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    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Australian resident

    If you received income from overseas, you must show your assessable foreign income here, even if tax was taken out of the income in the foreign country.

    You can 'receive income' even if it is held overseas for you.

    Foreign income that is exempt from Australian tax may still be taken into account to work out the amount of tax you have to pay on your other income.

    Temporary resident

    If you were a temporary resident, the only foreign income you will need to show at this section is income that you earned from foreign employment while a temporary resident. See 'Tax-free income for temporary residents' in Amounts that you do not pay tax on for the definition of a temporary resident and details of the exemption.

    How to work out if your foreign employment income is exempt from Australian tax

    Step 1

    Find out whether any of your foreign employment income is exempt from Australian tax because of:

    • a privileges and immunities agreement or a law covering persons connected with international organisations
    • specific exemptions for the pay and allowances of members of the Australian Defence Force, related to qualifying service in a declared operational area.

    Your employer should be able to tell you whether either of these applies.

    For more information, see Defence forces or Australian Federal Police overseas service.

    If all your foreign employment income is exempt for either of these reasons, do not include this income anywhere on your tax return; you have now finished this section. Otherwise go to Step 2.

    Step 2

    Your foreign employment income that is not exempt under Step 1 might still be exempt from tax. Work through the rest of the steps to find out whether it is exempt from tax. Even if it is exempt, we still take it into account to work out the tax on your other assessable income.

    For more information about this type of exempt income, see:

    Income from self-employment and contracts is generally not exempt from tax. Include it in the Other foreign income section.

    Step 3

    Did you have foreign service income that was directly attributable to:

    • your deployment outside Australia as a member of a defence force or a police force by the Commonwealth Government, a state or territory government, or an authority of such a government
    • the activities of your employer in operating a public fund that is an international affairs deductible gift recipient
    • the activities of your employer, provided that your employer is a prescribed institution located or pursuing objectives outside of Australia, or
    • the delivery of Australian official development assistance by your employer (except if your employer is an Australian government agency)?

    No – Go to Step 5.

    Yes – Go to Step 4.

    Step 4

    Did you pay, or are you liable to pay, foreign income tax on your foreign employment income?

    Yes – Go to Step 7.

    No – See non-exemption conditions to determine if you may be entitled to an exemption from Australian tax on your foreign service income. If you are entitled to an exemption based on these conditions, go to Step 7. If you are not entitled to an exemption, go to Step 5.

    Step 5

    Were you engaged in foreign service in connection with an Austrade approved project?

    No – Your foreign employment income is not exempt from Australian tax.

    Yes – Go to Step 6.

    Step 6

    Did either of the following apply to you:

    • You paid, or are liable to pay, foreign income tax on your foreign employment income, or
    • A tax treaty with Australia (or a law giving effect to a tax treaty) is not the only reason why you did not have to pay tax in the country where you earned the income?

    No – Your foreign employment income is not exempt from Australian tax.

    Yes – Go to Step 7.

    Step 7

    Work out the period that you were continuously engaged in service in the foreign country.

    If you were absent from the foreign country at any time during this period, see Exempt foreign employment income to find out whether we consider you to have been continuously engaged in service in the foreign country. If you were working on a project approved by Austrade, see Approved overseas projects.

    If your period of continuous service in a foreign country was 90 days or less, your foreign employment income is not exempt from Australian tax. If it was 91 days or more, your foreign employment income will generally be exempt from tax. If you are not sure, phone 13 28 61. You cannot claim a foreign income tax offset on this income.

      Last modified: 28 Jun 2018QC 55647