When you are earning foreign income (from overseas) and are an Australian resident, you need to declare this on your Australian tax return. While the ATO will be able to help you to determine if you qualify as an AU resident for tax purposes, we have compiled a range of information to help you get to grips with your tax requirements.
You will need to declare all relevant income that was earned, either from working overseas or by providing services remotely to an organisation outside of Australia, just as you would if it were earned nationally. This may include any wages or salary earned, consultancy fees, business income, director's fees and more.
There may be circumstances where foreign salary could be exempt from AU taxation however, so be sure to check with us.
Overseas assets and investments should also be considered as if they were in Australia when it comes to tax – and therefore all relevant returns should be declared at the end of each tax year. Interest from overseas bank deposits or bonds, royalties from intellectual property, rental income from real estate, dividends from shares and even pensions, annuities and lump sums from managed funds (as well as certain foreign government pensions) can all be eligible for AU tax.
While this may be a complex section of taxation law, capital gains and overseas assets should not be overlooked. There are likely to be a range of exemptions, but in general you should be aware that selling an asset that you own overseas could mean that you need to pay tax on the amount received. Be sure to keep clear and concise records of the original and ongoing value of the asset, as well as any applicable transactions (such as details of sale).
There are likely to be instances where you will have paid tax in the country where the income was derived, but that doesn't mean that you will be exempt from payment in Australia. Instead, you may be eligible for foreign income tax offset credit.
Lindale Insurances Pty Ltd ATF Lindale Insurances Trust ABN 27 027 421 832 is a Corporate Authorised Representative of Millennium 3 Financial Services Pty Ltd, 347 Kent Street, Sydney NSW 2000. AFSL 244252 ABN 61 094 529 987.
Click here to view our Financial Services Guide. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement.
© 2018 Roy A. McDonald, Lindale Insurances Pty Ltd All Rights Reserved.
Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of Millennium3. They cannot be reproduced in any form without the express written consent of the author.