Tax Laws Amendment (Shipping Reform) Act 2012 (57 of 2012)

Schedule 3   Seafarer tax offset

Income Tax Assessment Act 1997

2   At the end of Division 61

Add:

Subdivision 61-N - Seafarer tax offset

Guide to Subdivision 61-N

61-695 What this Subdivision is about

A company may get a refundable tax offset for withholding payments made to Australian seafarers for overseas voyages if:

(a) the voyage is made by a vessel for which the company, or another entity, has a certificate under the Shipping Reform (Tax Incentives) Act 2012; and

(b) the company employs or engages the seafarer on such voyages for at least 91 days in the income year.

Table of sections

Operative provisions

61-700 Object of this Subdivision

61-705 Who is entitled to the seafarer tax offset

61-710 Amount of the seafarer tax offset

Operative provisions

61-700 Object of this Subdivision

The object of this Subdivision is to stimulate opportunities for Australian seafarers to:

(a) be employed or engaged on overseas voyages; and

(b) acquire maritime skills.

61-705 Who is entitled to the seafarer tax offset

(1) A company is entitled to a *tax offset for an income year if:

(a) the company is a corporation to which paragraph 51(xx) of the Constitution applies; and

(b) there is at least one individual in respect of whom the company has 91 days or more in the income year that qualify for the tax offset as mentioned in subsection (2).

(2) A particular day qualifies for the *tax offset under this Subdivision for a company for an individual if:

(a) on the day, the individual is an Australian resident who:

(i) is employed by the company; or

(ii) performs work or services under an *arrangement under which the company makes, at any time, a payment that is a *withholding payment covered by subsection 12-60(1) in Schedule 1 to the Taxation Administration Act 1953 (about labour hire arrangements); and

(b) on the day, the individual is so employed, or performs the work or services, on a voyage of a vessel as master, deck officer, integrated rating, steward or engineer; and

(c) the company, or another entity, has a certificate for the vessel that applies to the day under Part 2 of the Shipping Reform (Tax Incentives) Act 2012; and

(d) in the course of the voyage, the vessel travels between:

(i) a port in Australia and a port outside Australia; or

(ii) a port in Australia and a place in the waters of the sea above the continental shelf of a country other than Australia; or

(iii) a port outside Australia and a place in the waters of the sea above the continental shelf of Australia; or

(iv) a place in the waters of the sea above the continental shelf of Australia and a place in the waters of the sea above the continental shelf of a country other than Australia; or

(v) ports outside Australia; or

(vi) places beyond the continental shelf of Australia;

whether or not the ship travels between 2 or more ports in Australia in the course of the voyage.

Note 1: An entity may be entitled to a certificate for a vessel under Part 2 of the Shipping Reform (Tax Incentives) Act 2012 if it meets the requirements (relating to such things as tonnage, registration and usage) in that Act.

Note 2: An entity cannot be entitled to a certificate for a vessel under Part 2 of that Act for a day before 1 July 2012: see paragraph 8(4)(b) of that Act.

(3) For the purposes of paragraph (2)(b), the voyage of a vessel is taken to:

(a) start on the earliest day on which one or more of the following occurs:

(i) *shipping cargo to be carried on the voyage, or any part of the voyage, is first loaded into the vessel;

(ii) *shipping passengers to be carried on the voyage, or any part of the voyage, first board the vessel;

(iii) the voyage begins; and

(b) end on the latest day on which any of the following occurs:

(i) all shipping cargo carried on the voyage, or any part of the voyage, is completely unloaded from the vessel;

(ii) all shipping passengers carried on the voyage, or any part of the voyage, finally disembark from the vessel;

(iii) the voyage ends.

61-710 Amount of the seafarer tax offset

The amount of the company’s *tax offset for the income year is the amount (rounded up to the nearest whole dollar) worked out using the formula:

Gross payment amounts x 30%

where:

gross payment amounts means the total amount of *withholding payments covered by section 12-35 or subsection 12-60(1) in Schedule 1 to the Taxation Administration Act 1953 payable by the company in the income year:

(a) to individuals in respect of whom the company has 91 days or more in the income year that qualify for the offset as mentioned in subsection 61-705(2); and

(b) in respect of any of the following:

(i) the employment of, or the work or services performed by, such individuals in relation to which the company so qualifies for the offset;

(ii) leave accrued by such individuals during such employment, work or services;

(iii) training of such individuals that relates to such employment, work or services.