Skip to main content
Exfin Home Exfin Home
  • Home
  • About the Company
  • Site Map
  • Contact Us
  • Financial Planning
    • Expatriate Financial Issues
    • Planning Process
  • Tax Advice
    • Australian Tax Residency
    • Capital Gains Tax (CGT)
    • Foreign Income
    • Overseas Redundancy
    • Tax Effective Salaries
    • Fly in - Fly out
    • Income Tax Rates
    • Offshore Trusts
    • Australian Tax FAQ's
    • Company Tax
    • Foreign Companies - Tax
    • US Tax Advice
    • FBAR, FATCA Reporting
    • Super and US Tax
    • US Taxation - FAQ's
    • 457 Visa - Tax and Finance
    • UK Tax Advice
  • Superannuation
    • Contributions & Benefits
    • Taxation of Super
    • Super for non-residents
    • Contributing from Overseas
    • International Funds
    • SMSF's - Residency and other requirements
    • Transferring Pension Funds
    • Australian Pensions
    • Temporary and Previous Residents
  • Career Issues
  • Pension Transfers
    • Pension Transfers to Australia - Issues
    • Australian Taxation
    • Which Super Fund?
    • Large Pension Transfers
    • UK to Australia - QROPS
    • UK Pension Changes 2015
    • Pension Transfers - FAQ's
    • State Pensions
    • US Pension Transfers
    • South African Pensions
  • International Retirement
  • Investments - ASX Shares
  • Australian Mortgages
    • Australian Expat Mortgages
    • Australian Mortgages for New Zealanders
    • First Home Owners Grant
  • Foreign Currency Mortgages
  • International Mortgages
    • UK Mortgages
    • French Mortgages
    • Italian Mortgages
  • Life Insurance
    • Life Insurance Options
    • Life Insurance Products
    • Life Insurance for Migrants
    • 457 Visa Life Insurance
  • Personal Issues
  • Health Insurance
    • Choosing Health Insurance
    • Medicare while Overseas
    • 457 Visa Health Insurance
    • For Employers
  • Travel Insurance
    • 457 Visa Travel Insurance
  • Legal Advice
    • Divorce Overseas
    • Custody of Children
    • Property Issues
    • Wills
    • Power of Attorney
    • Australian Citizenship
  • Real Estate
    • Real Estate Prices
    • Capital City Prices
    • Buying Costs
    • Selling Costs
    • Renting Out Property
    • Foreign Buyers
  • Foreign Exchange
    • Transferring Forex
    • Bank Alternatives
    • Forward Contracts
    • Forex Charts
  • Consultancy
    • Cost of Living
  • Banking
    • Offshore Banking
  • Education
  • Travel Warnings
    • Emergency Information
    • Rainfall - Asian Cities
  • News and Views
  • VPN for Expats
  • Commentary
  • Voting Overseas
  • Australian Expatriate Links
  • Relocation Checklist
12 December, 2019

Services

  • Financial Planning
  • Tax Advice
    • Australian Tax Residency
    • Personal Income Tax Rates
    • Withholding Tax Rates
    • Australian Expat Tax FAQ's
    • Capital Gains Tax (CGT)
    • CGT Main Residence Exemption
    • Inheritance Tax
    • Fly in - Fly out Taxation
    • Overseas Redundancy
    • Taxation of Foreign Income
    • Tax Effective Salaries
    • Offshore Trusts
    • Australian Company Tax
    • Foreign Companies - Tax
    • Property Withholding Tax (FRCGW)
    • Stamp Duty and Land Tax
    • Temporary Residents - Tax
    • Payment of HECS-HELP Debts
    • US Tax Advice
    • FBAR and FATCA Reporting
    • Superannuation and US Taxation
    • US Taxation - FAQ's
    • UK Tax Advice
  • Superannuation
  • Pension Transfers
  • International Retirement Funds
  • Investments - ASX Shares
  • Australian Mortgages
  • Foreign Currency Mortgages
  • International Mortgages
  • Life Insurance
  • Health Insurance
  • Travel Insurance
  • Legal Advice
  • Real Estate
  • Foreign Exchange
  • Consultancy

Other Resources

  • Banking
  • Education
  • Travel Warnings
  • News and Views
  • Commentary & Blog
  • VPN for Expats
  • Voting Overseas
  • Australian Expatriate Links
  • Relocation Checklist

You are here

Home » Tax Advice

Taxation of Overseas "Fly in - Fly Out" Arrangements

Taxation of Australian Residents on "Fly In - Fly Out" (FIFO) Assignments

Up until a decade ago, section 23AG of the ITAA granted a tax exemption in relation to income earned overseas by Australian tax residents who met certain criteria - in particular that the overseas work assignments be of at least 91 continuous days duration in a location that usually imposed income tax on that income. However, poorly thought through changes to s23AG were made back in 2009 which severely limited the scope of the tax exemption to Aid and charitable organisations, as well as certain Government workers (for example, defence and police force personnel deployed overseas).

Consequently, individuals who remain Australian tax residents while working overseas are now typically fully taxable in Australia at resident tax rates. However, income tax paid overseas may usually be claimed as a credit or offset against Australian income tax - but note that this will not extend social security levies, fringe benefit taxes etc.,

Individuals working for aid, charitable and government organisations who believe they still fall within the scope of s23AG need to meet a number of criteria:

  • You need to be tax resident in Australia – but FIFO arrangements will, by their nature, not normally break existing tax residency;
  • You must be an employee, not a contractor;
  • Your overseas service must be for a continuous period of at least 91 days; and
  • Except in a limited range of circumstances, you must be subject to tax in the country(ies) you are working in.

Most Australian residents on FIFO arrangements typically work on monthly rotations, but they can still qualify for the 91 days continual service requirement. In determining the period of continuous foreign service, certain intervals when the taxpayer is absent in accordance with the terms and conditions of the service, such as recreation or sick leave, are included in calculating the 91 days. The period of continuous foreign service need not be measured on a year of income basis.

Where the period of continuous foreign service starts in one income year and terminates in another year, the entire period of service is taken into account in determining the availability of the exemption in each income year.  For example, two periods of work can be grouped together as continuous if they are broken by temporary absences that do not exceed 1/6th of the total number of days of foreign service before the absence. But note that these days of temporary absences that are not due to illness, accident or recreational leave do not count towards the 91 days.

As an example, based on the above rules it is possible for an Australian resident to work overseas on a cyclical shift of 5 weeks overseas and then 5 weeks in Australia on leave and the whole period can be counted as overseas service (see IT 2015). Note that in this case that your income is considered “exempt income” and must still be included in your Australian tax return where it is taken into account in determining your Australian tax rate.

As you can see, there are quite a number of tax complexities involved in these arrangements and we would strongly recommend a tax briefing before you proceed to work on overseas on a FIFO basis - particularly if you have negatively geared investment properties. Also note that some flexibility is now available to claim tax deductions with respect to personal superannuation contributions which can be useful in certain situations.

Complete the Inquiry form

IMPORTANT: The material contained in this website and other associated communications is only intended as general, background information and must not be relied upon. No warranty is provided in relation to any material or to the services that may be contracted through exfin.com. It is recommended that individuals seek the advice of qualified professionals before taking any action.

International Time

   
* DST active. icon-alert

Exfin World Clock Notice

Please note we've made every effort to ensure the accuracy of our global clock, but due to unannounced changes in DST please do not rely upon it if precision is vital.

Exchange Rates

AUD/USD » 0.6779
AUD/EUR » 0.6096
AUD/GBP » 0.5142
AUD/YEN » 73.4488
AUD/HKD » 5.2671
AUD/SGD » 0.9173

Proudly supplied by

OFX!

Pension Transfers

Pension Transfers

Click to find out more
  • Home
  • About the Company
  • Legal
  • Privacy
  • Site Map
  • Contact Us
Copyright © 2018 Exfin International Pty Ltd
Pixel Ink Media Web Development