Tax Offset for Merchant Seaman - Lets Get It Applied to Pilots
Yesterday the Minister for Transport introducted the Tax Laws Amendment (Shipping Reform) Bill 2012 to the House. Amongst other things it introduces a tax offset for Australians employed internationally in shipping. The quote from the Minister is:
'It makes no sense that an Australian seafarer working on a ship in the Port of London should pay Australian income tax while an Australian working as a bartender in a pub in London does not.
This creates a disincentive for hiring Australian seafarers in international trade.
Consequently, the bill provides for a refundable tax offset for employers of Australian resident seafarers.
The seafarer tax offset provides an incentive for a company to employ Australian seafarers on overseas voyages.
This will also provide Australian seafarers with the opportunity to develop their maritime skills on ships operating in international trade.
For an employer to qualify for the offset, the seafarer must have served on overseas voyages for at least 91 days in the income year on an eligible vessel.'
The key point here appears to be that the Government supports the idea of an Australian being employed overseas and not paying Australian tax rates, even though when they are not working they reside in Australia.
This would seem to be similar to a pilot being employed by, say, Tiger in Singapore. They work more than 91 days in Singapore (or flying to other international destinations) and are paid based on Singapore tax rates. But if they have their family in Australia and regularly visit home the ATO will consider them an Australian resident and tax them the difference between what they have been taxed by the Singapore Govt and what they would have been taxed by the Australian Govt if they were working full time in Australia.
The Ministers comment that 'This will also provide Australian seafarers with the opportunity to develop their maritime skills on ships operating in international trade' seems particularly applicable at a time when companies are seeking 457 visas for pilots as there are, apparently, not enough Australian pilots in Australia with the right experience. There are a number of airlines such as Jetstar Asia, Tiger etc who will happily employ Australian pilots and there are Australians happy to be employed by them but don't want to be stung with the extra tax from the ATO. Naturally the company position is that this is a personal issue between the pilot and the ATO.
Now I know not every PPrune member is a big fan of the current Govt or Minister but nevertheless maybe it is time to push this with a Govt that is suppossed to be pro-worker and pro-union.
Interested to see what people think.