Private ruling: Zone Tax Offset
Date of advice: 15 September 2016
Published: November 2016
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Does X lie within the Special Zone A area for the purposes of the zone tax offset? | A1: Yes.

Relevant facts and circumstances: You have lived in X for the past 3 years. You are not a fly in fly out worker. You are not a drive in drive out worker. X is 25km away from Z and 90 Kms away from Y. Assumption(s) None

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 79A Further issues for you to consider | N/A | Anti-avoidance rules | N/A

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. A location in Zone A or Zone 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 Zone B. The term 'Special Zone Area' is defined as being those points in Zone A or Zone B that were not, as at 1 November 1981, situated 250 kilometres or less by the shortest practicable surface route from the centre point of the nearest urban centre, with a census population from the 1981 census of not less than 2,500 (subsection 79A(3D) of the ITAA 1936). However as mentioned above, for the 'Special Zone' area offset to apply your site must first be located in either Zone A or Zone B. X lies within Special Zone A area. Therefore, on the basis that you satisfy one of the residence requirements contained in subsection 79A(3B) of the ITAA 1936, you are entitled to claim the zone tax offset.