northernbird

Husband looks likely to be going and working in KL for a while. He will be paid in AUD and the company in Malaysia will pay his Malaysian tax. Does anyone have any experience of how this will work. The ATO website as usual is vague but reading between the lines he pays the difference between his liability in Malaysia and his liability to the ATO.

Anyone know???

KJCherokee

Unless the relationship between Malaysia and Australia is different to places I've worked (Myanmar, Philippines) as long as he has paid the necessary taxes on his income in Malaysia he won't be liable for any Australian tax.

Loch Lomond

If there is a reciprocal agreement between Malaysia and Aus, he will be liable for the difference between his Malaysian tax and what his earnings would be taxed at in Oz. In the unlikely situation that Malaysian tax is higher than Oz, he won't have a liability to the ATO. If you are resident for tax in Australia, your worldwide income needs to be declared.

KJCherokee

The rules changed in 2008 - before that you didn't pay Australian tax on any income previously taxed overseas regardless of the difference in rates. Trust the government to demand their pound of flesh!

You need to make sure, where possible, that you are working overseas on an approved project listed by Austrade - in that case your overseas income is tax exempt in Australia.

northernbird

Thanks for the input guys, appreciate it.