RenShen

We have received a job offer on a 457 basis and are now completing all the forms to accept the offer. We have been sent a form asking for our TFN number and it looks as though we won't be able to apply for this until our arrival. Can anyone confirm that this is correct?

Also, I have been reading the rules around tax residency and it states: "We consider you to be an Australian resident for tax purposes if you will be or have been in Australia for more than half of 2008-09." As we won't be arriving in Australia until the end of January 2009 we will spend less than half of 2008-09 in Australia, though we will be staying for the full following year with a view to getting PR.

Is it correct that any migrants arriving in Australia in the second half of 2008-09 will be treated as non resident for tax purposes, so not be allowed the tax free threshold and will be taxed at the higher, non resident rates?

Any help gratefully received. I would have thought I would have come across this on the forum before now if it was correct so I am hoping that somebody will have good news for me.

Cheers,
Ren

goldchoccycoin

When it comes time for tax time - you can to the residency questionnaire on the www.ato.gov.au tax website.

You will be a 'resident for tax purposes' without a doubt. You will be eligible for the tax free threshold etc. I don't have a refernec for this except the experiences of 4 people in my department who are on 457 visas.

You can't get your TFN til you get here but your employer won't have a problem - just give it to them when you can.

mandyp

You may well be on the non-residents tax initially which is 29%!! You will be able to claim this back though at the end of the financial year, just try to get off it ASAP, follow the ATO link.

Cheers
Mandy

RenShen

Thank you for the replies. I must admit I am a bit surprised at other people migrating from the end of January onwards not flagging this up!

goldchoccycoin

That's because when you 'live' here (work, rent a house, shop etc) it means you are resident for tax purposes - have a look at the type of questions that are asked in the residency questionnaire

http://calculators.ato.gov.au/script...dent.XR4&go=ok

Most people don't worry about it beacuse their employers are familiar and will only tax them at the lower rate.

mandyp

Hubby and I were both put on non-residents tax initially. I had just assumed it was a bit like emergency tax and would 'get sorted' after a couple of months. Hubbie changed jobs after a few months and his new employer just put him on the lower rate automatically. After 5 months i re-read the ATO stuff (I thought you had to be in the country for 6 months to get it changed) and saw that as long as you are living here (as tking says) you are classed as a resident for tax purposes.

We are over on a student visa, and because hubbie is on a 2 year course we could have done the tax thing straight away. Not to worry though as we got most of the tax paid back in July which was quite nice!!

Cheers
Mandy

Geelong Gent

You will be resident for tax on arrival on the basis that you intend to stay greater than 182 days (in the next 365 days - so week long stints too thailand or NZ are irrelevant).

It is not a big problem getting a tax file number on arrival (one of the questions is the flight you arrived on). They say it takes 28 days but depending on demand it can be between 3 and 10 days if your lucky.

Treatment as non resident should only apply where you have preliminary set up bank accounts or bought a house etc but have not yet arrived or have left on a permanent basis.

Special tax rates for students only apply based on anticipated assessable income not anything special relating to their visa class (just in case some people were thinking this). All individuals are assessed on the same basis except on what makes up assessable income (worldwide or australian only income - ie on my worldwide income is exempt but Australian is assessable)
Assessable is the term for what income becomes subject to tax.

UK tax year = April 5 to April 6 (so long ago now please correct me if it was March not April)
Oz tax year = July 1 to June 30
NZ tax year = April 1 to March 31

PAYG (pay as you go) seems different here compared to PAYE (pay as you earn) given the following:
In the UK if you move from employer to employer you take a P45 and each pay period reassesses your tax liability so overpayments are generally corrected during the year. Whereas in Oz there does not appear anything similar so if you move employer other than declaring its your main principal place of work you have to await the end of the tax year too claim any over payments.

pumpkin blossom

I don't remember it asking what flight I arrived on! Maybe that has changed since the beginning of this year, as where I applied for mine (school library) I would not have had that info on me.

When you fill in your tax form for a new employer there is a box which says you have applied for your tax file number, so you get so many weeks to send it in before they start taxing you at the higher rate.

RenShen

Thank you all so much for your replies. You have been really helpful.

Head is about to burst as I have been scanning and printing forms for the visa and job all day. We have got to get a load of stuff certified tomorrow and then send it all off.

I must admit its a relief to know we are not going to be taxed at the higher rate on arrival.

Thanks again,

Ren xx

meols12

[QUOTE=tking;7073672]
You will be a 'resident for tax purposes' without a doubt. You will be eligible for the tax free threshold etc.

Don't forget that the tax-free threshold will be pro-rated for tax year 2008/09 when the OP becomes a resident in January. The tax-free threshold for a month is $500, ie.$6,000/12. RenShen will be entitled to a threshold of $3,000, ie.6 months x $500 per month.

In addition, when adjusting a tax-free threshold, the extra income that RenShen has to pay tax on will be taxed at 15%. Therefore tax payable on whatever your taxable income will be, plus $450 ($3,000 x 15%).

IndieG

Just a quick question - if someone arrives to live permanently in Australia, say on 1 Feb 2009, then would he be liable to pay income tax on the salary earned during the period Jul 1 2008 until Jan 31, 2009? Or would he pay tax only on the income he earns from the time he arrives as a permanent resident?

Thanks!

louie

Income earned outside Australia? No, that wouldn't be taxed in Australia as it was earned prior to becoming resident.

IndieG

I tried looking for it on their website, but couldn't find any reference. Would you be able to provide any links? Thanks once again!

Alan Collett

And don't forget that as the holder of a temporary residency visa you can avail yourself of the special temporary resident provisions in Australia.

Best regards.

Pollyana

When you fill in your first tax return it asks for the date on which you became a tax resident in Aus. It then asks for the income that you have earned sinee the date on which you became a tax resident.