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Tax changes for expats


Bikeman93

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On 2/5/2018 at 10:31 AM, Bikeman93 said:

https://www.ato.gov.au/Rates/Individual-income-tax-rates/

 

A foreign (non) resident is an Australian who spends half the year overseas. Then a flat tax of 32% applies on all Australian earned income.

What the heck?  I thought the USA had some interesting tax things, and things like how to qualify for tax exemption while living over seas.  Here it sound like Australia is doing the exact opposite.  32% seems pretty high, especially since for 6 months work one would probably not be making too much money and would be in a lower tax bracket.  But it says "earned income" so I assume Oz tax man wouldn't count investment income, dividends, interest etc.  So if one were retired outside of Oz, the 32% would not be an issue, but if one went out and back in and worked, wow.  32%

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All this sounds a bit like the proposal which HMRC floated a while back to deny UK tax non-residents entitlement to the annual personal tax-free allowance. Fortunately for us British expats this proposal was booted into the long grass - although ominous-sounding murmurings were made at the time about the possibility of reviving it at some point in the future. But thanks to more pressing Brexit priorities for Her Majesy's Government it is to be hoped that any revival would now sink even further into the deep horizon.

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On 07/02/2018 at 1:38 PM, OJAS said:

All this sounds a bit like the proposal which HMRC floated a while back to deny UK tax non-residents entitlement to the annual personal tax-free allowance. Fortunately for us British expats this proposal was booted into the long grass - although ominous-sounding murmurings were made at the time about the possibility of reviving it at some point in the future. But thanks to more pressing Brexit priorities for Her Majesy's Government it is to be hoped that any revival would now sink even further into the deep horizon.

and the removal of the facist moron George Osborne also helped

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On 2/5/2018 at 10:31 AM, Bikeman93 said:

https://www.ato.gov.au/Rates/Individual-income-tax-rates/

 

A foreign (non) resident is an Australian who spends half the year overseas. Then a flat tax of 32% applies on all Australian earned income.

 

Well, is your earned income "Australian Earned Income"? 

 

On 2/6/2018 at 11:42 PM, gk10002000 said:

What the heck?  I thought the USA had some interesting tax things, and things like how to qualify for tax exemption while living over seas.  Here it sound like Australia is doing the exact opposite.  32% seems pretty high, especially since for 6 months work one would probably not be making too much money and would be in a lower tax bracket.  But it says "earned income" so I assume Oz tax man wouldn't count investment income, dividends, interest etc.  So if one were retired outside of Oz, the 32% would not be an issue, but if one went out and back in and worked, wow.  32%

 

They used to be very lax, but they changed the rules a few years ago. The USA we have to spend 330 days outside the USA to qualify for the exclusion, but Oz WAS 180 days. Now, nope. The UK is still 180 days I believe. 

 

So it used to be the USA was the worst but now its UK, USA, then Oz. 


And I believe when they enacted this law, they back-dated it a few years as well. I know a couple guys offshore that got mega-screwed by it. 

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On ‎2‎/‎7‎/‎2018 at 3:42 PM, gk10002000 said:

What the heck?  I thought the USA had some interesting tax things, and things like how to qualify for tax exemption while living over seas.  Here it sound like Australia is doing the exact opposite.  32% seems pretty high, especially since for 6 months work one would probably not be making too much money and would be in a lower tax bracket.  But it says "earned income" so I assume Oz tax man wouldn't count investment income, dividends, interest etc.  So if one were retired outside of Oz, the 32% would not be an issue, but if one went out and back in and worked, wow.  32%

They dangle the carrot, let some get the carrot, then fry them with the carrot

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7 hours ago, UncleTouchyFingers said:

 

Well, is your earned income "Australian Earned Income"? 

 

 

They used to be very lax, but they changed the rules a few years ago. The USA we have to spend 330 days outside the USA to qualify for the exclusion, but Oz WAS 180 days. Now, nope. The UK is still 180 days I believe. 

 

So it used to be the USA was the worst but now its UK, USA, then Oz. 


And I believe when they enacted this law, they back-dated it a few years as well. I know a couple guys offshore that got mega-screwed by it. 

I cant see anywhere where it says "earned income", just says income.

Correct me if I am wrong.

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1 hour ago, Bikeman93 said:

I cant see anywhere where it says "earned income", just says income.

Correct me if I am wrong.

Says exactly that in your second post. Post number 3 in here. 

 

Literally the last 3 words of it: 

 

On 2/5/2018 at 10:31 AM, Bikeman93 said:

https://www.ato.gov.au/Rates/Individual-income-tax-rates/

 

A foreign (non) resident is an Australian who spends half the year overseas. Then a flat tax of 32% applies on all Australian earned income.

Reads to me like if it isn’t Australian earned Income then you’d be a lot better off. 

 

AUSTRALIAN earned income = money MADE in OZ. 

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14 hours ago, UncleTouchyFingers said:

Says exactly that in your second post. Post number 3 in here. 

 

Literally the last 3 words of it: 

 

Reads to me like if it isn’t Australian earned Income then you’d be a lot better off. 

 

AUSTRALIAN earned income = money MADE in OZ. 

Yeah, I know. I am confused too. Damn semantics.

Tax used to be about numbers. 

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Just been browsing the AU Gov Tax site

This comment is just for people that still work in Auss alone

 

The way I see it there is no need to worry about this 183 day rule since you still live in Auss

 

If you did go overseas for work you have to declare any earnings (taxed or not ) , as this will determine your Medicare & other payments 

 

A non Resident is a person who takes up a permanent address (maybe like your own condo here )

OR has declared themselves leaving Auss permanently 

 

THIS IS BRIEF 

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On 2/7/2018 at 11:42 AM, gk10002000 said:

What the heck?  I thought the USA had some interesting tax things, and things like how to qualify for tax exemption while living over seas.  Here it sound like Australia is doing the exact opposite.  32% seems pretty high, especially since for 6 months work one would probably not be making too much money and would be in a lower tax bracket.  But it says "earned income" so I assume Oz tax man wouldn't count investment income, dividends, interest etc.  So if one were retired outside of Oz, the 32% would not be an issue, but if one went out and back in and worked, wow.  32%

All income is taxable in Auss including interest/dividends ect

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On 2/8/2018 at 7:58 PM, UncleTouchyFingers said:

I know a couple guys offshore that got mega-screwed by it. 

Yes Auss dropped all privileges for working overseas - It is all declarable (taxed or untaxed ) 

 

They were probably only paying 10 % tax or whatever the deal was, but since the 180 day limit was dropped they're open to the full tax upto 50%

 

About the non resident 183 days = This is what the yanks done on the rigs in nth West Auss 

 

Since they were non residents they would of had to pay full Auss taxes if they stayed more then 183 days (in a year)  so guess what

They had yearly shifts that didn't allow this

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1 minute ago, BEVUP said:

Yes Auss dropped all privileges for working overseas - It is all declarable (taxed or untaxed ) 

 

They were probably only paying 10 % tax or whatever the deal was, but since the 180 day limit was dropped they're open to the full tax upto 50%

 

About the non resident 183 days = This is what the yanks done on the rigs in nth West Auss 

 

Since they were non residents they would of had to pay full Auss taxes if they stayed more then 183 days (in a year)  so guess what

They had yearly shifts that didn't allow this

 

When I worked in Bass Straight we worked whatever (over 240 days/year) and the company paid our taxes on our behalf to OZ (our take home wages never changed) and when they dont, they calculate OZ tax so that when paid, we stall walk with the same take home pay. (Im American) 

 

And because we were working in OZ, and because we were "paying tax" already to OZ, Americans got a tax credit in the US. 

 

Example: if you are working in Thailand and getting paid in Thailand and paying tax on that income in Thailand then even in Oz you get credits/deductions for the tax paid in Thailand. No country that I know of double taxes income. 

 

No matter what though you have to declare all your money, but what you end up paying in tax is gonna be lower if you already pay in another country. 

 

Thats what I'm asking in that another post:

 

If its money made in OZ you will be taxed differently than if its money made in another country and taxes paid on it to that other country. 

 

But anyway as far as OP goes he needs to do a ton of reading or spend a couple hundred dollars and hire an accountant to explain/do his taxes for him at least for a year or 2. 

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18 minutes ago, UncleTouchyFingers said:

 

When I worked in Bass Straight we worked whatever (over 240 days/year) and the company paid our taxes on our behalf to OZ (our take home wages never changed) and when they dont, they calculate OZ tax so that when paid, we stall walk with the same take home pay. (Im American) 

 

And because we were working in OZ, and because we were "paying tax" already to OZ, Americans got a tax credit in the US. 

 

Example: if you are working in Thailand and getting paid in Thailand and paying tax on that income in Thailand then even in Oz you get credits/deductions for the tax paid in Thailand. No country that I know of double taxes income. 

 

No matter what though you have to declare all your money, but what you end up paying in tax is gonna be lower if you already pay in another country. 

 

Thats what I'm asking in that another post:

 

If its money made in OZ you will be taxed differently than if its money made in another country and taxes paid on it to that other country. 

 

But anyway as far as OP goes he needs to do a ton of reading or spend a couple hundred dollars and hire an accountant to explain/do his taxes for him at least for a year or 2. 

Yes fully understand that

But in the OP's case he shouldn't have anything to worry about unless he has done something that would declare him a non resident, & being out of the country for more then 183 days doesn't automatically make you a Non Resident

 

As you mentioned the bit about tax credits/ ect, it may to well work for an Aussie as well or have a reverse affect

But it does state for sure (tax law ) that they will calculate your Medicare/child payment ect of your full world income from any source

 

As you mentioned he needs to seek professional advice

 

PS: I will be in the same situation as I have holidayed out of Auss since 1st July 2017 so that's 7 mths but i still have a residence I can immediately access so there still a resident 

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Nothing new here. If you're non res then the blanket rate applies to all income that is generated in Aus, for example rental income on a property in Aus that you kept after leaving the country for 2+ years thus becoming 'non res' for tax purposes.

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No change - same as it has been for years in Aus.

 

This will tell you if you are a non-resident for tax purposes. You have to take the test as if you are just about to leave. 

 

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=DORSLA&anchor=DORSLA/questions#DORSLA/questions

 

For tax residency there are several key factors:

  • Permanency of leaving 
  • Citizen/Born
  • Staying in the same place
  • Staying for more than 2 years

 

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I wrote an article about this very topic plus other financial considerations Australians should be aware of when deciding to move to Thialand here http://tonyinthailand.com/australians-moving-overseas-beware/ I would be interested to here of your thoughts.
Good article Tony, and good website - I'll read your blogs with interest. While not retired yet I'm already aware of the unfavourable implications of being a non resident when drawing an income in Aus (I'm currently non res). However, as a resident the implications in my case are also unfavourable as "worldwide income" is included as taxable income which means getting stung for tax on UK income (which isn't taxed in the UK as it's below my personal allowance level). Can't win either way!
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On 2/7/2018 at 11:42 AM, gk10002000 said:

What the heck?  I thought the USA had some interesting tax things, and things like how to qualify for tax exemption while living over seas.  Here it sound like Australia is doing the exact opposite.  32% seems pretty high, especially since for 6 months work one would probably not be making too much money and would be in a lower tax bracket.  But it says "earned income" so I assume Oz tax man wouldn't count investment income, dividends, interest etc.  So if one were retired outside of Oz, the 32% would not be an issue, but if one went out and back in and worked, wow.  32%

The  nominal  tax  on  "un earned "  income  is  usually  about that. Earned  income  varies  between  20  and  over 32  depending  on  income  level. Then add   GST  when  you come to  spend  what you  have  already  paid  tax  on !!unless   you are a  rich  basket  and  get  tax  breaks and/or lower  income tax  on  anything over and  above  what the  average  sucker  gets. The  Australian  Government is  demonstrating  it's  objection  to  anyone  who spends  $ outside  of  the  tax  net. After all you  can just  imagine  what a struggle  it is to  balance  out the  cost  of  housing  and  feeding  boat  people  etc and increasing  Parliamentary  salaries for  doing  such a  fine  job  without  doing  financial damage to  the  rich  who keep  you in place ! Now  that would    just  not be  fair  dinkum !

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On 2/8/2018 at 7:58 PM, UncleTouchyFingers said:

 

Well, is your earned income "Australian Earned Income"? 

 

 

They used to be very lax, but they changed the rules a few years ago. The USA we have to spend 330 days outside the USA to qualify for the exclusion, but Oz WAS 180 days. Now, nope. The UK is still 180 days I believe. 

 

So it used to be the USA was the worst but now its UK, USA, then Oz. 


And I believe when they enacted this law, they back-dated it a few years as well. I know a couple guys offshore that got mega-screwed by it. 

Technically I think the aged Pension is possibly subject to the tax not that they enforce it to my Knowledge

 

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It's a sign of the times. The US has now removed the Personal Exemption for any non-resident Green Card holders, for retirees in this category, this means their monthly social security (aka SSc Pension) is now taxable at 24.5% - expect the UK to follow suit by removing the personal exemption for non-residents.

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Just now, biggles45 said:

I seem to recall reading that in addition to these changes they scrapped the capital gains tax concession for tax non residents as well ? 

Indeed.

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On ‎6‎/‎02‎/‎2018 at 1:31 AM, Bikeman93 said:

https://www.ato.gov.au/Rates/Individual-income-tax-rates/

 

A foreign (non) resident is an Australian who spends half the year overseas. Then a flat tax of 32% applies on all Australian earned income.

Fur king hell, just when I'm about 4 months of moving to LOS they drop this on us

Good onya ATO thanks for nothin

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15 minutes ago, GTgrizzly said:

Fur king hell, just when I'm about 4 months of moving to LOS they drop this on us

Good onya ATO thanks for nothin

Don't blame the ATO, it has come from higher up the ladder, try Government House, Canberra.

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