Australian taxation and it's effect on Australians living in Thailand.

[Will27]

Will27:

"I would be interested to know what the "new rules" are that you're referring to.

I didn't think the rules of residency for tax purposes had changed."

Another indication of the change is the alteration on the e-tax forms. In 2014, there is a section that requires you to note when you left and entered Australia. I may wrong, but I have no recollection of this question being in any of the e-tax forms in 2013 or preceding years.

I don't recall seeing that.

I've just checked my etax form for 2014 and I still can't see it

[Thai Chi]

^^^^ probably only shows up if you click / select "non resident" first.

Edited August 14, 2014 by Thai Chi

[Will27]

^^^^ probably only shows up if you click / select "non resident" first.

Tried that on a dummy run and still didn't see it.

[Thai Chi]

Correct.

After I posted I also tried to see if it would appear.

[Bluetongue]

There ar equite a few taxation rulings where expat or permananet departure comsuper recipients have tried to argue that they should not be paying any tax in Australia. These have always been knocked back and always classified the pensioner as a non resident. I am not clear if the non resident status was self declared in order for the pensioner to try an establish that they shoudl not pay tax at all but fo rthe most part it seems that they did not meet the broader residence requirements. Either way it has been noted as a "fact" in the decision that the recipients were non residents.

For me this is a keep quiet and say nothing issue.....and I still have a residence in Oz so better off than most,

http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~annuities~basic~exact&target=J%20JA&style=html&sdocid=AID/AID2004298/00001&recStart=81&PiT=99991231235958&recnum=96&tot=1081&pn=ALL:::ALL

and

http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~annuities~basic~exact&target=JA&style=html&sdocid=AID/AID2004126/00001&recStart=81&PiT=99991231235958&recnum=100&tot=1081&pn=ALL:::ALL

Thanks for this but neither of these decisions are relevant

really, the taxpayers concerned were not contesting residency just the

ability of the ATO to collect tax on a pension, both were admitting they were residing in another country

[mamborobert]

There ar equite a few taxation rulings where expat or permananet departure comsuper recipients have tried to argue that they should not be paying any tax in Australia. These have always been knocked back and always classified the pensioner as a non resident. I am not clear if the non resident status was self declared in order for the pensioner to try an establish that they shoudl not pay tax at all but fo rthe most part it seems that they did not meet the broader residence requirements. Either way it has been noted as a "fact" in the decision that the recipients were non residents.

For me this is a keep quiet and say nothing issue.....and I still have a residence in Oz so better off than most,

http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~annuities~basic~exact&target=J%20JA&style=html&sdocid=AID/AID2004298/00001&recStart=81&PiT=99991231235958&recnum=96&tot=1081&pn=ALL:::ALL

and

http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~annuities~basic~exact&target=JA&style=html&sdocid=AID/AID2004126/00001&recStart=81&PiT=99991231235958&recnum=100&tot=1081&pn=ALL:::ALL

Thanks for this but neither of these decisions are relevant

really, the taxpayers concerned were not contesting residency just the

ability of the ATO to collect tax on a pension, both were admitting they were residing in another country

Apologies I may not have explained myself to well.

Putting aside the desire not to pay tax in these cases what was interesting to me is that the ATO stated as a "fact" in determining the matter that the pension recipients were non residents for taxation purposes.

Their desire to establish this aside it would seem if you do not meet any of the usual requirements to be considered a non resident for tax purposes and merely rely on the fact that you are in receipt of a commonwealth pension it could reasonably inferred from the rulings (and these are just two of oodles) that the ATO consider you to be a non resident for tax purposes which seems at odds with the verbal reference from ATO cited earlier in this thread.

Either way I would not want to be seeking any clarification from the ATO.

[CBR250]

Will27:

"I would be interested to know what the "new rules" are that you're referring to.

I didn't think the rules of residency for tax purposes had changed."

Another indication of the change is the alteration on the e-tax forms. In 2014, there is a section that requires you to note when you left and entered Australia. I may wrong, but I have no recollection of this question being in any of the e-tax forms in 2013 or preceding years.

I don't recall seeing that.

I've just checked my etax form for 2014 and I still can't see it

Sorry, it isn’t the personal e-tax form you can download from the ATO website.

I was using an online accountant service (http://www.etax.com.au/contact-us/ ) that oversees the completion of the form that they then submit - and they offer online assistance. I needed this because of a number of Capital Gain Events during the year that needed losses carried forward to future years. Too messy for my limited knowledge.

I thought it was the same form as the ATO, but it isn't (I've also checked - there is no requirement on the downloaded e-tax form from ATO regarding days lived in Australia). I stopped filling in the form with etax.com.au when I got the questions asking about my dates of entry and exit.

I would be curious to know if this information is expected from all tax agents / online services, or if I have hit a bad one.

[CBR250]

Will27 said:

"As far as citizenship is concerned, you do get benefits not afforded to

non-residents but different rules for taxation isn't one of them nor

should it be, IMO."

This isn't too clear - it seems to read that you agree Australian citizens should pay the same tax as a non-resident if they spend more than 6 months a year travelling overseas??

That is, these travelling citizens should pay more tax on their income than Australian citizens who stay at home in Australia?

I can't see any justification for this. I would be interested to know the logic behind your opinion.

[Will27]

Will27 said:

"As far as citizenship is concerned, you do get benefits not afforded to

non-residents but different rules for taxation isn't one of them nor

should it be, IMO."

This isn't too clear - it seems to read that you agree Australian citizens should pay the same tax as a non-resident if they spend more than 6 months a year travelling overseas??

That is, these travelling citizens should pay more tax on their income than Australian citizens who stay at home in Australia?

I can't see any justification for this. I would be interested to know the logic behind your opinion.

I just don't see how you can come to that conclusion.

Try not to put words onto my mouth.

I was talking about resident and non-resident tax rates.

You said "Being an Australian citizen should mean something. I don't want people with no emotional

investment in or connections to Australia to have the same benefits I do. Same as Thais not allowing

us to buy their land - I think this is sensible".

I have said that you do get benefits for having Australian citizenship, but tax benefits isn't one of them.

Citizenship has no relevance to taxation rates.

[CBR250]

Will27 said:

"As far as citizenship is concerned, you do get benefits not afforded to

non-residents but different rules for taxation isn't one of them nor

should it be, IMO."

This isn't too clear - it seems to read that you agree Australian citizens should pay the same tax as a non-resident if they spend more than 6 months a year travelling overseas??

That is, these travelling citizens should pay more tax on their income than Australian citizens who stay at home in Australia?

I can't see any justification for this. I would be interested to know the logic behind your opinion.

I just don't see how you can come to that conclusion.

Try not to put words onto my mouth.

I was talking about resident and non-resident tax rates.

You said "Being an Australian citizen should mean something. I don't want people with no emotional

investment in or connections to Australia to have the same benefits I do. Same as Thais not allowing

us to buy their land - I think this is sensible".

I have said that you do get benefits for having Australian citizenship, but tax benefits isn't one of them.

Citizenship has no relevance to taxation rates.

Are you working at being obtuse here or does it come naturally? I wasn't putting words into your mouth - if you look again you will see I was asking questions to try to disentangle your conflation of citizenship and non-residency with tax. Given your attitude toward this conversation I suspect I don't really want to know your views anyway, so just forget it pal.

[Will27]

Will27 said:

"As far as citizenship is concerned, you do get benefits not afforded to

non-residents but different rules for taxation isn't one of them nor

should it be, IMO."

This isn't too clear - it seems to read that you agree Australian citizens should pay the same tax as a non-resident if they spend more than 6 months a year travelling overseas??

That is, these travelling citizens should pay more tax on their income than Australian citizens who stay at home in Australia?

I can't see any justification for this. I would be interested to know the logic behind your opinion.

I just don't see how you can come to that conclusion.

Try not to put words onto my mouth.

I was talking about resident and non-resident tax rates.

You said "Being an Australian citizen should mean something. I don't want people with no emotional

investment in or connections to Australia to have the same benefits I do. Same as Thais not allowing

us to buy their land - I think this is sensible".

I have said that you do get benefits for having Australian citizenship, but tax benefits isn't one of them.

Citizenship has no relevance to taxation rates.

Are you working at being obtuse here or does it come naturally? I wasn't putting words into your mouth - if you look again you will see I was asking questions to try to disentangle your conflation of citizenship and non-residency with tax. Given your attitude toward this conversation I suspect I don't really want to know your views anyway, so just forget it pal.

Here's a pointer, if you don't want an answer, don't ask the question.

If my statement about citizens not getting taxation benefits wasn't that

clear for you, you could've asked for clarification rather putting your own

spin on it.

You raised your Australian citizenship which has nothing to do with this topic.

I said that citizenship has nothing to do with tax rates and from this, you have somehow

gleaned that I mean "Australian citizens should pay the same tax as a non-resident if they

spend more than 6 months a year travelling overseas".

How you came to that conclusion I have no idea.

I think you're confused (again) about citizenship and taxation rates for residents and non-residents.

BTW, I have forgotten it

Edited August 17, 2014 by Will27

[CBR250]

For anyone finding this thread and seeking some useful information - check the URL:

http://planet-boomer.squarespace.com/aus/personal-finance/

The site offers some very helpful suggestions and cautions re areas of personal finance including:

- Heath Insurance

- Tax (V. useful information re Residency-non-Residency for ATO purposes - clarified my options well).

- Pensions.

The authors - Stephen Wyatt & Colleen Ryan - are ex-tax accountants, as well being inveterate travellers. Perfect qualifications for assisting international grey nomads. If you want to explore the cautions and advice a bit further than what is on the website, this wonderful couple have recently published a book: "Sell Up, Pack Up and Take Off".

PS The big change to tax for "non-residents" was introduced by Wayne Swan in the 2012 Budget. This probably explains why there have been a flurry of ATO alterations in the past year or so, as naturally the ATO seeks to grab as much as possible by interpreting rules/laws in a manner that best gets their paws into your pocket. However, as someone living on investments, I am totally onside with the late, lamented Kerry Packer, who once said: "if anybody in this country doesn't minimize their tax they want their heads read".

[Old Croc]

Thanks for that link CBR, good interesting stuff.

However, having once crossed paths with Kerry Packer I can tell you I don't lament for him.

[CBR250]

Thanks for that link CBR, good interesting stuff.

However, having once crossed paths with Kerry Packer I can tell you I don't lament for him.

Yes, I wouldn't want to be on the other team from him.

I guess the lamented aspect - for me - is the loss of the larger-than-life characters such as Kerry or even his old man, Frank - who seem so rare these days.

Another Packerism I enjoyed, after his famous heart attack that led to him equipping every Ambulance in NSW with defribillators (referred to by Ambulance staff even today as "Packer Whackers"). Anyway, the quote is:

"I’ve been to the other side, and let me tell you, son, there’s f*--ing nothing there".

Edited August 19, 2014 by CBR250

[Old Croc]

Thanks for that link CBR, good interesting stuff.

However, having once crossed paths with Kerry Packer I can tell you I don't lament for him.

Yes, I wouldn't want to be on the other team from him.

I guess the lamented aspect - for me - is the loss of the larger-than-life characters such as Kerry or even his old man, Frank - who seem so rare these days.

Another Packerism I enjoyed, after his famous heart attack that led to him equipping every Ambulance in NSW with defribillators (referred to by Ambulance staff even today as "Packer Whackers"). Anyway, the quote is:

"Ive been to the other side, and let me tell you, son, theres f*--ing nothing there".

I only crossed paths with the man, not swords. I don't think he really noticed me, it was his sheer arrogance that rankled.

A character for sure, and I loved what he did for world cricket, but a typical billionaire, a different species.

[Berek]

For anyone finding this thread and seeking some useful information - check the URL:

http://planet-boomer.squarespace.com/aus/personal-finance/

After reading that site, I can see my Thai retirement slipping further away..

I'm guessing a lot of people think that they can just pop back to oz if they get sick and everything will be ok. Umm not by the looks of it unless you can afford to keep an empty house etc as proof of residence.

[CBR250]

For anyone finding this thread and seeking some useful information - check the URL:

http://planet-boomer.squarespace.com/aus/personal-finance/

After reading that site, I can see my Thai retirement slipping further away..

I'm guessing a lot of people think that they can just pop back to oz if they get sick and everything will be ok. Umm not by the looks of it unless you can afford to keep an empty house etc as proof of residence.

I don't think you really need to keep an empty house - but you sure need a lot of other bumph to show you still have sufficiently strong ties and a presence in Australia to be seen as "resident".

And each government department makes up its own rules (although all rules seem to disadvantage expats). Federal Department of Health, from what I understand, denies you access to Medicare if you have lived abroad for 5 years. I am not sure how they work that out - and if it applies to those who are classified as resident (for-tax-purposes), but who have spent more than 6 months of each year abroad. Who knows? So little clarity. And most of us don't really want to be the first one into the water to question government departments about their interpretations.

[Will27]

For anyone finding this thread and seeking some useful information - check the URL:

http://planet-boomer.squarespace.com/aus/personal-finance/

After reading that site, I can see my Thai retirement slipping further away..

I'm guessing a lot of people think that they can just pop back to oz if they get sick and everything will be ok. Umm not by the looks of it unless you can afford to keep an empty house etc as proof of residence.

I don't think you really need to keep an empty house - but you sure need a lot of other bumph to show you still have sufficiently strong ties and a presence in Australia to be seen as "resident".

And each government department makes up its own rules (although all rules seem to disadvantage expats). Federal Department of Health, from what I understand, denies you access to Medicare if you have lived abroad for 5 years. I am not sure how they work that out - and if it applies to those who are classified as resident (for-tax-purposes), but who have spent more than 6 months of each year abroad. Who knows? So little clarity. And most of us don't really want to be the first one into the water to question government departments about their interpretations.

Yep

There seems to be different rules for residency from different departments such as Centrelink, ATO, Medicare etc.

I still think the vast majority of us living here would be screwed if we got targeted by the ATO.

Let's hope that's not the case.

[Berek]

And god help us if the LNP stay in office... Super is next on the hit list.

[CBR250]

And god help us if the LNP stay in office... Super is next on the hit list.

I would love a clear picture of where Super will go over the next few years. It is a huge amount of money, and they don't want to spook the payers, but of course must lie awake at night figuring out ways to get their scheming mitts into it.

So, what makes you think super is next? Gut reaction, media, or inside info? And what changes do you believe may occur - or have been forecast by pundits as likely?

[simple1]

And god help us if the LNP stay in office... Super is next on the hit list.

I would love a clear picture of where Super will go over the next few years. It is a huge amount of money, and they don't want to spook the payers, but of course must lie awake at night figuring out ways to get their scheming mitts into it.

So, what makes you think super is next? Gut reaction, media, or inside info? And what changes do you believe may occur - or have been forecast by pundits as likely?

have a read of the article below

http://www.superguide.com.au/superannuation-topics/liberal-party

Edited August 22, 2014 by simple1

[jacksam]

CBR250. Have you thought of an appropriate super fund. Im sure a good financial advisor can set someting up where your funds are in an AU company and taxes are paid. Important thing is to be viewed as earning your income in AU.

I'm retired so bit more straight forward. Going back to Melbourne to get my tax done.

My assets are several rental properities and super fund and pension. Family home. Im on extended holiday here. Vode for livinv here.

Hard pressed to view my earnings are from living os.

[CBR250]

CBR250. Have you thought of an appropriate super fund. Im sure a good financial advisor can set someting up where your funds are in an AU company and taxes are paid. Important thing is to be viewed as earning your income in AU.

I'm retired so bit more straight forward. Going back to Melbourne to get my tax done.

My assets are several rental properities and super fund and pension. Family home. Im on extended holiday here. Vode for livinv here.

Hard pressed to view my earnings are from living os.

Thanks Jacksam. Yes, I do have a Super fund, and as it is an industry fund, it seems that even living overseas will not lose me the tax concessions.

I have been wary about putting the rest of my money into the Super fund despite the tax advantages, because as one of the posters above (Berek) pointed out, government policy re Super could rapidly change and disadvantage us all. So instead I have a reasonable amount in shares, and some in term deposits. But aside from trying to maximise returns on capital, I'm always - following the sage advice of Kerry Packer - trying to minimise costs/taxes (legally, of course).

[CBR250]

And god help us if the LNP stay in office... Super is next on the hit list.

I would love a clear picture of where Super will go over the next few years. It is a huge amount of money, and they don't want to spook the payers, but of course must lie awake at night figuring out ways to get their scheming mitts into it.

So, what makes you think super is next? Gut reaction, media, or inside info? And what changes do you believe may occur - or have been forecast by pundits as likely?

have a read of the article below

http://www.superguide.com.au/superannuation-topics/liberal-party

There's not too much that's a worry for me in here as yet.

The point for focus will be the findings of the current Inquiry into Super due later this year. I and many others will have to watch this one closely.

[ozzieovaseas]

As an Aussie I often check threads like this. I believe its crucual for those occasionally travelling to and from Australia to be aware of the tax laws and be on top of things so to speak.

As so many others here, i still cannot come to any solid conclusions about my own residency status IF i was challenged by the ATO.

Checking the ATO site seems to be useless as they word everything in such a way that you cannot reach a certain decision on residency.

It is interesting to note this sentance, under the determination of residency pages:

"The standards we use to determine your residency status are not the same as those used by the Department of Immigration and Border Protection."

What that means in real terms i have no idea, and maybe not a big deal, but since they seldom offer anything specific it did make me curious as to why they would offer that sentance.

SO.......I am specifically looking for any case where the ATO pursued/penalised someone for lodging a tax return based on being a "resident", when the ATO would have deemed that taxpayers circumstances as coming under "non resident" status.

My experience:

Whilest perusing the ATO website a few years back (being overseas) i noticed a time calculator which they claimed would be used for determing periods of non residency effecting the way tax would be administered.

Basically what it was saying was your entitlement to a tax free threshhold would diminish for each day you were out of the country...

ie. So if out of the country for 6 months would be $18,200 divided by half....therefor allowing you only $9100 threshold

While overseas i also looked into lodging online and every site asked the same question in the first few rounds..how many days were you out of Australia?

I then ignored the online sites and decided to hang off until going home to do my tax. To my suprise the accountant knew i had stayed away from Aus for an extended period, yet asked no details as to lengths of time away in the previous tax year(s).

The final result, after him asking a few questions about "circumstances" and "intentions", was that my tax was lodged as being a resident with no questions asked.

NOW:

I have checked the previous links on this thread today (suprise suprise-some of the ATO links/pages have been closed down)

I found no cases whatsoever where the ATO actually went after anyone based on the ATO disagreeing on a residency status after lodgement. (There are a few cases involving pensions and benefits but thats not rellevent for this conversation)

As another poster stated..they dont seem hellbent on enforcing expats to the full nasty extent of what they claim, UNLESS someone is willfully dishonest, like claiming something they shouldnt whilest being out of AUS.

Another interesting point: In a previous years tax return i actually did myself from within Aus (cant remember what year) the question was asked "Are you leaving Australia with the intent of becoming a non resident in the future?"

Well you can see where that question was going and a pretty good trap/setup question if you answered yes!

Anyway i am keen to hear of anyones specific incidences as we can sometimes use those rulings/judgements in our own cases if they are similiar. At the least we can share info or experiences that might possibly save some from tearing our (allready diminishing) hair out!!

Reading these forums i sometimes get the impression that its "every man for himself" regarding foreigners in Thailand, but in this case maybe us Aussies can stick together?

After all we do seem to have a common enemy that seems to want to threaten our way of life since it doesnt fit into the norm

[bureaucrazy]

Sorry I'm a bit late to the party here... admittedly I've only read the first and last few posts, so my apologies if I've missed something.

This ruling from the ATO might be interesting reading for some of you...

It makes for fairly dry reading, so I can give you a commentary from my reference materials:

This Ruling contains guidelines for determining whether individuals who leave Australia temporarily to live overseas cease to be Australian residents for income tax purposes during their overseas stay.

The Ruling says that, while it is not possible to provide conclusive rules for determining the residency status of individuals leaving Australia temporarily, the following factors are considered to be relevant by the Tax Office:

• • the intended and actual length of the individual's stay in the overseas country;

• • any intention either to return to Australia at some definite point in time or to travel to another country;

• • the abandonment of any residence or place of abode the individual may have had in Australia;

• • the duration and continuity of the individual's presence in the overseas country; and

• • the durability of association that the individual has with a particular place in Australia.

The Ruling makes the point that the weight given to each factor will vary with the individual circumstances of each case and no single factor is conclusive.

However, the Commissioner says that where a taxpayer leaves Australia for an unspecified or a substantial period and establishes a home in another country, that home will represent a permanent place of abode of the taxpayer outside Australia, subject to a consideration of the other factors listed above. As a broad rule of thumb, a period of two years or more would generally be regarded by the Tax Office as a substantial period for the purposes of determining the permanency of the taxpayer's stay in the other country.

Likewise, the Commissioner says that, generally speaking, a taxpayer who leaves Australia with the intention of returning to Australia at the end of a transitory stay overseas would normally remain a resident of Australia for income tax purposes unless he or she can show that other factors such as those listed above require the conclusion that his or her permanent place of abode was outside Australia. As a general proposition, an overseas stay for a duration of less than two years would be considered as being of a transitory nature.

The Ruling stresses, though, that the duration of an individual's stay or intended stay out of Australia is not, of itself, conclusive and must be considered along with all the other relevant factors.

To add my 2 cents...

* For most of you, the length of your stay outside of Australia is extensive, but not conclusive.

* If the ATO can not satisfy themselves that you have set up a permanent place of residence (as in an abode) then it's very difficult for them say you fail the domicile test.

* I'd say, as this applies to most expats in Thailand, there's two points you would need to focus on. Firstly that you still have a strong connection to some specific location in Australia. Frequent skype conversations, bank accounts, some sort of community membership, etc. Secondly that you don't have a permanent address whilst abroad.

* It's absurdly unlikely the ATO would penalize a taxpayer even if they could prove that you were a non-resident, they would simply amend the tax return and ask you to pay interest on the short fall. The ATO will only apply penalties where they can prove you were actively misrepresenting your situation to avoid paying tax. Given the complexity of this area of tax law, it's almost impossible to say someone actively misrepresented the facts as opposed to making a mistake.

[Will27]

As an Aussie I often check threads like this. I believe its crucual for those occasionally travelling to and from Australia to be aware of the tax laws and be on top of things so to speak.

As so many others here, i still cannot come to any solid conclusions about my own residency status IF i was challenged by the ATO.

Checking the ATO site seems to be useless as they word everything in such a way that you cannot reach a certain decision on residency.

It is interesting to note this sentance, under the determination of residency pages:

"The standards we use to determine your residency status are not the same as those used by the Department of Immigration and Border Protection."

What that means in real terms i have no idea, and maybe not a big deal, but since they seldom offer anything specific it did make me curious as to why they would offer that sentance.

SO.......I am specifically looking for any case where the ATO pursued/penalised someone for lodging a tax return based on being a "resident", when the ATO would have deemed that taxpayers circumstances as coming under "non resident" status.

What that means, is that the formula/residency test used by the ATO, is not the same used by Immigration.

Government departments such as Centrelink, Immigration and the ATO use different tests for residency.

Other than that, I wouldn't be poking the bear.

[MickMick15]

Hi,

My situation is that I work in Australia for 2/3 of the year and live in Thailand for 1/3 of the year. I fit into the Australia resident for tax purposes but I am wondering exactly what I put for my Residential address when doing my Tax. I have a post box in Perth but no residential address anywhere. I urgently need help with this as I need the cash. I have already completed my E-tax but have not sent it to the ATO yet due to the residential address concern.

should I put a family address? my old address, my work address (where I live for 2/3 of the year) or my Thailand address?

Thanks

[ripstanley]

Where do you live while you work in Australia? You must have an address? Give this as your residential address and your post box as your postal address.

[Somebodee]

Lots of great information here. Rather than start a new thread.

I was just wandering how many aussies here have been able to remain a tax resident back in Oz for over two years whilst living in Thailand for most of the year?

The reason is I may be moving to Thailand this year with the plan on just living off dividend payments. As others have mentioned

without the tax free threshold there would be around 8k more in income taxes. I would like if I could to stay a tax resident as long as possible.

Not sure if this makes any difference with the ATO trying to establish a non residency status, but the wife owns two houses in different cities which we will be staying at but not any one in particular and no fixed time frames in each city/town.

E.g maybe 6 months in Chiang Mai, maybe 2 months in Bangkok, maybe 4 months Hua Hin.