Treasury on Wed 14.8.2013, released the results of its post-implementation review of the changes to income tax exemption for foreign employment income from 1 July 2009. The changes limited the exemption under s 23AG of the ITAA 1936 in relation to income derived by Australian individual residents unless the income related to certain aid work, charitable work, and government employees. Any non-exempt foreign employment income was then subject to Australian income tax from 1 July 2009, however, taxpayers were able to claim a non-refundable foreign income tax offset for the foreign income tax paid on the income.
The measure was originally announced in the 2009-10 Budget and subsequently legislated by Tax Laws Amendment (2009 Budget Measures No 1) Act 2009.
Overall, the post-implementation review concluded that the measure is meeting its policy intent of removing the unwarranted tax exemption and that it has had only a low impact on businesses and the not-for-profit sector.
[FJM Note: readers of this publication or of AAT cases will have noticed a string of unfortunate cases where the individual thought they were not resident, but the AAT concluded otherwise. Prior to the curtailing of s23AG in this way, their income would have been largely exempt.]
[LTN 156, 14/8/13]