A question we often hear from people who have worked or are working overseas in the Australian Defence Force is:
Am I eligible to receive an overseas forces tax offset when lodging my individual tax return?
The answer is YES as long as you meet certain criteria.
How can I claim the overseas forces tax offset?
To be eligible, you will need to have served in a specified overseas locality for a period of 183 days or over during the course of the tax year as a member of one of the following:
- the Australian Defence Force
- the Australian Federal Police in the United Nations peacekeeping force in Cyprus
- a United Nations armed force, and your income relating to that service is not specifically exempt from tax.
There are some limitations:
- If part (or all) of your income earned qualified for a Section 23AD or Section 23AG tax exemption, then it cannot be used as part of your 183 day calculation.
- If your overseas service was less than 183 days, it is possible you could claim part of the overseas forces offset. Please contact your Etax accountant for more information.
- Unlike the zone tax offset, you are unable to ‘carry forward’ unused days from previous tax years to reach the 183 days.
Tax Offset Amounts
Your Circumstances | Tax Offset Amount |
|---|---|
| You were single | $338.00 |
| You have a dependant spouse or relative | $1516.00 |
Zone Tax Offset
If you are a member of the Australian Defence Force and you have not served overseas in the past financial year, you may instead be entitled to a zone tax offset. The zone tax offset is available to all Australian citizens who live in remote areas of Australia for part or all of the tax year. For more details about this offset, please take a look at our zone tax offset blog post.
Important Notes:
- Although you might qualify for both the overseas forces tax offset and the zone tax offset, unfortunately the ATO stipulates you are only allowed to claim one of these offsets on your individual tax return. Therefore we suggest you claim the offset which is the highest for you.
- This year the ATO has identified defence force personnel as one of the occupations where there is a high risk for incorrect deduction claims. This means your return could be checked quite thoroughly by the ATO. To avoid trouble with the ATO, please ensure you have evidence to support each and every expense claim you make on your tax return. If you’re unsure, simply send you Etax Accountant a message with any questions you may have.
- The zone tax offset and overseas forces tax offsets can be quite confusing. If you have any questions about how to claim these offsets, please contact us on [email protected] or send your accountant a message directly using my messages from within your tax return.
Please note: The information contained in this post is sourced and/or quoted from the ATO website
