Tax exempt status for foreign employment income–
No More.

A number of significant changes to the Australian Tax rules were made in this year’s Federal Budget. Some received little or scant reporting but will no doubt have a real impact on a small number of Australians.

Under existing tax rules, there is a general exemption from Australian tax for income earned overseas in foreign employment that lasts for at least 91 consecutive days.

This general exemption is being removed from 1 July 2009.

The exception will continue where the income is earned as an aid worker, a charitable worker, under certain types of Government employment or on projects that are considered to be in the national interest.

In all other cases, the foreign employment income will be assessable in Australia but a tax offset will be given for any tax paid in the foreign country on that income, ensuring there is no double taxation.

“ This announcement means that greater attention must be placed on ceasing residency. It’s all about planning on how you leave Australia, in the same way that you plan on how to arrive.” says Kelvin Boyd, CEO of Global Pensions Group.

For further information click below:

http://www.familyassist.gov.au/internet/fao/fao1.nsf/content/getting_started-how_paid-fortnightly-estimate_income-what_family_income-tax_exempt