The Federal government recently announced that it will introduce reforms to the living-away-from-home-allowance (LAFHA) concessions currently available under Australia’s tax laws.
From 1 July 2012, any such allowance will be taxable if an employee does not maintain a home for their use in Australia which they are living away from for work purposes. This will adversely affect the tax position of a substantial number of employees currently receiving a LAFHA.
Tax will be payable at marginal rates on the affected employees’ LAFHAs, which may increase the cost of employing overseas residents.
If you are currently employing people in Australia and paying a LAFHA then there is a need to review your current arrangements and determine whether an additional tax liability is likely to arise.
Should you require any further information concerning the proposed changes please contact Murray Howlett from our Taxation Services Division on (07) 3023 1300.