To be an Aussie non-resident for Tax, or not?

[KhunHeineken]

21 minutes ago, Fat is a type of crazy said:

I thought I was being a bit pedantic to keep pointing  out the flaw in logic but it seems you still don't get it. As others said - over 183 in Australia - no worries - resident - under 183 but over 45 - see if you can pass factor tests. 

From one of many accounting firms alerting their clients. 

 

Now, do you see the part that says " spend more than 45 days but less than 183 days in an income year?"  That's because if you spend more than 183 days outside, you are a non resident because like you said, you are either inside Australia or outside Australia and for majority of expats, the magic number of days is 183 days.  

 

As I said to another member, I am posting in general, not about specific member's personal circumstances. 

 

Most Aussie expats in Thailand have not been back to Australia in several years.  They will be deemed as non residents for tax purposes under the proposed changes and proven by immigration records.  

 

https://hlb.com.au/tax-residency-changes-for-individuals/

 

Proposed tax residency rules

Therefore, the Government in the 2020-2021 Federal Budget announced that it will replace the current individual tax residency rules with new primary and secondary tests to determine one’s tax residency.

The primarily test is the 183-day test, that is, if a person who is physically present in Australia for a period of 183 days or more in any income year, this person will be considered as a resident for Australian tax purposes.

The secondary test is a ‘Factor Test’ which applies to individuals who spend more than 45 days but less than 183 days in an income year. The secondary tests focus on four factors, two of which must be satisfied by that person to be deemed as resident for tax purposes. Factors include:

• The Right to reside permanently in Australia (e.g. citizenship or permanent residency);
• The ability to access accommodation in Australia (e.g. rights of ownership, leasehold interest, licenses);
• Whether the individual’s family (spouse or any of their children under 18) are generally located in Australia;
• The individual’s Australian economic connections (employment, carry on business, interests in Australia).
•  

[Pattaya57]

3 minutes ago, KhunHeineken said:

I have said I see YOUR point.  As in YOUR personal circumstances.

 

I have also said, how many expats are in similar circumstances to YOU? 

 

I am postng "in general" not about YOUR personal circumstances. 

 

Your typical Aussie expat hasn't been back to Australia for several years.  Tell me how YOUR circumstance also apply to them?

 

So funny that someone seems to think everyone has the same personal circumstance as yourself in regards to the proposed changes to tax residency.  

It's not my personal circumstances. You continually say everyone outside of Australia more than 183 days would be automatically a non-resident. That is not what the proposed rules say as I explained.

 

For anyone that has been out of Australia for more than 3 years, if the proposed rules are made law they would need to go to Australia for a 45 day holiday. Then they can continue to be a Resident for tax if they meet two of the factor tests (one is already met if Aussie citizen or permanent resident, other could be as simple as having family or investments still in Aus)

 

[KhunHeineken]

6 minutes ago, Pattaya57 said:

It's not my personal circumstances. You continually say everyone outside of Australia more than 183 days would be automatically a non-resident. That is not what the proposed rules say as I explained.

 

For anyone that has been out of Australia for more than 3 years, if the proposed rules are made law they would need to go to Australia for a 45 day holiday. Then they can continue to be a Resident for tax if they meet two of the factor tests (one is already met if Aussie citizen or permanent resident, other could be as simple as having family or investments still in Aus)

 

You finally got it.  The penny dropped. 

 

So, as I was saying, how many Aussie expats could reestablish residency? 

 

How many can meet two of the four factor tests?  One is very easy to meet, basically, have an Aussie passport. 

 

How many could meet one more out of the four?   Eg. property ownership, Lease, business interests etc. 

 

How many Aussie expats can afford the flights?

 

How many could afford to live in Australia for 45 days? 

 

I know I can.  You have said you can also.  What's your advice for those who can't meet two of the four factor tests, or can't afford to go back to Australia and live there for 45 days? 

[Pattaya57]

Just now, KhunHeineken said:

You finally got it.  The penny dropped. 

Hilarious, you are in your own little World ignoring all the people pointing out your misunderstanding of the proposed rules you love so much (that may never be implemented).

[KhunHeineken]

14 minutes ago, Ralf001 said:

decent wedge sitting idle in a bank account !

Liquidating all assets in Australia and putting it into cash at bank, then officially declaring themselves a non resident for tax purposes may be financially beneficial for some. 

 

Of course, then there's the Thai tax/s to deal with, but that's running in another forum.  Under the current DTA, you would get a 10% tax credit towards any tax liability owed in Thailand. 

[Fat is a type of crazy]

15 minutes ago, KhunHeineken said:

From one of many accounting firms alerting their clients. 

 

Now, do you see the part that says " spend more than 45 days but less than 183 days in an income year?"  That's because if you spend more than 183 days outside, you are a non resident because like you said, you are either inside Australia or outside Australia and for majority of expats, the magic number of days is 183 days.  

 

As I said to another member, I am posting in general, not about specific member's personal circumstances. 

 

Most Aussie expats in Thailand have not been back to Australia in several years.  They will be deemed as non residents for tax purposes under the proposed changes and proven by immigration records.  

 

https://hlb.com.au/tax-residency-changes-for-individuals/

 

Proposed tax residency rules

Therefore, the Government in the 2020-2021 Federal Budget announced that it will replace the current individual tax residency rules with new primary and secondary tests to determine one’s tax residency.

The primarily test is the 183-day test, that is, if a person who is physically present in Australia for a period of 183 days or more in any income year, this person will be considered as a resident for Australian tax purposes.

The secondary test is a ‘Factor Test’ which applies to individuals who spend more than 45 days but less than 183 days in an income year. The secondary tests focus on four factors, two of which must be satisfied by that person to be deemed as resident for tax purposes. Factors include:

• The Right to reside permanently in Australia (e.g. citizenship or permanent residency);
• The ability to access accommodation in Australia (e.g. rights of ownership, leasehold interest, licenses);
• Whether the individual’s family (spouse or any of their children under 18) are generally located in Australia;
• The individual’s Australian economic connections (employment, carry on business, interests in Australia).
•  

Saying over 183 days outside Australia means you are a non-resident is false. It is your written words that were incorrect. If you wish to qualify it -  each time you make the statement - by saying my opinion is that  many expats in Thailand will not pass the factor tests and will not be in Australia over 183 days and this will mean they are nonresident then go for it. 

[KhunHeineken]

3 minutes ago, Pattaya57 said:

Hilarious, you are in your own little World ignoring all the people pointing out your misunderstanding of the proposed rules you love so much (that may never be implemented).

You never gave any advice to Aussie expats who have been living in Thailand for several years and have not returned to Australia?

 

They want to hear your genius idea for them on how they can remain residents of Australia for tax purposes under the proposed changes when they haven't been back in years, and have no intention of doing so. 

[KhunHeineken]

3 minutes ago, Fat is a type of crazy said:

Saying over 183 days outside Australia means you are a non-resident is false. It is your written words that were incorrect. If you wish to qualify it -  each time you make the statement - by saying my opinion is that  many expats in Thailand will not pass the factor tests and will not be in Australia over 183 days and this will mean they are nonresident then go for it. 

The 183 days is the "primary test" also called the "bright line test." 

 

I can post the information for you, but I can't understand it for you. 

[Nemises]

16 hours ago, KhunHeineken said:

https://www.afr.com/policy/tax-and-super/assistant-treasurer-flags-new-tax-residency-rules-20220826-p5bd1v

 

"Assistant Treasurer Stephen Jones told an Australian Chamber of Commerce event in Singapore this week the new rules for deciding Australian tax residency were in “the government’s in-tray” ahead of the October budget, and the day limit was “being looked at”.

 

Read the article.  It's obvious they are considering raising the day limit, not lowering it. 

 

1/  Cannot read the full article because it is behind a pay wall.

 

2/ The little that is readable says words to the effect of "Albanese Government hints at changing tax regime for non-residents"

 

3/ The article was written 2 full years ago!!!

 

4/ The next Federal Election will (most likely) be next year and there's no certainty that the Albanese Government will be re-elected 

 

 

 

[KhunHeineken]

On 7/6/2024 at 8:19 PM, Nemises said:

1/  Cannot read the full article because it is behind a pay wall.

It's easy to get around most pay walls, but I can't post about it here. 

 

On 7/6/2024 at 8:19 PM, Nemises said:

2/ The little that is readable says words to the effect of "Albanese Government hints at changing tax regime for non-residents"

Yes, and it also says this:

 

"Assistant Treasurer Stephen Jones told an Australian Chamber of Commerce event in Singapore this week the new rules for deciding Australian tax residency were in “the government’s in-tray” ahead of the October budget, and the day limit was “being looked at”.

 

Big difference from all of those members who though "Labor and Albo" would never pass the changes. 

 

The tweaking of the day limit has been explained previously.  Basically, an expat worker may wish to be a non resident.  They may get 6 weeks leave a year. (45 days) They return to Australia for their leave.  They stay under 45 days in Australia.  A family member is sick or injured or dies or gives birth or gets married etc and they return home.  They go over the 45 days to attend this "event" and may then be deemed a resident for tax purposes.

 

Working expats called on Labor to increase the 45 days.  It may go to 60 days, but probably 90 days in line with other countries.

 

That's not good for some retirees here who would have liked to return to Australia for 46 days and can meet two of the four factor tests.  It means they will have to return to Australia for 60 or maybe 90 days to achieve resident for taxation purposes status in order to escape the non resident tax brackets.  

 

On 7/6/2024 at 8:19 PM, Nemises said:

3/ The article was written 2 full years ago!!!

Yes, it was.  

 

Does that mean the proposed changes have gone away?  (see above quote from the article)

 

Do you have a link to show Labor has scrapped them?  

 

On 7/6/2024 at 8:19 PM, Nemises said:

4/ The next Federal Election will (most likely) be next year and there's no certainty that the Albanese Government will be re-elected 

Sure.

 

However, Liberal proposed them, Labor didn't bin them, so either way, either party will eventually legislate them.     

[Nemises]

2 hours ago, KhunHeineken said:

“the government’s in-tray” ahead of the October budget

They (the proposed changes) were in the in-tray for the October 2022  budget…and it’s gone no further since!
 

Therefore I’m prepared to say that the proposed changes will not be implemented before the next Federal Election. Do you agree, yes or no?

 

 

 

 

 

[Pattaya57]

22 minutes ago, Nemises said:

They were in the in-tray for the October 2022  budget…and it’s gone no further since! Therefore I’m prepared to say that the proposed changes will not be implemented before the next Federal Election. Do you agree, yes or no?

The guy just doesn't get it. Has he ever made a post where he didn't mention these stalled proposed regs?

 

Anyway, for the proposed new tax regs to come in they'll be at the start of a new tax year. Given that the next federal election would be sometime between July and September 2025 I'd say the earliest tax change would be 1 July 2026 so a non-issue for now (if ever as that will be a whole government term they didn't implement them)

 

[KhunHeineken]

1 hour ago, Nemises said:

They (the proposed changes) were in the in-tray for the October 2022  budget…and it’s gone no further since!

Wrong. 

 

The consultation phase was between 21 July 2023 to 22 September 2023. 

 

https://treasury.gov.au/consultation/c2023-205344

 

Here's the consultation paper.

 

https://treasury.gov.au/sites/default/files/2023-07/c2023-205344-cp.pdf

 

So much for "Labor and Albo" scrapping them. 

 

1 hour ago, Nemises said:

Therefore I’m prepared to say that the proposed changes will not be implemented before the next Federal Election. Do you agree, yes or no?

I have no idea when they will be implemented, but will go on the record and say it's when and not if. 

 

In my opinion, they WILL be passed into legislation. 

 

I believe the next federal election must be held on or before the 27 September 2025.  

 

In my opinion, the amount of days per year one is either inside or outside Australia will be calculated per financial year, not calendar year like Thailand.  On that basis, I would say key dates would be the May budget for a 1 July 2025 start.

 

Even if the proposed changes are not mentioned in the May budget, they could still pass through parliament for a 1 July 2025 start. 

 

Should they not start on the 1 July 2025, then I agree with you, they will not start before the next federal election, and the next possible start date would be 1 July 2026.  

[KhunHeineken]

1 hour ago, Pattaya57 said:

The guy just doesn't get it. Has he ever made a post where he didn't mention these stalled proposed regs?

"Stalled" really? 

 

The consultation phase only finished in September 2023.  

 

1 hour ago, Pattaya57 said:

Anyway, for the proposed new tax regs to come in they'll be at the start of a new tax year.

I agree.

 

1 hour ago, Pattaya57 said:

Given that the next federal election would be sometime between July and September 2025 I'd say the earliest tax change would be 1 July 2026 so a non-issue for now (if ever as that will be a whole government term they didn't implement them)

Why do you say there is no possibility of a 1 July 2025 start? 

[Pattaya57]

Just had a thought for the over 60's. The only way to declare yourself a non-resident for tax purposes is by declaring so in your tax return.

 

However if you have  < $18,200 per year taxable income you are not required to submit a tax return (noting Super pensions are tax free for over 60, so not part of the $18,200)

 

Same as if you're on the aged pension, with the Seniors and Pensioners Tax Offset (SAPTO), you are not required to submit a tax return if taxable income is < $32,279 for a single (or $28,974 each for a couple).

 

Unless I'm missing something, it seems like a nice loophole to never be questioned as to tax residence as if you don't have to submit a tax return you can't declare yourself a non-resident 😀

 

[KhunHeineken]

4 hours ago, Pattaya57 said:

Unless I'm missing something, it seems like a nice loophole to never be questioned as to tax residence as if you don't have to submit a tax return you can't declare yourself a non-resident 

Except for the part about the Immigration Department knowing you've been outside Australia for 183 days, and being a government department, they alert other government departments to this fact, like the ATO and Centerlink.  

 

Once again, you, and many others, would like to think your pension will be treated the same, in regards to taxation, as if you were living in Australia, even though you are living in Thailand. 

 

There are resident tax brackets and non resident tax brackets.  I have posted them both, on more than one occasion. 

 

You want the resident tax brackets, with its tax free threshold, whilst living in Thailand, and being a non resident for taxation purposes.  How do you think you can pull that off, after the proposed changes have been passed????

 

As I have said before, the payer (Centerlink) is also the taxer (ATO) backed up by records fro Immigration, because they are all Australian government departments.  How are you going to get around this? 

[Nemises]

3 hours ago, KhunHeineken said:

Except for the part about the Immigration Department knowing you've been outside Australia for 183 days

It maybe 183 days …or it maybe 45 days every 3 years (needed to be in Aus to be considered a resident for tax purposes). 

 

3 hours ago, KhunHeineken said:

How are you going to get around this? 

If 183 days?  Then yes, big problem for many.

If 45 days every 3 years?  Not as big as a problem for many. 
 

[Pattaya57]

My Mate just changed to non-resident for tax purposes after 2 years living in Thailand. He basically decided there's no way he could justify saying he's a resident going forward (married to thai, child in thai school, owns a condo and just bought a house) so he declared it in this years tax return. This makes sense for him as it was stressing him out and he's happy to pay the 10% withholding tax on interest (he's also only 57 so a long time to fly under the radar)

He worked out the best time to transition based on his shares value for each month and chose January 1st when his shares were the lowest (so less capital gains to pay tax on). This means his Aus shares are considered sold on that date and is now free to sell those shares as he likes with no further tax implications.

The only difficult part was he had to spend 40 minutes on the phone with Westpac to change to a non-resident with an overseas address to get them to withhold the 10% tax on interest. As for having to provide  a Tax Identification Number (TIN) they accepted his answer that he didn't have a Thai TIN as he earned no income in Thailand so he didn't need to file a tax return.

For me, I've decided to stay "on holiday" for a year remaining as a Resident for Tax, while next year I'm likely to extend that "holiday". Hopefully the new proposed tax laws are in place by then and I can use my 45 days spent in Aus during the 2024 tax year to maintain resident status for 2025 & 2026 tax years (then go back to Aus for 45 days holiday in 2027 to keep me good until 2030)

 

[Will27]

6 hours ago, KhunHeineken said:

Except for the part about the Immigration Department knowing you've been outside Australia for 183 days, and being a government department, they alert other government departments to this fact, like the ATO and Centerlink.  

 

Once again, you, and many others, would like to think your pension will be treated the same, in regards to taxation, as if you were living in Australia, even though you are living in Thailand. 

 

There are resident tax brackets and non resident tax brackets.  I have posted them both, on more than one occasion. 

 

You want the resident tax brackets, with its tax free threshold, whilst living in Thailand, and being a non resident for taxation purposes.  How do you think you can pull that off, after the proposed changes have been passed????

 

As I have said before, the payer (Centerlink) is also the taxer (ATO) backed up by records fro Immigration, because they are all Australian government departments.  How are you going to get around this? 

Still Scaremongering I see.

 

Immigration do not advise the ATO every time someone enters and leaves the country.

 

Of course, if the ATO wants to check on a particular individual they can.

 

But to say that Immigration advises the ATO of everyone who comes and goes is just incorrect.

 

Yes, people on benefits are linked to Immigration.

[Nemises]

1 hour ago, Will27 said:

Yes, people on benefits are linked to Immigration.

Just found out yesterday that if you receive a benefit you are supposed to tell Centrelink if you intend to leave the country, regardless of duration. So immediately went onto the Centrelink app, and yep, they have a section where you enter in your impending overseas details. Wondering if better to pretend I never saw this and let immigration tell them instead...

 

 

[rhodie]

7 minutes ago, Nemises said:

Just found out yesterday that if you receive a benefit you are supposed to tell Centrelink if you intend to leave the country, regardless of duration. So immediately went onto the Centrelink app, and yep, they have a section where you enter in your impending overseas details. Wondering if better to pretend I never saw this and let immigration tell them instead...

 

 

It would seem that Centrelink get notified whenever you leave or enter the country, so even though you are supposed to notify them, it doesn't matter. I have friends receiving the pension that have never notified their movements, but their pensions are adjusted automatically when they come and go from Australia.

[Nemises]

1 minute ago, rhodie said:

It would seem that Centrelink get notified whenever you leave or enter the country, so even though you are supposed to notify them, it doesn't matter. I have friends receiving the pension that have never notified their movements, but their pensions are adjusted automatically when they come and go from Australia.

Thanks mate, I think I will do the same as them. Also, can you or they confirm how many pension supplement payments they receive when returning back to Aus and leaving again soon after? Someone once told me the answer is 6, but not sure if that's 6 payments or 6 weeks:  3 (fortnightly) payments...

[rhodie]

3 minutes ago, Nemises said:

Thanks mate, I think I will do the same as them. Also, can you or they confirm how many pension supplement payments they receive when returning back to Aus and leaving again soon after? Someone once told me the answer is 6, but not sure if that's 6 payments or 6 weeks:  3 (fortnightly) payments...

You continue getting the supplements for 6 weeks after you leave. (3 fortnightly payments)

[Nemises]

1 minute ago, rhodie said:

You continue getting the supplements for 6 weeks after you leave. (3 fortnightly payments)

Perfect! Pays for the airfare.

[Pattaya57]

So I thought I'd keep under the radar and not tell any of my banks that I'm in Thailand (no risk as I don't use my Aus debit cards)

 

So much for that as I opened my NAB app today to this. So they obviously know where we are and how long we stay here 😆 

 

[Nemises]

1 hour ago, Pattaya57 said:

So I thought I'd keep under the radar and not tell any of my banks that I'm in Thailand (no risk as I don't use my Aus debit cards)

 

So much for that as I opened my NAB app today to this. So they obviously know where we are and how long we stay here 😆 

 

 

Try using their website (not their app) on your laptop/PC (not on your phone) with a VPN. 
You’re now back under the radar!

[norbra]

On 8/18/2024 at 8:17 AM, rhodie said:

It would seem that Centrelink get notified whenever you leave or enter the country, so even though you are supposed to notify them, it doesn't matter. I have friends receiving the pension that have never notified their movements, but their pensions are adjusted automatically when they come and go from Australia.

My last 2 visits to AUS,I did not inform CLink about my presence,they did not reinstate pension extras.

[Pattaya57]

On 8/18/2024 at 8:17 AM, rhodie said:

It would seem that Centrelink get notified whenever you leave or enter the country, so even though you are supposed to notify them, it doesn't matter. 

 

Not Centrelink, but I get a fortnightly DVA payment that is supposed to only be paid when actually located in Australia. I'm in my 5th month out this year and I'm still being paid. Seems immigration has better things to do then advise all government departments of old retired guys whereabouts 😉

 

[rhodie]

27 minutes ago, Pattaya57 said:

 

Not Centrelink, but I get a fortnightly DVA payment that is supposed to only be paid when actually located in Australia. I'm in my 5th month out this year and I'm still being paid. Seems immigration has better things to do then advise all government departments of old retired guys whereabouts 😉

 

"If you are absent from Australia long-term or permanently, your DVA payments may be made every four weeks into your bank account in your country of residence."

 

https://www.dva.gov.au/get-support/financial-support/income-support/what-changes-your-payments/your-property-or-accommodation/travelling-or-living-overseas#:~:text=If you are absent from Australia long-term or permanently,in your country of residence.

[KhunHeineken]

On 8/17/2024 at 8:30 PM, Nemises said:

It maybe 183 days …or it maybe 45 days every 3 years (needed to be in Aus to be considered a resident for tax purposes). 

As I have said on numerous occasions, your typical Aussie expat retiree has not been back to Australia for several years.  I would put this demographic in the majority.  Would you agree? 

 

Many return back to Australia for a few weeks, perhaps for a major family even like a wedding, birth, funeral etc, but how many do you know return home for 6 week (45 days) every year, or even within the last 3 years? 

 

On 8/17/2024 at 8:30 PM, Nemises said:

If 183 days?  Then yes, big problem for many.

Yes, so do you have any advice for them? 

 

How can they remain a tax resident of Australia, to avail themselves of the resident tax brackets, particularly the tax free threshold? 

 

The current 90 year old laws will be superseded eventually, as they are no longer fit for purpose.  They will be replaced by a physical presence and time based model, similar to many other countries, including Thailand, for that matter.  Immigration records will know what Aussies are outside of Australia, and for how long.  The pension is an income.  The pension is taxable.  Centerlink, a government department, pays it, therefore can withhold some of it, in a similar way they do the supplements after being outside of Australia for 6 weeks. 

 

How could an expat pensioner, who hasn't been back to Australia in several years, claim they are still a resident of Australia for tax purposes, thus still receive their tax free pension, whilst living in Thailand full time? 

 

On 8/17/2024 at 8:30 PM, Nemises said:

If 45 days every 3 years?  Not as big as a problem for many. 

I agree, but as I pointed out, the consultation stage saw expat associations etc lobby the government to make it more than 45 days, possibly 60, but most likely 90 days similar to other countries. 

 

How many expats could do 3 months in Australia every 3 years?