An Australian company is eligible for a refundable tax offset (a seafarer tax offset) for salary, wages and allowances (withholding payments) paid to Australian resident seafarers who are employed to undertake overseas voyages on any eligible vessel for which a certificate under the Shipping Reform (Tax Incentives) Act 2012 is issued (certified vessel), if the company employs the seafarer on such voyages for at least 91 days in the income year. The seafarer tax offset is designed to stimulate opportunities for Australian seafarers to be employed on overseas voyages and to gain maritime skills.
The company eligible for the seafarer tax offset is the company who is employing the individual seafarer. This may not necessarily be the company operating the certified vessel.
For withholding payments to an individual seafarer to be eligible under the seafarer tax offset, the payments must be made in respect of employment that meets certain conditions. Employment on a particular day qualifies if the seafarer:
- Is an Australian resident for tax purposes;
- Is employed as a master, engineer, integrated rating, steward or deck officer and is employed to undertake an overseas voyage;
- Undertakes the voyage on a ship that is a certified vessel for that day.
The seafarer tax offset is equal to 30% of the gross eligible withholding payments.
For more information on the specific requirements of this incentive and how it applies to your circumstances, please contact the ATO.