However, from 1 July 2009 onwards s23AG will generally not apply unless the employment income was derived in the following limited circumstances:-

• Individual's employment related to the delivery of Australian official development assistance by their employer;
• The individual's employer was engaged in specified relief or public benevolent activities in the overseas country; or
• The individual was deployed by an Australian Government authority as a ‘disciplined force member' (i.e. defence force and police)

Foreign Income Tax Offset must now be claimed back, but the result for many taxpayers is higher tax rates and lodgement of two tax returns per year (of differing date ranges).

The cost of compliance could be substantial for many young Australians who remain residents, but work overseas for a few years before settling down.