What this determination covers
The Australian Taxation Office (ATO) has published a compendium, reference TD 2012/8EC, summarising feedback received during a consultation period (10 June to 17 July 2026) on a draft update to Taxation Determination TD 2012/8.
TD 2012/8 deals with when temporary absences from overseas work still count as foreign service under section 23AG of the Income Tax Assessment Act 1936.
The confirmed rule
The key change confirmed in the final determination is that any time an employee spends in Australia - including time spent attending work meetings, training, or performing other work duties - cannot count as foreign service. The reason stated is that Australia is not a foreign country, and the rule under section 23AG is based on where the person is physically located.
The ATO rejected all nine issues raised by submitters during consultation and made no changes to the draft.
When the updated view applies
The updated view applies from the 2026-27 income year onwards.
Key actions
- If you employ staff posted overseas who return to Australia temporarily for work, review your payroll and PAYG withholding processes - from the 2026-27 income year, any time those staff spend in Australia cannot be treated as foreign service and is taxable in Australia.
- If your payroll system needs updating to track staff movements between Australia and the overseas country, contact the ATO to discuss compliance arrangements - the ATO has indicated it will work through difficulties with employers.
- Review the final consolidated Taxation Determination TD 2012/8, available at ato.gov.au, to understand the confirmed rules, including the treatment of medical escorting, flight delays, international waters, and carer's leave.
- Check whether your FBT obligations for overseas-based staff are affected, as staff moving in and out of tax-exempt status when returning to Australia may change your FBT position.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.