Tax in Australia - foreign income that hasn't been taxed.

[MichelleRawai]

I've been living in Thailand for six years, and started working online (teaching English, Chinese company) mid 2018. The amount I earned in 2018 was less than what is taxable in Thailand. In 2019, my hours were more, and I planned on applying for tax ID to do my tax here for that year. Today I went for the tax ID, and the problem is - I wasn't getting paid into a Thai bank account. I've never bothered to open an account here because never had any income, I've just shared my husbands account. The guy at the revenue office (Chalong) said if I opened an account and got paid into it this year, I could do my tax next year (yes, even without a work permit.)

 

So last year my pay was going into my Aus savings account, and I was withdrawing what I needed for the month, thinking that's what I'd pay tax on, the money I brought into Thai. 

 

I haven't done an Aus tax return in a few years, as I considered myself non resident. (bank is the only tie there, and there's not much in it anyway.) I called the ATO to ask if I could just file a tax return and say I'm an Aus resident, gave her all my details and she said I'd be a non resident and I couldn't just decide to change my mind.  

 

Non residents aren't taxed on foreign earned income - but that's assuming tax is paid elsewhere (country of residence). Residents are taxed on world wide income, and receive tax free threshold. What I'm worried about, is being considered a non resident of Aus, but having to pay tax on foreign income, at a high rate, with no tax free threshold (about 32% for Aus income for example). I'm waiting to hear back from a few expat tax people, but in the meantime, does anyone have a clue, or heard of this situation before? Or can anyone recommend an expat tax accountant? Thank you!

[mfd101]

I have just had the inevitable but unpleasant experience of being declared Non-Resident for Tax Purposes by the ATO, after 4 years living in Thailand. Can't wriggle out of it, lose tax-free threshold and a few 'poor person' subsidies. Net effect: Extra $7000 to cough up, which I have just done. Sigh.

 

If only life in Thailand were as cheap as it used to be!

Edited February 11, 2020 by mfd101

[jany123]

34 minutes ago, MichelleRawai said:

What I'm worried about, is being considered a non resident of Aus, but having to pay tax on foreign income, at a high rate, with no tax free threshold (about 32% for Aus income for example)

To whom are you worried that you might have to pay tax too? As a non resident you don’t answer to the Australian taxman. Tell him nothing!

 

36 minutes ago, MichelleRawai said:

working online (teaching English, Chinese company)

Does the Chinese company report to Thai tax authorities? Your tax issues are between you and Thailand. Should you wish to make a Thai tax payment, you will need proof of earnings, I would think.

 

 

[MichelleRawai]

 

41 minutes ago, jany123 said:

 

Does the Chinese company report to Thai tax authorities? Your tax issues are between you and Thailand. Should you wish to make a Thai tax payment, you will need proof of earnings, I would think.

 

I was intending to print out Aus bank statements, with highlighted ATM withdrawals for accountant. My other idea was to get a yellow book and use that number to joint file online with my husband. As far as I know there is nothing on the tax form about bank details. Do they ever ask to see proof? 

 

44 minutes ago, jany123 said:

To whom are you worried that you might have to pay tax too? As a non resident you don’t answer to the Australian taxman. Tell him nothing!

As Aus and Thai have double tax treaty, Aus can find out whether I've paid tax here or not. I've heard about expats being audited when they return home. And unfortunately I was getting paid all year into my Aus savings account, so they might wonder about that.

[MichelleRawai]

1 hour ago, mfd101 said:

I have just had the inevitable but unpleasant experience of being declared Non-Resident for Tax Purposes by the ATO, after 4 years living in Thailand. Can't wriggle out of it, lose tax-free threshold and a few 'poor person' subsidies. Net effect: Extra $7000 to cough up, which I have just done. Sigh.

Oh yes that's what I'm afraid of!... What were you taxed on though? Aus income or foreign income? And what rate? Had you been filling out tax returns?

[mfd101]

48 minutes ago, MichelleRawai said:

Oh yes that's what I'm afraid of!... What were you taxed on though? Aus income or foreign income? And what rate? Had you been filling out tax returns?

My income is and always has been entirely Australian (super + investments) paid in Oz. So no escaping the ATO.

 

I have been doing Oz tax returns every year of my adult life, including the last 4 years from here in Thailand but the 1st 3 were as 'Resident for Tax Purposes'. And obviously I'm not about to revise those 3 returns!

[jany123]

1 hour ago, MichelleRawai said:

 

I was intending to print out Aus bank statements, with highlighted ATM withdrawals for accountant. My other idea was to get a yellow book and use that number to joint file online with my husband. As far as I know there is nothing on the tax form about bank details. Do they ever ask to see proof? 

 

As Aus and Thai have double tax treaty, Aus can find out whether I've paid tax here or not. I've heard about expats being audited when they return home. And unfortunately I was getting paid all year into my Aus savings account, so they might wonder about that.

I would be very cautious about telling the Thai authorities anything that might jeopardize your visa and would think that you would be better off upsetting the Aussie taxman over not paying tax in Thailand, than waving a flag here.

 

your contributions into your bank could be troublesome, although your only required to notify the Oz taxman of interest earned, not balance, so embarrassing questions might not arise on that front

 

as to proof... I’m not sure about here, but the Oz taxman would want more than bank statements in a return (because he doesn’t know how many banks etc your wage go into)

 

i would say tell thailand nothing and let Australia wonder, as with no info available from here, they have an uphill job proving anything., but then, I’m a person of dubious moral character

[Will27]

9 hours ago, mfd101 said:

I have just had the inevitable but unpleasant experience of being declared Non-Resident for Tax Purposes by the ATO, after 4 years living in Thailand. Can't wriggle out of it, lose tax-free threshold and a few 'poor person' subsidies. Net effect: Extra $7000 to cough up, which I have just done. Sigh.

 

If only life in Thailand were as cheap as it used to be!

Can I ask how the ATO suddenly advised you that you are a non-resident?

As our tax system is self assessment, it seems strange.

 

Unless you were audited of course and then they would've more than likely looked

at previous returns as well.

[mfd101]

It was my wunnerful tax accountant people who offered me up as a virtuous sacrifice. I didn't have any valid ground to object, unfortunately.

 

Sigh, that's the price of virtue. $7K isn't the end of the world (though I have stressed to my b/f that actually making some money from his fighting roosters might not be a bad idea!).

[Will27]

1 minute ago, mfd101 said:

It was my wunnerful tax accountant people who offered me up as a virtuous sacrifice. I didn't have any valid ground to object, unfortunately.

 

Sigh, that's the price of virtue. $7K isn't the end of the world (though I have stressed to my b/f that actually making some money from his fighting roosters might not be a bad idea!).

Ok, thanks for that.

But that's a bit different than being classed as a non-resident by the ATO.

 

Your accountant is probably correct though