The zone tax offset is a tax offset for people who are residents of either specified remote areas or isolated areas of Australia. This doesn’t include an offshore oil or gas rig.
Remote areas are either Zone A or Zone B areas as specified in the Australian zone list. There are also special areas within these zones. Some new localities may meet the requirements to be in a special area but are not yet included in the Australian zone list.
Your eligibility is based on your usual place of residence. To claim the zone tax offset your usual place of residence needs to be both:
- a remote or isolated area (on the Australian zone list)
- your residence for 183 days or more during the income year.
If your usual place of residence was in a zone for less than 183 days in the income year, you may still be able to claim the zone offset if:
- your usual place of residence was in a zone for a continuous period of less than 5 years, and
- you were unable to claim in the first year because it was not your residence for 183 days or more
- the total of the days you lived there in the first year and the current income year is 183 days or more
- the period you lived in a zone in the current income year includes the first day of the income year.
You can now only claim this offset if your usual place of residence is in an eligible zone. This means you can no longer claim the offset if you are a ‘fly-in, fly-out worker’ who works in a zone area but lives elsewhere.
Example 1: no residence in a prescribed zone
Levi is an engineer who lives in Adelaide. He flies to Alice Springs for 12-day shifts at an engineering firm. He then travels back to Adelaide for his days off (which vary between 4 and 8 days in a row).
Levi’s usual place of residence (Adelaide) is not within a prescribed zone, even though he is in Alice Springs for 183 days or more. This means he is unable to claim the zone tax offset.
Example 2: residence in a remote area
Jonte is an engineer who lives in Darwin (located in Zone A). He travels to Kununurra in Western Australia (located in a Zone A special area) for his job in the mining industry.
In his usual shift, Jonte drives to Kununurra, works 14 days at the mine and drives back to Darwin, where he remains for 16 days.
Jonte is eligible for the Zone A tax offset because his usual place of residence is in Darwin (Zone A).