If you pay tax in another country on a fringe benefit and your employer is subject to FBT in Australia on the same benefit, you can't claim a foreign income tax offset (FITO) on the foreign tax you paid on the benefit. This is because you can only claim a FITO on foreign income that is included in your assessable income in Australia. A benefit your employer pays FBT on is not included in your assessable income in Australia.
If you're working overseas, required to live away from your usual place of residence to perform your employment-related duties, and you meet the requirements of the living-away-from-home (LAFH) provisions, the LAFH provisions can apply.
The usual record-keeping requirements, such as employee declarations, also still apply.
Regardless of whether your income is exempt or not, you aren't liable for FBT in Australia on the value of fringe benefits your employer provides you with. This is because FBT is an employer obligation. If your employer has to pay FBT, they will advise you of any reportable fringe benefits by including them on your payment summary.
You must include the amount of any reportable fringe benefits in your tax return, but we don't include this amount when we work out your assessable income. However, it may affect other calculations such as:
- the Medicare levy surcharge
- deductions for personal super contributions made before 1 July 2017
- super co-contribution
- entitlements to some income-tested government benefits.
You have to declare the value of any benefits your employer provides you with that aren't subject to the FBT regime.
If you’re an employee, you generally can’t claim a tax deduction for any personal super contributions made before 1 July 2017. However, most people, regardless of their employment arrangement, will be able to claim a deduction for any personal super contributions made on or from 1 July 2017.
If your employer doesn't have to deduct PAYG withholding from your foreign employment income, any non-cash benefits you receive aren't subject to FBT. However, you must include the value of the non-cash benefits in your assessable income.
For more information, see If your foreign employer gives you a non-cash benefit.Find out how a fringe benefit you receive may affect your eligibility to claim a foreign income tax offset.