Foreign Service & Income Declaration

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Have you been employed by someone outside of Australia? If you have, you’ll likely need to lodge a tax return to declare any foreign earnings from foreign service.

Foreign service is the service Australian residents provide in a foreign country as an employee or an office holder.

Your foreign earnings include income you earn, such as:

  • salary and wages
  • commissions or bonuses
  • allowances
  • the income you receive under the employee share scheme provisions.

You must include any foreign income from working overseas subject to tax as assessable income in your tax return in the year you earn it.

You may be able to claim a foreign income tax offset for amounts of foreign tax you pay when you lodge your tax return.

Foreign earnings don’t include:

  • continuing pensions, annuities or superannuation payments
  • foreign termination payments
  • the tax-free amount of a genuine redundancy payment or an early retirement scheme payment
  • payments made as an advance loan, restraint of trade payments or payments for personal injury
  • transfers between superannuation funds.

A payment can still qualify as foreign earnings even if it is paid in Australia or not derived when you worked overseas. However, the payment must be attributable to a period of foreign service.

Income from certain types of foreign employment and approved overseas projects may be exempt from tax.

You may need to submit an income tax return for the country from which you have earned income. If you require assistance, start a conversation with your adviser today.

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