Working Overseas - Queries, advice, ATO, what to do and not to do

[shifted]

An opportunity has popped up I'm considering going for that means working out of Dubai.

There's a few people here that seem to work overseas so figured it's not a bad place to start at least getting an idea what is involved and how it all worked. I'd love to maximise any potential reductions in tax liability as much as possible.

The recruiter stated its tax free, I'd want to transfer money into the Australian accounts though to service things like bills and any shares I wish to buy in future. By transferring to the account will I be taxed on that as income, or only on whatever "interest" is gained from it?

Is there anything people set up or found helpful/useful whilst away?

Not really too fussed about the lifestyle over there, all I want is a motorbike and a kayak. I'm looking at it as a good opportunity for travelling parts of Europe at the same time. Kind of like a working holiday.

Tips?


Cheers!

[adrenalin]

I think it depends on how long you spend outside of Australia in regards to tax...

I worked out of China however the pay was coming from an Australian company so i just put it into my Aus bank account, paid taxes as per normal.

Another bloke there hadnt been back to Aus in 2 years \ got paid into an Aus bank account and i am fairly sure wasnt paying any tax.

Hopefully someone here can confirm this.

[LostInTheWoods]

1. Get a good accountant who is well versed in international tax law of this type.
2. Take out audit insurance, so when you have to spend 000's in accountant fees going through an audit by the ato, its covered by the insurance.
3. Don't listen to the recruiter. Tax free in country yes, but unless you set very specific conditions and absolutely present as if you were never returning to Australia, you are liable for tax here - on the whole amount earnt, not the small amount transferred.

The days of tax free income with ease are long gone.

The penalty for getting it wrong is huge. talk to a professional. Take advice here with some of the guys that may well be versed, but take no risks.

Even something as simple as the company paying your accomodation in Dubau, can add to the ATO deeming you were not a true resident outside of AU, and hurt your case.

I'm barely familiar with this, but did a reasonable amount of research for my own consideration. Cleanest thing to do is sell up everything and have no ties back home. But again, seek very good professional help, not your average accountant.

[shifted]

Intent would be to go for 2-5 years and return to Australia thereafter.

The residency test online seems to point to not being considered at Australian resident for taxation purposes unless there's income within Australia (which there will not be unless I sell/buy shares.)



You are not an Australian resident for taxation purposes following your departure from Australia

As a foreign resident, you only need to lodge annual Australian income tax returns if you receive income from sources in Australia. In this case, you:
Will be subject to income tax at foreign resident rates. There is no tax-free threshold.
Need to advise entities from whom you derive Australian investment income that you are not an Australian resident for tax purposes. The correct amount of tax can be withheld from your investment income.
May need to advise your employer that you are not an Australian resident for tax purposes so that the correct amount of tax can then be withheld from your salary or wages.
May be entitled to a departing Australia superannuation payment Link opens in new window once you leave Australia if you held a temporary visa (since cancelled or expired).

If you have a HELP or TSL debt you will need to declare your worldwide income or lodge a non-lodgment advice using our online services via myGov from 1 July 2017, read more about Overseas repayments. Link opens in new window

You should keep a copy of this decision for your taxation records.


While you are a resident of Australia, you will have to pay tax here for that income, not just what gets transferred over.

If you move overseas and are not classified as a resident according to the ATO Residency test, the income will not be taxed here.

Working overseas you may pay tax there and those tax payments may be used as a credit/offset towards you tax liabilities here.

There isn’t anything that we know of that can be used to help manage your tax liabilities as the ATO are very “hot” on this subject due to the amount of money being earned by tax payers overseas and subsequent tax income for the ATO. From experience with other clients, the ATO get information from banks on monies being transferred from overseas into accounts here in Australia to ensure it is declared.


Audit insurance is a good one, didn't realise that was possible - will look into that. If the income is paid into a bank account overseas, the only money coming into the Australian bank account would be to service bills/payments as needed (eg insurance costs, etc).

Accommodation being covered by the employer is something to be discussed as talks progress, seems like having them cover the accommodation may not be ideal.

Happy to pay for someone trained in the area to discuss this further once talks progress a bit more, at the moment trying to see what's potentially involved.

[masTers]

There are huge new agreements between most Countries and most Banks with sharing information. Just because the money doesn't hit an Australian bank account, doesn't mean the ATO don't know about it, (and Trump sees almost every transaction now as well).

Buckets can put you in touch with an Accountant who is a specialist in this field. He is well worth paying the hourly fee for a chat.

[TheChad]

100% do not use google and advice from friends/forums.
Except for the advice that's just been given, go see a professional. It won't be cheap, but it's cheaper than what you'll cop in fines if you fuck it up.

I've had 2x 1hr meeting with an accounting firm who is handling my Aus/Norway tax, I have NFI what's going on and I consider myself pretty good with numbers. I'm sure it will all make sense when it's done, but in the meantime I'm glad I don't have to be doing all this myself.

[racegtst]

[QUOTE=shifted;1325663]Intent would be to go for 2-5 years and return to Australia thereafter.

The residency test online seems to point to not being considered at Australian resident for taxation purposes unless there's income within Australia (which there will not be unless I sell/buy shares.)



I think the residency test is if your leave Australia permanently but if you plan to return you may still be considered an Australian resident.

Like others have said, get a specialist Accountant and go from there.

[Damo 69]

I could write you a small novel on this, but.

I used this guy https://www.bdo.com.au/en-au/our-people/mark-pollock

He gave me a paper on the Do's and Don'ts while away, what to do before you leave and what to do when you come back. It was tailored to my situation as it was more complex than most.

As above, the global networks of banks now share everything, so it isn't a case of stash it in a tax free obscure country as more than likely you will get pinged.
Unless you can clearly demonstrate you are no longer a resident of Australia and not receiving any benefit from Australia. I.e. if you have a wife and kids at school in Australia while you were OS tax free, you will be taxed, and rightly so.

Ignorance is not bliss, do not be a dumb pingpingpingping and try and yolo it, get good solid tax advice and stick to the plan and actually be a non resident.

I don't directly own any shares so can't comment on that, however a competent tax accountant will be able to advise you how to do so (it isnt hard to do, just need to purchase them as a non resident) might be easier to get an overseas trading platform which allows ASX Purchases, also need to let the share clearing houses know you are a non resident and they retain some tax on sales.
I am going through purchasing a property at the moment as a non resident with an OS income, it is still achievable just a few more boxes to tick.

Get that all squared away and enjoy yourself mate, expating life is good for a few years while you are young, just have a clear plan of what you want out of it (no different to FIFO, don't get the golden hand cuffs) and most importantly make good use of your breaks while you are over that way and see the world.

Anything else PM me

[TJ]

PM Buckets for a success story on avoiding Aussie tax

[Buckets]

How you structure yourself all depends on what you're wishing to do and what your ties are to Australia. I'm not going to provide any advice here as your situation will not be the same as mine and unfortunately my accountants won't touch clients not referred to them and I'm not in a position with them yet where I'm significant enough to them to be able to refer new people.

For what little it's worth I'm employed in Bermuda by a company registered in Jersey, operate across Africa out of Mauritius and have my primary residence split between my farm in Botswana and my apartment in Egypt. I pay the full legally required taxation on any income I earn in any country I earn it in. These tax credits can be used as an offset against Australian liabilities if required. So I'm not avoiding tax at all. I also pay tax at the increased non-resident rates on any Australian income my activities in the country generates and forego most available deductions as a non resident.

It's not an easy decision to make. You have to be ready to drastically remove yourself from everything and everyone you know. And even then you need to be careful. A wrong tick in a box, I wrong transaction back to Australia to service liabilities or help family members can cause lots of undue attention. The ATO knows more about you than you do. It knows everything you do regardless of where you do it. Never try to dodge them, you will lose.

Long story short. There's no such thing as tax free any more. Don't let people sell you that lie.

You've already admitted intent to return after a specified period away... This may not be for you.

[shifted]

I see, so even vehicles etc need to be transferred? Sounds rather intricate. I was intending to keep the cars and bike in storage. If I have to transfer them... then so be it.

Only thing tying me to Australia are friends and parents. My intention with 2-5 years is essentially to see how things go, if things work out I'll be whereever I need to, if it ends up I don't return to Australia for 10+ years then so be it. Life will go wherever it needs to.

How does it work then, your citizenship isn't affected, you're just a resident elsewhere? Can come back whenever you want?

I understand a suitably qualified accountant is worth speaking to, it's good to know at least what's roughly involved from the outset. Providing the first few discussions with the company go well, will have to book in some time with a suitable accountant.

[mr top hat]

im currently living in the UK

from my research i think if you're coming back to aus within a reasonable timeframe (1-5 years) then you stay a resident. you declare all your income from the country and as long as the tax paid on said income was as high or higher than
the amount of tax you would pay in aus, they dont charge much or any tax when you do your return.

[S85FI]

What ever happen to cash jobs?

[Damo 69]

im currently living in the UK

from my research i think if you're coming back to aus within a reasonable timeframe (1-5 years) then you stay a resident. you declare all your income from the country and as long as the tax paid on said income was as high or higher than
the amount of tax you would pay in aus, they dont charge much or any tax when you do your return.

UK has dual tax agreement so no real issue, my experience is primarily following on from where I was before the UK which was a income tax free country.