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27 Nov 09 On the amendments to s 23AG (employment income earned overseas)

MEMBER 41 writes:

"I wonder whether there is anybody with more insight than I regarding s 23AG(1AA). Well, the legislation is simple enough and I don't need anyone to read it for me. I understand that foreign salaries have lost their exempt status which, for most people, surely is easy, unless I am missing something.

But what measures are the ATO taking to soften the blow? What will it do to give this collection of tax on foreign salaries a chance to succeed? After all, these boys and girls - often the elite of university graduates - pay tax in London, Paris or Germany and "exempt foreign employment income", which had to be disclosed on Australian tax returns, featured as part of the "repayment income" for HECS debt purposes and affected the tax rate on other income etc. This already drew some incredulity and resentment.

As tax agents, are we just going to tell them "simple, you just include your foreign salary in your tax return as if was salary earned in Australia; and for the tax you paid where you are you'll get a tax offset, but chances are that you end up with something more to pay; so try to become a non-resident"?

Can one not see how they will react to that - no one in London even knows about 23AG(1AA)! I may be a bit unfortunate in that some of these kids were my students who turned to me when "tax" was a pleasant sideline for me. But really, I think the best thing to do is to say "sorry mate, your affairs are too difficult for me". After all, "tax" isn't pleasant anymore."

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