| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012523403994
Ruling
Subject: Are you entitled to claim a zone tax offset
Question
Are you entitled to claim a zone tax offset for time spent anchored off an external Australian territory?
Answer
No
This ruling applies for the following periods:
Year ended 30 June 2013
The scheme commences on:
1 July 2012
Relevant facts and circumstances
You are employed on a boat which is anchored off an uninhabited external Australian territory for more than half of the financial year.
You do not have access to shore leave during this period.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 79A
Reasons for decision
Section 79A of the Income Tax Assessment Act 1936 (ITAA 1936) provides a rebate to persons who reside in, or who are actually in, a prescribed area. The prescribed areas are referred to as Zone A and Zone B. There are further areas known as "special areas" within those zones.
The prescribed areas of Zone A are specified in Part 1 of Schedule 2 of ITAA 1936. Paragraph 1 of the Schedule defines these areas as certain "portions of mainland Australia". Paragraph 2 includes in the definition "all islands forming part of Australia lying adjacent to the coastline of the portion of Australia described in paragraph 1" and paragraph 3 specifically includes in the definition The Territory of Cocos (Keeling) Islands and The Territory of Christmas Island. Zone B is similarly defined.
Taxation Board of Review No.3 in Case P82, 82 ATC 399; Case 14 26 CTBR (NS) 111 considered the provisions of the Act relating to rebates for residents of isolated areas. In this case, Dr P Gerber (Member) said:
reference to "all that portion of the mainland" would suggest that the territorial sea and coastal waters adjacent to the mainland are excluded from the relevant zones for the purposes of the rebate allowable under sec. 79A. This was the conclusion reached by this Board on two occasions (Case A47, 69 ATC 278 and Case B10, 70 ATC 45), a conclusion which I respectfully adopt as clearly correct.
It follows that the waters adjacent to an island would also be excluded from the relevant zones.
This means that, for you to be considered to be in Zone A or Special Zone A on a given day, you must be physically present on the mainland, on an adjacent island or in the territories of the Cocos Islands or Christmas Island. Time spent at anchor in a locality of, or in the vicinity of, a zone is not considered to be time spent in a zone.
As you have not specifically spent time in a zone, and the external Australian territory is not specifically named in the definition, you cannot claim a zone tax offset.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
