Private ruling: Eligibility for a zone tax offset
Published: September 2013
Date scheme commenced: 1 July 2012

Ruling: A1: No

Relevant facts and circumstances: You lived and worked near a small town in a certain state for part of the financial year. The small town that was nearby was over 300 km from a large coastal city. The small town does not appear in the ATO's Zone list for the purposes of the zone tax offset.

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

Reasons for decision: Summary: A zone tax offset is provided under subsection 79A(1) of the Income Tax Assessment Act 1936 (ITAA 1936) for individuals who are residents of certain areas which are subject to uncongenial climatic conditions, are isolated, or where the cost of living is high. These areas are comprised of two zones - Zone A and Zone B. Zone A comprises those areas where the above factors are more pronounced whilst Zone B comprises the less badly affected areas. For the purposes of the zone tax offset, Zone A and Zone B are defined at subsection 79A(4) of the ITAA 1936 to mean the area described in Part I and Part II of Schedule 2 of the ITAA 1936. The areas described in Schedule 2 of the ITAA 1936 refer to certain parts of the mainland of Australia and islands forming part of Australia. A location in Zone A or B that is particularly remote may be considered to lie in a special zone area. Special zone areas attract a higher rate of zone tax offset than the 'ordinary' area of Zone A or B. In your case, you lived and worked in X for part of the financial year. We accept that X may be remote in respect of distance from the nearest urban centre. However, X is not an area described within Part I and Part II of Schedule 2 of the ITAA 1936, and therefore is not an area in Zone A or Zone B as defined at subsection 79A(4) of the ITAA 1936. Consequently, you are not entitled to a zone tax offset.

Subject: Eligibility for a zone tax offset: Are you entitled to zone tax offset for the period of time that you lived and worked in X?