Foreign Employment Income Exemption Changes

Currently, Australians working overseas for over 90 consecutive days are eligible for a general exemption which means they do not pay any Australian income tax on their foreign employment income.

From 1 July 2009, the foreign employment income exemption will only be available for income earned:

• as an aid or charitable worker employed by a recognised non-government organisation; or
• as a government aid worker; or
• as a specified government employee (for example, defence and police force personnel deployed overseas).

Income earned by an individual employed on an overseas project approved by the Minister for Trade as being in the national interest will remain exempt.

A tax offset will be available for any foreign tax paid on the foreign employment income.