Draft Taxation Determination TD 2002/D3
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Draft Taxation Determination TD 2002/D3
Does any ppruner know of TD 2002/D3 that was waiting for me from my friendly accountant when I returned home to Oz this morning after 3 weeks away ?
The question being asked in the draft is this and I quote " Income tax : exemption for foreign service : do periods of physical presence in Australia constitute a break in foreign service for the purposes of section 23 AG of the Income Tax Assessment Act 1936 ("ITAA 1936") ? "
The actual draft is four pages long , uses an example on page two about an airline pilot who is based o/s and flys internationally and who spends time in Oz.
The draft invites comments up to 8 May 2002 and says on page three paragraph 9 that " This Draft Taxation Determination , when finalised , will apply from 1 July 2002 onwards or its date of effect , whichever is the later. "
Needless to say that this gem from the Australian Taxation Dept. could have serious ramifications on the residency status of many pilots and all that any adverse ruling would entail.
Where are the AFAP when you need them ! HELP !!!!!!!!!
The question being asked in the draft is this and I quote " Income tax : exemption for foreign service : do periods of physical presence in Australia constitute a break in foreign service for the purposes of section 23 AG of the Income Tax Assessment Act 1936 ("ITAA 1936") ? "
The actual draft is four pages long , uses an example on page two about an airline pilot who is based o/s and flys internationally and who spends time in Oz.
The draft invites comments up to 8 May 2002 and says on page three paragraph 9 that " This Draft Taxation Determination , when finalised , will apply from 1 July 2002 onwards or its date of effect , whichever is the later. "
Needless to say that this gem from the Australian Taxation Dept. could have serious ramifications on the residency status of many pilots and all that any adverse ruling would entail.
Where are the AFAP when you need them ! HELP !!!!!!!!!
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Established, where is this TD published? Can you post a copy of it on pprune? or point to a url? I am sure many people would be interested in reading it . Curiosly enough I have just received advice about exactly the situation you are talking about. That advice stated that foreign income is exempt from OZ tax. There was no mention of this TD. Are you saying that this document now says that tax is payable?
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Ivan
My internet skills are less than adequate but if you go to < http://law.ato.gov.au/atolaw > and use the search engine on the left hand side looking for TD 2002/D3 you can read the whole document.
Submissions close on the 8 May 2002 so time is of the essence. It has really ruined my home leave I can tell you !! Of course professional advice is essential and I'm also off to the Fed's office today.
Good luck
My internet skills are less than adequate but if you go to < http://law.ato.gov.au/atolaw > and use the search engine on the left hand side looking for TD 2002/D3 you can read the whole document.
Submissions close on the 8 May 2002 so time is of the essence. It has really ruined my home leave I can tell you !! Of course professional advice is essential and I'm also off to the Fed's office today.
Good luck
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The way I read that is if you do 'grey days,standby days or available days' in oz then that is duty. Days off, holidays etc in Oz are still considered 'foreign service' as long it is reasonable. I note that you probably work in Taiwan. I can assume that you don't do duty in OZ; then therefore you are OK if you have paid tax on that salary abroad. Get some advice and get back to us all and I will follow it up too. I think this is designed to catch pilots such as the CX Oz based guys who do duty for the company in Oz. That duty is no longer considered 'foreign service'.
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Here it is.FOI status: Draft only - for comment
--------------------------------------------------------------------------------
Draft Taxation Determination
Income tax: exemption for foreign service: do periods of physical presence in Australia constitute a break in foreign service for the purposes of section 23AG of the Income Tax Assessment Act 1936 ('ITAA 1936')?
--------------------------------------------------------------------------------
Preamble
Draft Taxation Determinations (DTDs) present the preliminary, though considered, views of the Australian Taxation Office. DTDs should not be relied on; only final Taxation Determinations represent authoritative statements by the Australian Taxation Office.
1. Yes, unless subsections 23AG(6) to (6E) or Taxation Ruling TR 96/15 apply.
2. The exemption under subsection 23AG(1) requires continuous foreign service for a period of not less than 91 days. Subsection 23AG(7) says in part that foreign service means service in a foreign country. Easy access to rapid transport (such as commercial jets) means that some employees are able to physically reside in Australia and yet perform service overseas. One question is whether the time spent in Australia while an employee is contracted to perform foreign service but is not actively performing the duties of the office or employment is not a break in the foreign service period by virtue of subsections 23AG(6) to (6E) or Taxation Ruling TR 96/15.
3. Such periods, depending on the particular contractual arrangements,F1 could include:
"compulsory lay off/over days" where an employee is prevented from working perhaps because of certain legal requirements;
"rostered days off" (also known as "designated duty free days") where an employee is given an equivalent amount of time for weekends, public holidays or a day off per month;
"available days" (also known as "grey days") where no work is allocated but the employee is available for duty;
"recreation or sick leave" as per subsection 23AG(6).F2
4. "Compulsory lay off days" and "rostered days off" fall within the existing type of temporary absences set out under paragraph 11(b) of Taxation Ruling TR 96/15. Such absences - where all the conditions are met as set out in the paragraph below - form part of a person's foreign service period.
5. Where there are temporary absences that fall within paragraph 11(b) of Taxation Ruling TR 96/15, a reasonableness test will be applied. Paragraph 11(b) of Taxation Ruling TR 96/15 is therefore withdrawn and replaced by the following:
"A period of foreign service is taken to include weekends, public holidays, rostered days off and flexidays, and days off in lieu of such, provided such breaks are authorised by the terms and conditions of the foreign service employment or engagement. Any such breaks utilised to visit Australia or another foreign country do not break the continuity of service provided that there are no restrictions in the terms and conditions of employment or engagement prohibiting the employee or officer from leaving the country of foreign service on those occasions. Where such breaks are used by the person to visit Australia or another foreign country they must not be excessive by comparison with the scheduled period of foreign service."
6. Where an employee spends "available days" in Australia this period is considered to be a break in foreign service because it is service in Australia, unless subsections 23AG(6A) to (6E) apply.
Example
Pilots
7. A pilot physically resides in Australia. The airline she works for flies the pilot from Australia to another country where she commences her international flight service. The pilot flies for approximately 800 hours during the income year. She is entitled to 6 weeks annual leave and also has other days where she is not actively performing service such as "compulsory lay off" days, "rostered days off" and "available" days which in conjunction with holidays and other leave she often chooses to spend in Australia. Typically, the pilot flies internationally (including stopovers and rests) for five days and receives 12 days off. Setting aside periods during the income year when recreation leave is taken, the amount of time that a pilot spends in Australia either on "compulsory lay off" days, "rostered days off" or "available days" in between periods of foreign service would lead to a conclusion that there is a break in the foreign service period. That is because the "available days" spent in Australia do not form part of foreign service and/or because the "rostered days off" and "compulsory lay off" days are excessive compared to the scheduled period of foreign service over an income year. Moreover, as the breaks in foreign service typically exist between periods of "active" foreign service of five days each time, there is no period during the income year where the foreign service period is likely to be for 91 continuous days or more. Therefore, the pilot will not be entitled to the exemption under section 23AG.
8. Where the matters listed in paragraph 177D(b) of the ITAA 1936 indicate that a person has entered into or carried out an arrangement with the sole or dominant purpose of obtaining a tax benefit under section 23AG, the Commissioner will consider applying Part IVA of the ITAA 1936. The application of Part IVA is a question of fact to be determined on a case by case basis.
9. This Draft Taxation Determiantion, when finalised, will apply from 1 July 2002 onwards or its date of effect, whichever is the later. It will, at that time withdraw any private ruling or previous public rulings to the extent that it is inconsistent with the Taxation Determination.F3 Finally, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).
Your comments
10. We invite you to comment on this draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period.
Comments by Date: 8 May 2002
Contact Officers: John Passant
E-Mail address: [email protected]
Telephone: (02) 6216 5755
Facsimile: (02) 6216 5899
Address: Australian Taxation Office
PO Box 900
Civic Square ACT 2608
--------------------------------------------------------------------------------
Commissioner of Taxation
--------------------------------------------------------------------------------
Draft Taxation Determination
Income tax: exemption for foreign service: do periods of physical presence in Australia constitute a break in foreign service for the purposes of section 23AG of the Income Tax Assessment Act 1936 ('ITAA 1936')?
--------------------------------------------------------------------------------
Preamble
Draft Taxation Determinations (DTDs) present the preliminary, though considered, views of the Australian Taxation Office. DTDs should not be relied on; only final Taxation Determinations represent authoritative statements by the Australian Taxation Office.
1. Yes, unless subsections 23AG(6) to (6E) or Taxation Ruling TR 96/15 apply.
2. The exemption under subsection 23AG(1) requires continuous foreign service for a period of not less than 91 days. Subsection 23AG(7) says in part that foreign service means service in a foreign country. Easy access to rapid transport (such as commercial jets) means that some employees are able to physically reside in Australia and yet perform service overseas. One question is whether the time spent in Australia while an employee is contracted to perform foreign service but is not actively performing the duties of the office or employment is not a break in the foreign service period by virtue of subsections 23AG(6) to (6E) or Taxation Ruling TR 96/15.
3. Such periods, depending on the particular contractual arrangements,F1 could include:
"compulsory lay off/over days" where an employee is prevented from working perhaps because of certain legal requirements;
"rostered days off" (also known as "designated duty free days") where an employee is given an equivalent amount of time for weekends, public holidays or a day off per month;
"available days" (also known as "grey days") where no work is allocated but the employee is available for duty;
"recreation or sick leave" as per subsection 23AG(6).F2
4. "Compulsory lay off days" and "rostered days off" fall within the existing type of temporary absences set out under paragraph 11(b) of Taxation Ruling TR 96/15. Such absences - where all the conditions are met as set out in the paragraph below - form part of a person's foreign service period.
5. Where there are temporary absences that fall within paragraph 11(b) of Taxation Ruling TR 96/15, a reasonableness test will be applied. Paragraph 11(b) of Taxation Ruling TR 96/15 is therefore withdrawn and replaced by the following:
"A period of foreign service is taken to include weekends, public holidays, rostered days off and flexidays, and days off in lieu of such, provided such breaks are authorised by the terms and conditions of the foreign service employment or engagement. Any such breaks utilised to visit Australia or another foreign country do not break the continuity of service provided that there are no restrictions in the terms and conditions of employment or engagement prohibiting the employee or officer from leaving the country of foreign service on those occasions. Where such breaks are used by the person to visit Australia or another foreign country they must not be excessive by comparison with the scheduled period of foreign service."
6. Where an employee spends "available days" in Australia this period is considered to be a break in foreign service because it is service in Australia, unless subsections 23AG(6A) to (6E) apply.
Example
Pilots
7. A pilot physically resides in Australia. The airline she works for flies the pilot from Australia to another country where she commences her international flight service. The pilot flies for approximately 800 hours during the income year. She is entitled to 6 weeks annual leave and also has other days where she is not actively performing service such as "compulsory lay off" days, "rostered days off" and "available" days which in conjunction with holidays and other leave she often chooses to spend in Australia. Typically, the pilot flies internationally (including stopovers and rests) for five days and receives 12 days off. Setting aside periods during the income year when recreation leave is taken, the amount of time that a pilot spends in Australia either on "compulsory lay off" days, "rostered days off" or "available days" in between periods of foreign service would lead to a conclusion that there is a break in the foreign service period. That is because the "available days" spent in Australia do not form part of foreign service and/or because the "rostered days off" and "compulsory lay off" days are excessive compared to the scheduled period of foreign service over an income year. Moreover, as the breaks in foreign service typically exist between periods of "active" foreign service of five days each time, there is no period during the income year where the foreign service period is likely to be for 91 continuous days or more. Therefore, the pilot will not be entitled to the exemption under section 23AG.
8. Where the matters listed in paragraph 177D(b) of the ITAA 1936 indicate that a person has entered into or carried out an arrangement with the sole or dominant purpose of obtaining a tax benefit under section 23AG, the Commissioner will consider applying Part IVA of the ITAA 1936. The application of Part IVA is a question of fact to be determined on a case by case basis.
9. This Draft Taxation Determiantion, when finalised, will apply from 1 July 2002 onwards or its date of effect, whichever is the later. It will, at that time withdraw any private ruling or previous public rulings to the extent that it is inconsistent with the Taxation Determination.F3 Finally, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).
Your comments
10. We invite you to comment on this draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period.
Comments by Date: 8 May 2002
Contact Officers: John Passant
E-Mail address: [email protected]
Telephone: (02) 6216 5755
Facsimile: (02) 6216 5899
Address: Australian Taxation Office
PO Box 900
Civic Square ACT 2608
--------------------------------------------------------------------------------
Commissioner of Taxation
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"Where such breaks are used by the person to visit Australia or another foreign country they must not be excessive by comparison with the scheduled period of foreign service".
Just had a chat with my taxman about this and the above paragraph is to be inserted into TR96/15. That is what TD2002/D3 is all about. What this means is that 'excessive' amounts of time off will not be considered 'foreign service'. 23AG identifies certain temporary absences from a period of foreign service; those days representing weekends, public holidays, rostered days off, flexidays and days off in lieu. These days are consistent with a normal work regime and therefore 23 AG still applies and thus no tax is payable if tax has been paid already on that income overseas. This only applies if the terms of the contract overseas allow for time off to be taken in Australia.
What they are trying to do now is catch those that have large amounts of time off in Australia that is not considered to be covered by the above types of days off. Thus in para. 7 they give an example of someone who works 5 days and then has 12 days off. That is now considered 'excessive' and is not covered by TR96/15 and 23AG and they propose to tax it!
Don't you just love them
Just had a chat with my taxman about this and the above paragraph is to be inserted into TR96/15. That is what TD2002/D3 is all about. What this means is that 'excessive' amounts of time off will not be considered 'foreign service'. 23AG identifies certain temporary absences from a period of foreign service; those days representing weekends, public holidays, rostered days off, flexidays and days off in lieu. These days are consistent with a normal work regime and therefore 23 AG still applies and thus no tax is payable if tax has been paid already on that income overseas. This only applies if the terms of the contract overseas allow for time off to be taken in Australia.
What they are trying to do now is catch those that have large amounts of time off in Australia that is not considered to be covered by the above types of days off. Thus in para. 7 they give an example of someone who works 5 days and then has 12 days off. That is now considered 'excessive' and is not covered by TR96/15 and 23AG and they propose to tax it!
Don't you just love them
Last edited by Ivan Urge; 24th Apr 2002 at 15:35.
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The Federation's response :-
The feds are aware of draft determination TD 2002/D3 which they received early April and they submitted a response on the 23 April 2002. It reads as follows.
" Thank you for the opportunity to comment on the proposed Draft Taxation Determination covering certain aspects of the section 23 AG exemption, initially received on 28 March with a slightly amended copy , titled TD 2002/D3, received on 5 April 2002.
Due to the limited time available we have only been able to consult with only a small number of constituents who work for overseas airlines. Notwithstanding this we make the following comments on the proposed Draft Taxation Determination.
Background
--------------
The Federation understands that AG23 provides :
Where a resident , being a natural person , has been engaged in foreign service for a continuous period of not less than 91 days , any foreign earnings derived by the person from that foreign service is exempt from tax.
Current "General" Interpretation
-----------------------------------------
To date it appears that under TR96/15 paragraph 11(b) the continuity of foreign service has not been deemed to have been broken where the periods spent in Australia are consistent with the overseas contractual arrangements. It is our understanding that this has generally meant " compulsory lay off/over days ", "rostered days off " or "designated duty free days ", "available days " or "grey days ", "recreation leave ", and "sick leave " spent in Australia or another country does not break the continuity of foreign service.
TR96/15 paragraphs 11(a) and 11(c) also provides that the continuity of foreign service is not broken by business trips to Australia and compassionate leave in Australia.
Purpose of proposed Draft Taxation Determination (TD 2002/D3 )
----------------------------------------------------------------------------------
It appears that the primary purpose of the proposed Draft Taxation Determination (TD 2002/D3 ) is to apply an additional or overriding "reasonableness test " to the amount of days spent in Australia under the TR96/15 paragraph 11(b). In particular by adding the sentence:
Where such breaks are used by the person to visit Australia or another foreign country they must not be excessive by comparison with the scheduled period of foreign service.
Areas of Concern
---------------------
The major areas of concern in relation to the proposed Draft Taxation Determination (TD 2002/D3 ) are:
1. The " reasonableness test " as it is currently defined is too broad and
subjective. In essence, what is defined as " too excessive by comparison
with the scheduled period of foreign service " appears to be open to
numerous interpretations.
2. It also appears that paragraph 3 of the proposed Draft Taxation
Determination (TD 2002/D3 ) suggests that " available days " or " grey
days " may not break the continuity of employment subject to contractual
arrangements but then in the example at paragraph 7 suggests that
" available days " spent in Australia do not form part of foreign service.
The issue of where " available days " are spent appears ambiguous.
Issues for Consideration
-------------------------------
There is a broad range of contractual arrangements or options currently entered into by and/or available to Federation members flying for overseas airlines. It should also be noted that many of these pilots maintain a residence overseas ( not just a residence in Australia ).
While it is difficult ( perhaps impossible ) to develop or describe the standard or usual arrangements, during consultation with a small number of our overseas members the following example of the type of arrangements pilots at Korean Air was provided:
" Under our contract we are required to provide 20 days of continuous duty
and then receive 9 days off. We are also entitled to 24 days pa annual
leave. This can be applied for at any time, i.e. monthly, annually, never.
At the completion of our duty period we are entitled to stay in Korea at our
expense or travel to any other place. Our movement is unrestricted either
commercially or by regulation. All foreign pilots working for Korean Air are
registered as " Resident Aliens ", are subject to Korean tax and obliged to
furnish a Korean taxation return. For taxation purposes we deal with a
Taxation Specialist ( SAMIL Taxpayers Association ) that is a division of
Price Waterhouse Korea set up and appointed by the Korean Taxation
Authorities for the specific purpose of handling expatriate taxation returns.
The Korean Taxation authorities actively encourage the use of this conduit.
The other salient fact is that there does exist between Korea and Australia,
a Double Taxation Agreement, which I understand releases a worker from
taxation obligations in his country provided he meets all his taxation
obligations in the income source country. "
We understand that currently these pilots would be exempt from tax in Australia and based on our reading of the proposed Draft Taxation Determination (TD 2002/D3 ) assume that this would remain the case.
It should also be noted that a number of Australian pilots take short-term overseas contracts from time to time. These contracts vary greatly in duration however we assume that where these pilots meet the requirements of AG23 (foreign service of not less than 91 days ) that the component of income earned under the overseas contract would be viewed as exempt from Australian tax.
Other factors that emerged in discussions with individual overseas pilot members regarding the proposed Draft Taxation Determination (TD 2002/D3 ) included:
~ Some are required to live in the country in which the airline is based and
as a result have provisions for their families to visit them there ;
~ A number have been promoted/appointed to full time management,
supervisory and instructing roles. They have desks, business cards,
formal reporting roles within the foreign airline structure and are required
to fit any days off within their management work requirements. Examples
include, Team Leader- Audit Business Unit, Assistant Chief Pilot, Auditor-
Audit Business Unit, and Simulator Instructor;
~ When travelling home these pilots are on the GD and formally part of the
crew. This is especially important since Sept 11. For example, they can't
drink alcohol because they are deemed part of the "chain of command ";
~ They often keep " living " things at the foreign airline base, such as full
sets of clothes for each season. Casual wear for days off there etc;
~ They often have local ISPs, not just Australian ones;
~ They have no "right" to travel home on any given day. Their "official" days
off are only 6 days per month. Any days over this are purely optional and
can be paid out; and
~ They are upgraded under the training system in the same way as the
"local" pilots ( those who are citizens of the airlines base ).
Conclusion
-------------
Overall in relation to the proposed Draft Taxation Determination (TD 2002/D3) the Federation would seek :
1. Clarification of what would be regarded by the ATO as "excessive" breaks
used by the person to visit Australia or another foreign country by
comparison with the scheduled period of foreign service;and
2. Clarification of when "available days" or "grey days" spent in Australia as
per their contractual arrangements are deemed to break continuity of
foreign service or not break continuity of foreign service.
This would assist and hopefully provide certainty to our members flying for an overseas carrier while maintaining a residence in Australia.
End.
The feds are aware of draft determination TD 2002/D3 which they received early April and they submitted a response on the 23 April 2002. It reads as follows.
" Thank you for the opportunity to comment on the proposed Draft Taxation Determination covering certain aspects of the section 23 AG exemption, initially received on 28 March with a slightly amended copy , titled TD 2002/D3, received on 5 April 2002.
Due to the limited time available we have only been able to consult with only a small number of constituents who work for overseas airlines. Notwithstanding this we make the following comments on the proposed Draft Taxation Determination.
Background
--------------
The Federation understands that AG23 provides :
Where a resident , being a natural person , has been engaged in foreign service for a continuous period of not less than 91 days , any foreign earnings derived by the person from that foreign service is exempt from tax.
Current "General" Interpretation
-----------------------------------------
To date it appears that under TR96/15 paragraph 11(b) the continuity of foreign service has not been deemed to have been broken where the periods spent in Australia are consistent with the overseas contractual arrangements. It is our understanding that this has generally meant " compulsory lay off/over days ", "rostered days off " or "designated duty free days ", "available days " or "grey days ", "recreation leave ", and "sick leave " spent in Australia or another country does not break the continuity of foreign service.
TR96/15 paragraphs 11(a) and 11(c) also provides that the continuity of foreign service is not broken by business trips to Australia and compassionate leave in Australia.
Purpose of proposed Draft Taxation Determination (TD 2002/D3 )
----------------------------------------------------------------------------------
It appears that the primary purpose of the proposed Draft Taxation Determination (TD 2002/D3 ) is to apply an additional or overriding "reasonableness test " to the amount of days spent in Australia under the TR96/15 paragraph 11(b). In particular by adding the sentence:
Where such breaks are used by the person to visit Australia or another foreign country they must not be excessive by comparison with the scheduled period of foreign service.
Areas of Concern
---------------------
The major areas of concern in relation to the proposed Draft Taxation Determination (TD 2002/D3 ) are:
1. The " reasonableness test " as it is currently defined is too broad and
subjective. In essence, what is defined as " too excessive by comparison
with the scheduled period of foreign service " appears to be open to
numerous interpretations.
2. It also appears that paragraph 3 of the proposed Draft Taxation
Determination (TD 2002/D3 ) suggests that " available days " or " grey
days " may not break the continuity of employment subject to contractual
arrangements but then in the example at paragraph 7 suggests that
" available days " spent in Australia do not form part of foreign service.
The issue of where " available days " are spent appears ambiguous.
Issues for Consideration
-------------------------------
There is a broad range of contractual arrangements or options currently entered into by and/or available to Federation members flying for overseas airlines. It should also be noted that many of these pilots maintain a residence overseas ( not just a residence in Australia ).
While it is difficult ( perhaps impossible ) to develop or describe the standard or usual arrangements, during consultation with a small number of our overseas members the following example of the type of arrangements pilots at Korean Air was provided:
" Under our contract we are required to provide 20 days of continuous duty
and then receive 9 days off. We are also entitled to 24 days pa annual
leave. This can be applied for at any time, i.e. monthly, annually, never.
At the completion of our duty period we are entitled to stay in Korea at our
expense or travel to any other place. Our movement is unrestricted either
commercially or by regulation. All foreign pilots working for Korean Air are
registered as " Resident Aliens ", are subject to Korean tax and obliged to
furnish a Korean taxation return. For taxation purposes we deal with a
Taxation Specialist ( SAMIL Taxpayers Association ) that is a division of
Price Waterhouse Korea set up and appointed by the Korean Taxation
Authorities for the specific purpose of handling expatriate taxation returns.
The Korean Taxation authorities actively encourage the use of this conduit.
The other salient fact is that there does exist between Korea and Australia,
a Double Taxation Agreement, which I understand releases a worker from
taxation obligations in his country provided he meets all his taxation
obligations in the income source country. "
We understand that currently these pilots would be exempt from tax in Australia and based on our reading of the proposed Draft Taxation Determination (TD 2002/D3 ) assume that this would remain the case.
It should also be noted that a number of Australian pilots take short-term overseas contracts from time to time. These contracts vary greatly in duration however we assume that where these pilots meet the requirements of AG23 (foreign service of not less than 91 days ) that the component of income earned under the overseas contract would be viewed as exempt from Australian tax.
Other factors that emerged in discussions with individual overseas pilot members regarding the proposed Draft Taxation Determination (TD 2002/D3 ) included:
~ Some are required to live in the country in which the airline is based and
as a result have provisions for their families to visit them there ;
~ A number have been promoted/appointed to full time management,
supervisory and instructing roles. They have desks, business cards,
formal reporting roles within the foreign airline structure and are required
to fit any days off within their management work requirements. Examples
include, Team Leader- Audit Business Unit, Assistant Chief Pilot, Auditor-
Audit Business Unit, and Simulator Instructor;
~ When travelling home these pilots are on the GD and formally part of the
crew. This is especially important since Sept 11. For example, they can't
drink alcohol because they are deemed part of the "chain of command ";
~ They often keep " living " things at the foreign airline base, such as full
sets of clothes for each season. Casual wear for days off there etc;
~ They often have local ISPs, not just Australian ones;
~ They have no "right" to travel home on any given day. Their "official" days
off are only 6 days per month. Any days over this are purely optional and
can be paid out; and
~ They are upgraded under the training system in the same way as the
"local" pilots ( those who are citizens of the airlines base ).
Conclusion
-------------
Overall in relation to the proposed Draft Taxation Determination (TD 2002/D3) the Federation would seek :
1. Clarification of what would be regarded by the ATO as "excessive" breaks
used by the person to visit Australia or another foreign country by
comparison with the scheduled period of foreign service;and
2. Clarification of when "available days" or "grey days" spent in Australia as
per their contractual arrangements are deemed to break continuity of
foreign service or not break continuity of foreign service.
This would assist and hopefully provide certainty to our members flying for an overseas carrier while maintaining a residence in Australia.
End.
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Not having a go at the individuals for trying to do the best for themselves and their families but -
I have a problem with the concept of pilots living in Australia with them and their families using the facilities and services provided by tax the tax dollars of normal hard working Australians and not paying income tax here. If you want to live here and use the facilities and services here then I do not think it is unreasonable for the tax office to ask you to contribute.
Flame away
I have a problem with the concept of pilots living in Australia with them and their families using the facilities and services provided by tax the tax dollars of normal hard working Australians and not paying income tax here. If you want to live here and use the facilities and services here then I do not think it is unreasonable for the tax office to ask you to contribute.
Flame away
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Sodoff, in the micro world you may have a point. However, in the macro world there are global tax treaties that all basically say the same thing (except for Helens world); That is, in principle only one country has taxing rights. If you have worked and paid tax in Upper Volta, have a home in Estonia, wife lives in Ethiopia, and kids study in Romania then why should you pay taxes in all those places. What one country misses out on the other one gains on. It is the global merry-go round of taxes.
Having said that, in Helens world no such order exists; if you worked in Mexico and paid less tax there than you would have paid on that salary in NZ then you owe Helen money if the wife and kids live in NZ.
Having said that, in Helens world no such order exists; if you worked in Mexico and paid less tax there than you would have paid on that salary in NZ then you owe Helen money if the wife and kids live in NZ.
Last edited by Ivan Urge; 24th Apr 2002 at 15:33.
Join Date: Jan 2001
Location: Wabag
Posts: 104
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I think the Federation has not gone far enough in highlighting the nature of work of a pilot and the characteristics of a typical pilots schedule; particularly that of a long haul pilot who is based in Australia. By very definition it is impossible to see such a pilot have the same amount of time off as a 9 to 5 office worker, and moreover to conform to sterotypical definitions of 'days' on duty. Around the clock duty, sometimes starting near midnight and covering several dates and time zones would be closer to the truth. I am not an AFAP member but this is a very real issue for many. I will be lobbying on this one direct to the ATO and I suggest AFAP members start demanding more for their money from its office bearers.
Last edited by Ivan Urge; 24th Apr 2002 at 15:53.
