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Resident/Non resident Rates

Resident/Non resident Rates

Old Nov 23rd 2001, 3:52 pm
  #1  
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leeta is an unknown quantity at this point
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With regards to the tax situation in Australia, if Perm Res is granted via a Skilled Migration Application, does one become a Resident for tax purposes immediately on entry into Australia or after a specified time period. I understand the tax rates are rather different and that a 'living away from home allowance' can be granted for Non-Residents. Does anyone have a better idea of this or where I can be diverted to investigate further.

Thanks
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Old Nov 24th 2001, 12:07 am
  #2  
Alan Collett
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Hi Leeta.

Generally speaking if you arrive in Australia on a permanent residency visa to live
you are deemed to be a tax resident from the day that you arrive in Australia.
However, you do not usually become a tax resident of Australia if you arrive on a
holiday to validate your visa.

You can read more about the tax situation at:
http://www.collettandco.com/aussie_individuals.html

And our free factsheets are at: http://www.collettandco.com/factsheet.html

Information about the Living Away From Home Allowance is at:
http://www.collettandco.com/factsheet.html

There is also information on residency on the Australian Taxation Office's website
at: http://www.ato.gov.au/content.asp?do...uals/12503.htm

Contact me directly if you would like to discuss your situation - hope this helps.

Alan Collett alan-at-collettandco-dot-com Registered Migration Agent Number 0102534,
Fellow of the Institute of Chartered Accountants in England & Wales, and Member of
the Migration Institute of Australia, Number 1230 Collett & Co Chartered Accountants
W www.collettandco.com Enterprise House, Ocean Village, Southampton, Hampshire,
England, SO14 3XB, T +44 (0)2380 488786 Also at 5/11 Queens Road, Melbourne, VIC
3004, Australia, T +61 3 8530 7030, through www.gomatilda.com

leeta With regards to the tax situation in Australia, if Perm Res is granted via a
Skilled Migration Application, does one become a Resident for tax purposes
immediately on entry into Australia or after a specified time period. I understand
the tax rates are rather different and that a 'living away from home allowance' can
be granted for Non-Residents. Does anyone have a better idea of this or where I can
be diverted to investigate further.

Thanks

--
 
Old Nov 25th 2001, 3:16 am
  #3  
George O'Neill
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leeta <[email protected]>
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Leeta, I moved to Oz for 6 months and then left and have not been back for 3 years.
In the intervening time I have money in Ozzy bank accounts which have accrued
interest. I pay a flat rate of 10% tax on the interest. This will change when I
become a resident again on June/July next year. Then the interest will be taken into
consideration as part of my normal personal tax allowances.

An interesting question, one I have posted here before, is what happens if my
family stay in Oz and I come back to the Middle East to earn big bucks tax-free ?
The fact that my family are living, working , attending school in Oz probably
means that my "tax free" salary in the Middle East will probably be taxable under
Australian tax rates. I have written to various people for an answer to this but
so far only nebulous crap has come back. I suspect that I would end up paying 48%
tax on my income. This is sad as I intend to spend all of my earnings in Oz,
instead I will take a much less well-paid job in Oz and actually pay less into the
Australian economy.

George
 
Old Nov 25th 2001, 4:15 am
  #4  
Alan Collett
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Posts: n/a
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George,

I dare say that the reason why you haven't had a definitive answer about your tax
status is because there isn't a clear cut answer to your question - tax residency can
be a very grey area, being mainly based on case law with conflicting decisions. In
your case the fact that your family are in Australia might cause you to be tax
resident in Australia - but not necessarily so. If you reasonably consider yourself
to be non-tax resident in Australia note down your reasons on file and self assess
yourself as such. And if you want certainty as to where you stand vis a vis Aussie
tax residency present the facts to the ATO and seek a Private Ruling.

You are right though about the rates of tax in Australia being higher (on the face of
it) when you compare rates of direct tax internationally. But most people don't come
to Australia because of its status as a tax haven - and I dare say the Federal
Government knows it, although in the longer term I feel sure someone in power has to
see that Australia loses a fair number of ambitious people because of lower rates of
direct tax elsewhere in the world.

Regards.

Alan C www.collettandco.com

George O'Neill
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Leeta, I moved to Oz for 6 months and then left and have not been back for 3 years.
In the intervening time I have money in Ozzy bank accounts which have accrued
interest. I pay a flat rate of 10% tax on the interest. This will change when I
become a resident again on June/July next year. Then the interest will be taken into
consideration as part of my normal personal tax allowances.

An interesting question, one I have posted here before, is what happens if my
family stay in Oz and I come back to the Middle East to earn big bucks tax-free ?
The fact that my family are living, working , attending school in Oz probably
means that my "tax free" salary in the Middle East will probably be taxable under
Australian tax rates. I have written to various people for an answer to this but
so far only nebulous crap has come back. I suspect that I would end up paying 48%
tax on my income. This is sad as I intend to spend all of my earnings in Oz,
instead I will take a much less well-paid job in Oz and actually pay less into the
Australian economy.

George
 

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