ATTN: Aussies End of 23AG and now RA67

[Master Caution]

Well the tax and spend Labor government:yuk: has delivered it's second budget here are some gems that may affect CX Aussies in HK or on a base and even affect your CoS 08 decision:

This link appears to show that 23AG will end 01/07/09 for those of you still using it to not pay OZ tax - it is a long page of revenue measures - search the page with "91" - which was the number of days outside OZ to qualify for section 23AG.

Budget Measures 2009-10 - Budget Paper No. 2 - Part 1: Revenue Measures - Treasury (http://www.budget.gov.au/2009-10/content/bp2/html/bp2_revenue-05.htm)


KRudd has also announce that the standard retirement age will be progressively increased from 2017 to become 67 years of age by 2023. Commentators are also saying they expect following budgets to make Superannuation (P.Fund) payout access more restrictive.

Currently if you were born after 1965 you can access your superannuation at 60 and the income stream derived from it does is (a) tax free and (b) does not count towards taxable income. The speculation in the press is they will make the access (preservation) age rise towards 67 in line with the increasing retirement age and /or possible revenue grab in the form of taxing payouts taken earlier (say, from 60 onwards).

So... CoS99 on a base for a younger guy means you may have to get from age 55 to somewhere between 60-67 without the benefits of tax free super.:{

Of course on-shoring may let CoS99 people claim RA 65 later due anti-discrimination laws - maybe.


They have also cut in half the annual super concessional contributions limit from 50K to 25K, so if you are a OZ based officer doing salary maximum sacrifice and your marginal tax rate was 46% then you have just had an A$7875 tax rise.:(

Anyway food for thought.

[Master Caution]

And Just to lighten up a little:

http://img15.imageshack.us/img15/995/cartoont.jpg

Copied from the D&G forum

[canonball1]

Master Caution read the ATO law guidlines before you panic. People on a base should pay tax as they they use the F@$%ING national hardware etc.Residency - overview (http://www.ato.gov.au/individuals/content.asp?doc=/content/64131.htm)

[BuzzBox]

People on a base should pay tax as they they use the F@$%ING national hardware etc.

Not that it matters given the demise of 23AG (for most) announced yesterday, but a recent Federal Court ruling specifically excluded international pilots from 23AG anyway. The 23AG legislation states that the tax exemption applies to income generated by foreign service IN a foreign country. The court decided that international pilots don't meet that definition because their foreign service doesn't take place IN a foreign country.

See Overseas Aircrew Basing Limited v Commissioner of Taxation [2009] FCA 7 (15 January 2009) (http://www.austlii.edu.au/au/cases/cth/FCA/2009/7.html)

For what it's worth...

[Master Caution]

Cannon Ball and Buzzbox.

I think most if not all basees are now paying full OZ tax - hence the nice little tax rise mentioned above re:super.

I understand some people are commuting but cannot be non-resident because of being caught under one of the four residency tests mentioned e.g. business ties. I understand these people have been studiously meeting 23AG requirements with Excel spreadsheets to make sure they are not in OZ for more than six days per month etc. (this was not previously affected by the ruling Buzzbox mentions - which dealt with based pilots). From 1/7/09 the only way not to pay OZ tax is full non-residency - which can be quite difficult to acheive for some.

[GE90115BL2]

This does not effect HKG based Pilots at all, unless you commute and you spend more than 180 days in oz.

[BuzzBox]

Although FCA 7 deals specifically with based pilots, I'm willing to bet the ATO could take on the commuters using the precedent set by Justice Graham, even if the commuters do meet the absence requirements of s.23AG. Justice Graham argued that international pilots are not engaged in foreign service IN a foreign country, and are therefore not eligible for the exemption under s.23AG. That part of the argument applies to commuters just as much as the basees.

Still, after 1 July it won't matter because hardly anybody will be exempted from paying tax under s.23AG.

[Master Caution]

Some more light reading on 23AG from the Australian yesterday

Tax fears could spur an exodus of exodus | The Australian (http://www.theaustralian.news.com.au/business/story/0,,25476161-36418,00.html)

Net result brain drain from OZ and reduction of investment by expats:sad:

[treboryelk]

brain drain from OZ? how the F*** can that happen?

[mngmt mole]

:ok:....ha ha..