Private ruling: eligibility of zone tax offset
Published: November 2013
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim a zone rebate in respect of the instances you landed in the zone areas? | A1: Yes


Relevant legislative provisions: Income Tax Assessment Act 1936 Section 79A

Reasons for decision: Summary: Section 79A of the Income Tax Assessment Act 1936 allows a tax offset for individuals who are classed as residents of specified remote areas of Australia. These areas are referred to as either a Zone A or Zone B area. A greater tax offset is available for people who have been in particularly isolated parts of Zone A or Zone B. Such areas are referred to as the 'special area' within either zone. Taxation Ruling TR 94/27 provides guidelines in determining whether an individual is in fact a resident of a zone area. TR 94/27 states at paragraphs 10 to 12: For the purposes of section 79A, an individual may be a 'resident' of a relevant area, even though he or she did not 'reside' in the area in the ordinary sense of the word, if the individual was actually in that area, whether continuously or intermittently, for more than one-half of the year of income. In determining whether a person has resided or actually been in the relevant area for the required number of days, we consider that, for the purposes of the residence test in subsection 79A (3B), the word 'day' includes any one or more parts of a calendar day. There is no definition of 'day' in the Income Tax Assessment Act 1936. Whether a fraction or fractions of a day may be treated as being a whole day depends on the intention and the context of the statute in question. We accept that in its context in subsection 79A(3B), the word 'day' is intended to include a fraction or fractions of a day. Therefore, an individual need not actually reside in a zone area in order to qualify for a zone tax offset. An individual can merely be physically present in a zone for a small portion of a day (ie. a truck driver passing though a zone via his route) which can count towards the required 183 days. In your case, as a part of your employment duties, you are required to fly to certain areas and work for short periods on the ground. You have stated that you are physically present in these zone areas for at least 183 days in an income year; however you do not stay in the area overnight. In accordance with the guidelines provided in TR 94/27, the days where you only spend a portion of the day in a special area within Zone A or Zone B still count towards the days you spend in that area for the purposes of the zone tax offset. | Detailed Reasoning - Disclaimer: You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you or to someone acting on your behalf. The Register of private binding rulings is a public record of private rulings issued by the ATO. The register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.

Relevant facts: You are employed as a commercial pilot. | You fly to remote airports. | When at these airports you spend on average one hour on the ground looking after the movement of the baggage and refuelling. | These areas are located within Zone A or Zone B area for the purposes of calculating the amount of your zone tax offset. | You are present in these zone areas on more than 183 separate days each year.