Accountant back in the nanny state is asking questions...

[ghworker2010]

I live and work in Thailand and have no desire to go back to the nanny state of oz.

The accountant is preparing my T A X return and is asking me if I work over here or not. I think its best to answer no isnt it? There will surely be no reporting between the countries as thai tax authorities are too incompetent to do this. If I declare thai income on an oz tax return then no doubt this will trigger issues for me down the line. No way...

Also, she is saying that we might have to consider my tax residency status blah blah... Im obviously not going to do this as it will cost me $10k more a year in tax. I think that I will tell her that my wife and I are relocating back to oz at the end of the year and next year find a new accountant. A few yrs ago my old accountant was talking along the same lines and thats why I ditched him.

If you were born in the mother country and have any comments to make on this subject please advise...

thanks

[robblok]

Not sure how it is back in OZ but in the Netherlands the tax office can check the status of your tax by now not changing where you live you might end up with a lot of back taxes. Your risk your tax accountant is right to have brought it up.

[barryw52]

In an Australian who did work in Thailand and is now retired here. Firstly the ATO and immigration are directly linked so they can see where you spend your time you have live in Australia for 6 months and 1 day every year to qualify as a resident for tax purposes. Your unlike to pay Australian tax if your only erring income here unless you have income from Sources in Australia like rental property which when then mostly be negative geared anyway. You will pay 15% withholding tax on any interest you earned in Australia. A good account who deals with expats knows this and a lot more. Pm me if you want a name.

[Pdavies99]

Read through the replies, not very clear or accurate!

First of all, you have to find out if Thailand and OZ have double taxation treaties, which I suspect they have.

If so, you can elect either country in which to pay taxes applicable. (The understanding this way is that you then don't pay in both countries!)

Often though is the misconception that you can work tax free? Not really so, normally, and I say normally if you do not establish taxes are paid here then OZ want there bite! (Don't forget eventually most people caught caught up with and suffer fines as well tax liabilities)

I have employed knowledge only of UK taxation treaties and UK citizens, but I hope this assists you.

[Bcgardener]

If you are working here and have no other income in Australia, including interest on bank accounts, then you need to declare yourself as a non-resident for tax purposes if you want to do things correctly although, as you said, I doubt that the ATO has direct links to Thai revenue Department. The ATO will look at your immigration history if they check on you and will make you a non-resident anyway if they find out you are living overseas. If you stay as a resident and the ATO find out about your income you will have to pay the difference between the Thai tax paid on your salary and what would have been paid in Australia.

The problems occur if you still have income or assets earning income in Australia, are working here and remain a resident as they will go after you for the tax difference mentioned above including arrears or may fine you and go after the difference between resident and non resident rates. If you declare yourself as a non resident then you will lose your tax free threshold on Australian income and have to pay a flat 30% on any income there.

If you have income property rental there are some nice tax deductions you can claim as a non resident, like a business class return ticket to Australia once per year to inspect the property and also any other expenses incurred for the trip.

All of this is from my personal experience as an Aussie who has had a good paying job here for 5 years but still gets rental income from my house that does not have a mortgage so is positively geared. I am a non-resident for tax purposes.

Hope all this makes sense.

[NanLaew]

The premise of government revenue agencies world wide is that you have to pay some taxes somewhere.

Decades ago, dual taxation agreements began to be drafted and most everyone had the option to pay the least or not at all.

But nowadays, through technology and a common interest in grabbing anything they feel you are not entitled to, governments have the mechanisms to actually verify if what you claim is true; the Australian government more than most.

[monkey4u]

In an Australian who did work in Thailand and is now retired here. Firstly the ATO and immigration are directly linked so they can see where you spend your time you have live in Australia for 6 months and 1 day every year to qualify as a resident for tax purposes. Your unlike to pay Australian tax if your only erring income here unless you have income from Sources in Australia like rental property which when then mostly be negative geared anyway. You will pay 15% withholding tax on any interest you earned in Australia. A good account who deals with expats knows this and a lot more. Pm me if you want a name.

Actually you need to be away from Oz for less than 6 months at a time

I go back every 5 1/2 months for a few days

No drama just collect my income and do a tax return each year

The only down side is I have to pay my medicare levy 2 1/2 % I think

[otherstuff1957]

In the US, if you tell the tax dept. (IRS) that you are living and working overseas, the first $100,000 earned overseas is tax free. In addition, I believe that the US and Thailand have a tax treaty, so taxes paid in one country can be deducted from taxes own in the other.

I don't know about Aussie tax rules, but you might want to protect yourself by filing now.

[Capt Rob]

If you are working here and have no other income in Australia, including interest on bank accounts, then you need to declare yourself as a non-resident for tax purposes if you want to do things correctly although, as you said, I doubt that the ATO has direct links to Thai revenue Department. The ATO will look at your immigration history if they check on you and will make you a non-resident anyway if they find out you are living overseas. If you stay as a resident and the ATO find out about your income you will have to pay the difference between the Thai tax paid on your salary and what would have been paid in Australia.

The problems occur if you still have income or assets earning income in Australia, are working here and remain a resident as they will go after you for the tax difference mentioned above including arrears or may fine you and go after the difference between resident and non resident rates. If you declare yourself as a non resident then you will lose your tax free threshold on Australian income and have to pay a flat 30% on any income there.

If you have income property rental there are some nice tax deductions you can claim as a non resident, like a business class return ticket to Australia once per year to inspect the property and also any other expenses incurred for the trip.

All of this is from my personal experience as an Aussie who has had a good paying job here for 5 years but still gets rental income from my house that does not have a mortgage so is positively geared. I am a non-resident for tax purposes.

Hope all this makes sense.

" Bcgardener " has summed it up - also to consider any super funds you may be with as they have a reporting structure, as do health funds although I doubt you are with them for no benefit unless you return to Oz

[Linzz]

I would have thought all income is taxed in the country of residence (where it is made). If you are taxed in Thailand then you shouldn't be taxed in Australia for income generated in Thailand and vice versa. Or that becomes double taxation. Any income you receive in Australia should be taxed without recourse to other income in Thailand .The less you tell the better off you will be (but I am not an accountant....maybe answered better above.)

Edited September 2, 2015 by Linzz

[Pepper1959]

My accountant told me I would be taxed by Aust Govt on any earnings from work and bank interest in Thailand but given tax credits. The second issue is whether your primary address is therefore Thailand or Australia, you have to answer this for the ATO. If you maintain Australia, then you get the $18000 tax free threshold, but will pay Medicare levy etc, if you say no, then you are taxed for dollar one but are not charged the Medicare levy, this is the simply way it was explained to me.

I have had people who say they never declare their earnings. The way I look at it, I have audit done by the ATO when I was a uni student, just randomly selected and I never want one again, so I just don't take any chances.

[daveAustin]

Not resident for tax purposes, don't work in Thailand. If they ask, surviving on wired money for visa (?) or perhaps your missus is keeping you.

[ZuluSixNine]

I lived I Thailand for a few years, when it came to tax time I contacted the ATO and explained that I haven't been living in OZ so I haven't been using the roads, water, power, gas, medicare or any public services etc....

So I have no interest in submitting a tax return or paying any tax and requested that the ATO should give a valid reason why I should . That was six years ago and I am still waiting for a reply. I live in OZ now and have submitted returns since

My ATO file on MyGov states that I haven't submitted a return for those years and that's all that's come of it.

[Phuketboy]

If you are not returning to Australia, then do this tax return as a resident of Australia, that way you get the $18000 tax free threshold. Once the tax return is done change your residence to Thailand so you do not need to pay tax or do a return in Australia anymore. Unless of course you are still earning an income there, then you will still need to pay tax there. It gets confusing if you have income coming in from multiple countries. Simplify things for yourself. If you are never returning to Australia, close all ties and transfer everything to where you want to live.

[manfredtillmann]

you live and work in thailand - so why would you have to file a tax return. do you have investment income in oz?

[bazza40]

Eventually, the ATO will catch up with you. Then, depending on how serious the situation is, they can either slap you on the wrist or make your life hell. And they can go back for as many years as they want to, demanding you produce documents of proof all the way.

myGov links together bodies such as Medicare, Centrelink, the ATO, Border Security etc. Big Brother is slowly getting it together.

Changing accountants is not an answer. They are agents, and as such will surrender you to the ATO in an eyeblink if the ATO calls on them.

I'm not an expert; however, I don't think your earnings in Thailand can be taxed in Australia. Anything you are earning in Australia will be, and I think if you are classed as non-resident you also have extra tax. Your accountant should be able to advise you.

Apologies if this post is unpalatable; however, one should never underestimate the capacity of the ATO for sheer bastardry.

[Scuba 1st]

Remember ATO stands for "Australian Terrorist Organization".

[manfredtillmann]

Eventually, the ATO will catch up with you. Then, depending on how serious the situation is, they can either slap you on the wrist or make your life hell. And they can go back for as many years as they want to, demanding you produce documents of proof all the way.

myGov links together bodies such as Medicare, Centrelink, the ATO, Border Security etc. Big Brother is slowly getting it together.

Changing accountants is not an answer. They are agents, and as such will surrender you to the ATO in an eyeblink if the ATO calls on them.

I'm not an expert; however, I don't think your earnings in Thailand can be taxed in Australia. Anything you are earning in Australia will be, and I think if you are classed as non-resident you also have extra tax. Your accountant should be able to advise you.

Apologies if this post is unpalatable; however, one should never underestimate the capacity of the ATO for sheer bastardry.

i disagree. if the op has no income derived from australian sources than he has no tax obligations in australia. (ask paul hogan, he can explain that in several million ways). different story if the op gains income in thailand as result of being the director or employee of an oz company working contract here - or similar. or - if i asked in my previous post, he draws income from investments such as real estate.

[F4UCorsair]

I've lived and worked out of Australia for a lot of years, and my advice is this.........disregard everything you read here and ask your accountant for detailed advice on all options. She is bound to keep it confidential and won't drop you in to the Tax Dept.

Laws change, and others experiences won't help and probably confuse you.

[Somebodee]

Another consideration worth weighing up is if you still retain a PPOR in Oz whether it's being rented out or not.

I worked OS for several years and declared myself a non resident for tax purposes, for all those years I did not received

the tax free threshold. But tax paid over those years was peanuts compare to what I saved on my return.

On my return to Oz I claimed the 6 year ruling on my PPOR, that delivered a windfall of over $600K tax free.

[bendejo]

Also, she is saying that we might have to consider my tax residency status blah blah... Im obviously not going to do this as it will cost me $10k more a year in tax. I think that I will tell her that my wife and I are relocating back to oz at the end of the year and next year find a new accountant. A few yrs ago my old accountant was talking along the same lines and thats why I ditched him.

You're thinking of your accountants as working against you, while they really work for you. You pay them, right?

Dodging her is not going to help you get past rules, penalties, etc. Changing accountants every year does not buy you anything, it's about the tax collector.

[fritzzz25]

search for "australia thailand tax treaty" and have a look at what the treaty states

[louse1953]

In an Australian who did work in Thailand and is now retired here. Firstly the ATO and immigration are directly linked so they can see where you spend your time you have live in Australia for 6 months and 1 day every year to qualify as a resident for tax purposes. Your unlike to pay Australian tax if your only erring income here unless you have income from Sources in Australia like rental property which when then mostly be negative geared anyway. You will pay 15% withholding tax on any interest you earned in Australia. A good account who deals with expats knows this and a lot more. Pm me if you want a name.

There is no avoiding the ATO in the electronic age if you want to be reasonably honest.Baz is right,except on tax on your earnings in Oz.Once you are deemed a non resident for tax reasons you pay 32 1/2% on everything you earn,including bank interest, and the starting point is zero.F.....g outragious.This is to tax Chinese and Indians in the East coast property market,but small fry like me are caught up in this catch all.All my bank money is in my super now,which they can't touch,yet,if you "believe"our fearless leader.When my yearly annuity is paid into my bank account,it,s straight up here.Super was ok when i set it up,but taking a hit now,but that's the game you play.Also i think your Medicare ceases after 4 years away.Thailand has no agreement with Aust.to reveal your business here,including bank accounts.Hockey talked about it but it got to hard for him.It's a hard world,the all want the middleman's hard earned but you can be creative.A pox on them.

[JimHuaHin]

Agree with Bcgardener and Capt Rob.

There is a dual taxation agreement between Australia and Thailand, and it has been active for a few decades .... but I have been unable to find a copy of it online, even on the ATO web site.

[ghworker2010]

Thanks for all the comments. I have income sources in oz and thus will be hit with the outrageous 30% tax on everything right up.

After reading the comments now I think that I should be upfront with my accountant and discuss options. I dont want to have issues with the ATO in the future....

[Straight8]

In an Australian who did work in Thailand and is now retired here. Firstly the ATO and immigration are directly linked so they can see where you spend your time you have live in Australia for 6 months and 1 day every year to qualify as a resident for tax purposes. Your unlike to pay Australian tax if your only erring income here unless you have income from Sources in Australia like rental property which when then mostly be negative geared anyway. You will pay 15% withholding tax on any interest you earned in Australia. A good account who deals with expats knows this and a lot more. Pm me if you want a name.

Pretty much what Barry says, but its actually 10% withholding tax on any bank interest earned deducted by the bank at the end of each month, if that's what Barry meant when he says 15%.

Other than that, if you have left Oz permanently, live outside of Oz for more than 183 days and nothing suggests otherwise back in Oz, then technically you are regarded as a non-resident for tax paying purpose. As far as I know [via my account] you don't even need to lodge a return.

[F4UCorsair]

Thanks for all the comments. I have income sources in oz and thus will be hit with the outrageous 30% tax on everything right up.

After reading the comments now I think that I should be upfront with my accountant and discuss options. I dont want to have issues with the ATO in the future....

Why not hire another accountant to give an opinion first, then ask your regular accountant. For the sake of a couple of hundred $$, it will be worth it.

Is the information not available online? I haven't read all posts so that may have been covered.

Incidentally, it's not a nanny state because they insist on their cut of YOUR cash.

Edited September 3, 2015 by F4UCorsair

[Straight8]

Thanks for all the comments. I have income sources in oz and thus will be hit with the outrageous 30% tax on everything right up.

After reading the comments now I think that I should be upfront with my accountant and discuss options. I dont want to have issues with the ATO in the future....

If you are classed as a non-resident, then you will not necessarily pay 30% tax on everything.

It depends how the income is earned, but in most cases it will be vary little.

If you invest on the stockmarket for example, capital gains are tax free, dividends are tax free on fully franked dividends but are taxed up to 30% depending on your place of residency on your holdings. If a dividend/distribution on a payment made by a Company in Oz is Conduit Foreign Income [it will state this on your dividend statement], then even if the the dividend has no franking [meaning unfranked 100%], you pay no tax due to being a non-resident.

Bank Interest is taxed at a rate of 10%

Your account will know all this as long as you explain your situation fully.

Edited September 3, 2015 by Straight8

[ghworker2010]

In an Australian who did work in Thailand and is now retired here. Firstly the ATO and immigration are directly linked so they can see where you spend your time you have live in Australia for 6 months and 1 day every year to qualify as a resident for tax purposes. Your unlike to pay Australian tax if your only erring income here unless you have income from Sources in Australia like rental property which when then mostly be negative geared anyway. You will pay 15% withholding tax on any interest you earned in Australia. A good account who deals with expats knows this and a lot more. Pm me if you want a name.

Pretty much what Barry says, but its actually 10% withholding tax on any bank interest earned deducted by the bank at the end of each month, if that's what Barry meant when he says 15%.

Other than that, if you have left Oz permanently, live outside of Oz for more than 183 days and nothing suggests otherwise back in Oz, then technically you are regarded as a non-resident for tax paying purpose. As far as I know [via my account] you don't even need to lodge a return.

I just read this from another source....

If you cease to be an Australian resident for tax purposes, you should contact your Australian bank and advise them of your situation. And yes, they will probably apply 15% non-resident withholding tax to your interest income. However, as a non-resident of Australia for tax purposes, interest income on which the non-resident withholding tax is withheld would not need to be included in your Australian income tax return (as the non-resident withholding tax serves as a final tax for Australian tax purposes).

____________________

Can I interpret this to mean that if I pay 15% withholding tax on bank interest then when I do the yearly tax return that total interest income is not included in the final taxable income figure on the return ie there is no double taxation of the bank interest? ie I only have to pay 15% not 30% on bank interest?

[louse1953]

If you are not returning to Australia, then do this tax return as a resident of Australia, that way you get the $18000 tax free threshold. Once the tax return is done change your residence to Thailand so you do not need to pay tax or do a return in Australia anymore. Unless of course you are still earning an income there, then you will still need to pay tax there. It gets confusing if you have income coming in from multiple countries. Simplify things for yourself. If you are never returning to Australia, close all ties and transfer everything to where you want to live.

If you are out of the country more than 6 months they deem you as a non resident if you receive an income in Aust,ie.rent or bank interest,starting from $0.