 2015
From 1 July 2015, you can claim the zone tax offset if your usual place of residence was in a remote or isolated area (known as a zone) 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, as long as 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 you lived there less than 183 days
- the total of the days you lived there in the first year and the current income year is 183 or more. The period you lived in a zone in the current income year must include the first day of the income year.
Any discretion exercised by the Commissioner for the zone tax offset will be made with reference to your usual place of residence.
Levi is an engineer who lives in Adelaide. He flies to Alice Springs for twelve-day shifts at an engineering firm, then travels back to Adelaide for his days off (which vary between four and eight days in a row). As Levi does not have his usual place of residence within a prescribed zone, even though he is in Alice Springs for 183 days or more, he is unable to claim the zone tax offset.
Jonte is an engineer who lives in Darwin (located within 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 still able to claim zone tax offset, as his usual place of residence is in Darwin, but he cannot access the special area Zone A offset.
Angela is a doctor who works in 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 ten 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 is not eligible for the zone tax offset because her usual place of residence is in Auckland.
End of example
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 and less than 183 days in the previous income year – and you did not claim a zone tax offset in your previous year's tax return.
Overseas forces tax offset
You may be eligible for an overseas forces tax offset if you serve in a specified overseas locality as a member of one of the following:
- the Australian Defence Force
- the Australian Federal Police in the United Nations peacekeeping force in Cyprus
- a United Nations armed force, and your income relating to that service is not specifically exempt from tax.
Periods of service for which your income was exempt foreign employment income are excluded in 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.
If you live in a remote area or serve in forces overseas, you may be eligible for an overseas forces tax offset or a remote zone tax offset.