Australia - Tax haven?
 

Report from yahoo and reuters today: (Some advantages then?)

Kim Clijsters is considering becoming an Australian citizen to spare her from the clutches of the Belgian taxman, according to Belgian media reports.

"Kim has never said she wanted to become an Australian (citizen). On the contrary she has always said she was and will remain Belgian," her father Leo Clijsters was quoted as saying by local media on Wednesday.

"But as her manager I have to look at all options. We can't dismiss this without studying it carefully."

Clijsters, who is ranked fourth on the WTA Tour and beat Serena Williams to clinch the prestigious Tour Championship last month, pays the taxman between 50 and 60 percent of her earnings -- much less than footballers in Belgium, Leo Clijsters said.

"All I'm asking for is equality. This would make it harder for some of our best sportspeople to be based in Monaco," he said referring to the Mediterranean tax haven.

The teenager spends much of her time in Australia, home of long-term boyfriend and world number one Lleyton Hewitt, and has even posed snuggling up to koalas for photographers.

Leo Clijsters said the Australian authorities had drawn his attention to the country's "more advantageous tax rules" last year when Kim was thinking about buying an apartment in Adelaide.

Australian officials were not immediately available to comment.

Re: Australia - Tax haven?
 

Another factually incorrect media report: citizenship has nothing to do with tax residency which in turn determines whether/how one is taxed in Australia ...

Ironically as a non-UK domiciled person she'd be better off moving to the UK and keeping her income offshore. Isn't Wayne Arthurs (the Aussie tennis player) already living in London?

Maybe I should send Kim an email ...!

Best regards.

Australia - tax haven
 

This has nothing to do with Australian tax, or with residence in Australia.

From the report, Clijsters is seeking to avoid Belgian tax, and becoming an Australian citizen may help her in this regard.

I know nothing about Belgian tax, but my wild guess would be that

- Clijsters suffers Belgian tax on her worldwide income because she is a Belgian citizen,

- that she would not suffer this tax on her non-Belgian income if she were not a Belgian citizen,

- that, if she takes the citizenship of another country she will, under Belgian law, lose her Belgian citizenship, and

- she is considering taking Australian citizenship because there is some basis on which she can do so.

If I am right, losing her Belgian citizenship will reduce her Belgian tax bill, whereas taking Australian citizenship will not increase her Australlian tax bill (because, as Alan says, liability to Australian tax does not depend on nationality).

There is no suggestion that being taxed in Australia would, in general terms, cost less than being taxed in Belgium on the same income. I haven't investigated the matter, but it would suprise me if Australian taxpayers were taxed at lower rates than Belgians.

Not sure if you got the right end of the stick UDS. Tax residence is what matters in the case of both Belgium and Australia, not citizenship. Residence is defined differently by each country, but what matters is effectively where Clijsters chooses to be and is resident.

Australia might not be a much lower tax regime than Belgium but it's where she wants to live because she wants to spend her time with her boyfriend.

Cheers - Don

Australia - Tax haven?
 

In that case the quoted article is wrong. Taking out Australian nationality is not going to affect Clijster's tax liability, and cannot be her motivation.

Re: Australia - Tax haven?
 

Correct. Just as Alan Collett said!

Q to Kim Clijsters: 'Some wonder where your home is: Belgium or Australia?'

A: ,,I love Australia. Sun and sea. A magnificent country, where even in winter you still have 20 C° and where you still find pure nature. I know already certain places, but there is still a lot to discover. After the brilliant game, (= Antwerp tournament, Nov 14, gala exhibition match between Justine Henin and Kim) I will travel with Lleyton during 3 weeks to the north east. From Brisbane to the Barrier Reef with some stops in between, eg in Noosa. Patrick Rafter has his ranch over there and we certainly will visit him there.

And I hope to dive. Lleyton will be a bit hard to persuade, I am afraid. But as beautiful as Australia is, my roots are in Belgium and I will never deny them. My family and my friends live here. I am going to build a house here soon. It has to be modern with class. It’s definitely not going to be a huge mansion, I want to keep it subdued. But with style.''

Re: Australia - Tax haven?
 

Well why not its great place to be taxed?

AUSTRALIA is supposed to be the land of the fair go. And back in 1996, John Howard was elected on the promise of introducing a fair tax system. But the ABC of tax reform is not limited to the GST. If you study hard to get a good education, then work hard to gain promotion or build your own business, what happens? You do enough to receive some reward for your efforts and the tax office confiscates half of every extra dollar you earn. The tax gospel according to Mr Howard and Peter Costello calculates that a couple with two kids on $60,000 repaying about $2000 a month on the $300,000 they borrowed to buy an average-priced unit in Sydney – don't even think about a house – are part of the super rich.

Think again, Mr Howard, because high tax rates meant for the better-off are hitting ordinary Australians – close to 1 million in fact – whose income levels are catapulting them into the 47c-in-the-dollar range (48.5c when the Medicare levy is factored in). And the debate about whether they're just whingers because they can't afford to upgrade to a plasma TV will soon become irrelevant. If tax cuts are promised ahead of the next election, they won't appear in our pay packets until 2005, by which time the top rate will begin to kick in just above average weekly earnings.

Under a supposedly free enterprise government, the tax burden has reached record highs. Is it any wonder that high tax rates are sapping the motivation to work hard, and driving increasing numbers of Australians overseas? Look at the US, where the top tax rate of 39.6 per cent applies to incomes of around $500,000 and above to find out why. The Australian's reporting on The Working Rich and our diaspora speak volumes about the tax trap. Who'd think Australia could ever be the source of "economic refugees" escaping to less-taxed and more lucrative shores, where extra work is rewarded rather then poured down the tax drain?

The loser, of course, is Australia. High tax rates that cut in at low thresholds force many highly skilled expats, who have been working at the cutting edge of the new economy, to think twice about returning. And when it comes to attract ing skilled workers from overseas, there's only so much that Australia's climate, environment and relative security can offset against uncompetitive salary packages.

High tax rates and mortgage repayments mean few families can afford to keep one parent at home, even when they fall into the $60,000-plus bracket. While the Government builds a $2.1 billion surplus from bracket creep, the GST and hidden taxes, Australians are accumulating record personal debt. When are our politicians going to stop penalising ordinary Australians who better themselves?

taxes paid here for average brit migrants are a huge issue which dont get enough attention. everyone believes the ozzie bullshit of sun sand and beaches.

no one mentions the awful working conditions, minimal paid holiday, old fashioned old boy management etc etc plus whats worse the sun dont shine that much and when it does your looking out your office window at the start of another 60 hour week !

then there is the tax rates. as pb says. nearly every pom that comes here will pay the maximum tax rate. if your skilled educated and employed you will end up paying the max tax rate as it kicks in at such a low rate. when the ozzies introduced the gst 10% they reduced taxes for the poor ozzies but any rich bastard i.e. those earning more than STG £20k p.a. i.e. the idol rich (not) still have to pay the full whack.

whenever anybody trys to raise this issue on the forum in the past you get all the xenophobic ozzies shouting blue murder quoting oecd average stats at you which are useless. Average incomes in Oz are at least 30% below UK average incomes and yet Brits despite labour govt are paying virtually the same proportion of taxes on their 30% higher salaries than the ozzies. Thats with 17.5% vat, petrol taxes etc etc. If you did a direct comparison of what an ozzie would pay if they were earning UK average salary the proportion would be much much higher !

On top of that your average skilled Brit migrant will earn far in excess of average incomes here. so if you move here be prepared to be taxed until you squeak.

the other issue is the unemployment rate. in oz they are patting themselves on the back for getting their unemployment rate down to 6.1%. if thats not bad enough nearly all the jobs created over the past few years have been part time whilst full time employment has been level / dropped. Compare this to UK, national unemployment rate 3.1% basically full employment. In US they are shitting themselves over a 6.1% unemployment rate but in good old Oz its a national achievement to be proud of.

My advice, dont listen to ozzie bullshit. Dont move here for the prospects. This is basically a poor country with an economy linked to rural and commodity exports. Unfortunately for the ozzies other third world countries seem to understand their own plight and therefore blow the ozzies out of the water when it comes to competitiveness. When the Barmy Army were in town the other week one of the chants was "three dollars to the pound, three dollars to the pound". The reason is as explained, poor country, basic rural economy, high taxes so low value currency. Expect this to continue to move lower as well until the ozzies get their heads out of their arses and do something about it which given the vacuum they all live in aint going to happen anytime soon !!!

Hello captain.

I agree that taxes are a concern, but the headline top rate of 48.5% isn't the end of the story.

The tax deduction industry is a major player in Australia, and many get involved in questionable investments all in the name of obtaining a tax deduction and tax relief at the highest rate. In fact I have heard mentioned the fact that in the absence of the availability of tax deductions the top rate of tax would be nearer 40 to 42%.

"Bracket creep" is the other issue that is rising up the political agenda - the fact that the income thresholds at which the higher rates of tax bite isn't indexed, and as a result more taxpayers are paying the higher rates of tax as their salaries increase year on year. Only the other day I read that in a couple of years the higher rate of tax will kick in at about 120% of average earnings, which as you say are already low by UK standards.

Other taxes are also quite vicious in the way that they affect incoming migrants, particularly those from the UK.

However, one saving grace for many is that the need to work is lessened if a fair amount of equity is used to buy a property. I dare say that although the taxes are lower in the UK, for many in the UK planning to move to Australia the stresses and strains of the daily grind just to pay the mortgage and to make ends meet makes tax seem less important ... it's also more about a desire to improve one's life in less material ways and (for many) the future of the intending migrant's children.

I think the current Federal Government also recognises that tax in Australia is high by international standards, but it bends with the political wind, and wouldn't cut the top rate of tax or increase the income level at which the top rate of tax bites for fear of being accused of favouring the rich. Too much short term political expediency and not enough vision ...

Best regards.