Changes to income tax exemption for income earned by Australians working overseas from 1 July 2009
From 1 July 2009 foreign employment income derived by certain Australians working overseas for a continuous period of 91 days or more will become taxable in Australia. To avoid double taxation, taxpayers will be entitled to a foreign income tax credit for any foreign tax paid.
Currently, foreign employment income derived by Australians working overseas for a continuous period of 91 days or more is exempt from tax in Australia. Importantly, this exemption will continue to apply to income earned as an aid worker, a charitable worker, under certain types of government employment or on projects that are in the national interest.
These measures will only apply to people who work overseas but are still residents of Australia for tax purposes. People who cease to be residents for tax purposes will not be required to pay tax on their foreign employment income in Australia.