How to get the best advice on expatriate tax issues

When you leave Australia to take up a job overseas, you could still be considered an Australian resident for tax purposes.

This means your income from overseas employment runs the risk of being taxable in Australia, as well as in your new country of employment.

Applicable Australian residents are required to pay tax on their income worldwide.

Known as ‘expat’ income tax, the rule applies even if you spend more than 183 days outside Australia.

Therefore, taking advice from an expert, expatriate financial adviser is essential when seeking overseas employment.

Our advisers can help you in many ways, including gaining big savings on your tax liability.

Interestingly, when a foreign resident takes up employment in Australia, for example, on a 457 visa, they are considered a temporary resident here for tax purposes.

This means they are taxed only on the income they earn in Australia, and not on any income they earn in their home country, or anywhere else in the world.

Lodging your tax return when you leave Australia

Every Australian resident must continue to lodge an Australian income tax return, even if they leave Australia to work.
And while they remain an Australian resident overseas, they should carry out the following to satisfy Australian expat tax rules:

  • Lodge an Australian tax return each year declaring all income from foreign employment, including any income that may be tax exempt
  • Always declare the income, even if it has been already taxed in the country where it was earned
  • Lodge their income tax returns online from overseas.

Any rental income, capital gains, dividends or interest income you receive in your parent country is not subject to tax in Australia.This is because you only pay tax on income you earn in Australia.It is also important to know that while you are a temporary resident, you may still be liable to pay tax in Australia on any income earned overseas.

Therefore, should a 457-visa holder be transferred overseas by his employer, he or she may still be liable to pay tax in Australia on the income they earn overseas.

Foreign Tax Credits Double Taxation

If you pay tax in any overseas jurisdiction and that income is also taxed in Australia, you will be able to claim a credit for the tax you paid to the foreign country in your tax return. Any difference will have to be paid by you: but you will not receive a refund from the ATO if the overseas tax you paid, is more than that payable in Australia.

Double Tax Avoidance Agreements

Australia has Double Tax Avoidance Agreements (DTA) with many countries.These agreements can be very helpful in reducing your tax liability as, in the case of any inconsistencies, they generally prevail over domestic law.
We always recommend Australian expats’ obtain expert financial advice to better understand Australian taxation laws.This advice can also save you from double taxation when you are an Australian resident working overseas.

Tax Return Perth offers excellent advice on expatriate tax issues

At Tax Return Perth you can gain substantial tax savings by engaging one of our experienced expat tax consultants.

Your first consultation is free: so let us assess your tax return requirements and help you to save big dollars on your tax liability.

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