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Edited version of your private ruling
Authorisation Number: 1012525099016
Ruling
Subject: Zone tax offset
Question
Are you entitled to claim a zone tax offset for periods spent engaged on a vessel at sea?
Answer
No
This ruling applies for the following period:
Year ended 30 June 2013
The scheme commences on:
1 July 2012
Relevant facts and circumstances
You are employed on a ship travelling between ports in Australia. You spend more than half of the financial year at sea.
As you are at sea you cannot associate yourself with a zone area on the mainland.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 79A
Reasons for decision
Section 79A of the Income Tax Assessment Act 1936 (ITAA 1936) provides a rebate to persons who reside in, or who are actually in, a prescribed area. The prescribed areas are referred to as Zone A and Zone B. There are further areas known as "special areas" within those zones.
The prescribed areas of Zone A are specified in Part 1 of Schedule 2 of ITAA 1936. Paragraph 1 of the Schedule defines these areas as certain "portions of mainland Australia". Paragraph 2 includes in the definition "all islands forming part of Australia lying adjacent to the coastline of the portion of Australia described in paragraph 1" and paragraph 3 specifically includes in the definition The Territory of Cocos (Keeling) Islands and The Territory of Christmas Island. Zone B is similarly defined.
Taxation Board of Review No.3 in Case P82, 82 ATC 399; Case 14 26 CTBR (NS) 111 considered the provisions of the Act relating to rebates for residents of isolated areas. This case concerned a deckhand on a prawn trawler who spent more than six months of the financial year at sea. In this case, Dr P Gerber (Member) said:
reference to "all that portion of the mainland" would suggest that the territorial sea and coastal waters adjacent to the mainland are excluded from the relevant zones for the purposes of the rebate allowable under sec. 79A. This was the conclusion reached by this Board on two occasions (Case A47, 69 ATC 278 and Case B10, 70 ATC 45), a conclusion which I respectfully adopt as clearly correct.
It follows that the waters adjacent to the mainland would also be excluded from the relevant zones.
This means that, for you to be considered to be in Zone A or Special Zone A on a given day, you must be physically present on the mainland, on an adjacent island or in the territories of the Cocos Islands or Christmas Island. Time spent at sea is not considered to be time spent in a zone.
As you have not specifically spent time in a zone you therefore cannot claim a zone tax offset.