No more “fly-in-fly-out” and “drive-in-drive-out” allowances under the Zone Tax Offset Changes
People living or working in remote locations across Australia may be eligible to the receive a Zone Tax Offset. This tax concession applies to specific zones within Australia and excludes offshore oil or gas rigs. However, under the recent Zone Tax Offset Changes, the tax concession can only be applied to those who reside in remote locations for a minimum of 183 days. This means that “fly-in-fly-out” and “drive-in-drive-out” workers are can no longer receive the tax offset.
This tax allowance is designed to assist with the higher cost of living, amenities, uncongenial climates and environmental factors related to living in an isolated area. It is used as recognition for the hardships of residing within these zones. It covers several locations which can be easily checked via the ATO’s Australian Zone List.
To be eligible, you must be genuinely residing within the correct Tax Offset Zones. This means that you can no longer claim the Tax Offset while using a regular “fly-in-fly-out” rotation between work and home. There is a required minimum length is 183 continuous days, meaning you can only claim the Zone Tax Offset if you reside in your ‘zone’ area.
In order to better manage and enforce these rules, the ATO have been reviewing tax returns that make Zone Offset Tax claims. The review involves holding your tax return, which may delay its lodgement. This is just a formality and is not classified as an audit. However, it does mean that the ATO are checking your Zone Tax Offset related claims before processing your tax refund.
When lodging your next tax return, it is important to keep in mind that only working in a tax offset area no longer qualifies you to receive a concession on your taxable income. Penalties may apply if you try to make an incorrect claims or try to mislead the ATO. This would result in the tax offset will be disallowed and you will need to pay back the offset amount. If you are unsure if these Zone Tax Offsets changes affect you and if you are eligible to receive the claim, please speak with your Accountant.
For more information or to speak with an Accountant to discuss your Zone Tax Offset allowances, please contact us below or call us on 1300 627 829.
