I operate a small services business (a Pty Ltd) and the business is about to start doing a lot of work for one client in Asia (3 to 4 months per year). In the past I've just included the income from overseas clients in my Pty Ltd business tax return in Australia (no foreign tax paid). But I'm wondering if I pay tax in the Asian country as an employee (ie. join the foreign company payroll rather than have my Pty Ltd invoice them) and then leave the income out of my Australian tax return. Any advice? Thanks.
Assuming you remain an Australian resident for tax purposes ... You still declare your foreign source income here, but you get a credit for tax already paid overseas. Cheers, Rob
Exempt if otherwise taxed? Thanks for the rapid reply. I seemed to recall something about income that has already been taxed overseas as being exempt in Australia. If not, then it sounds like there's no benefit to being taxed O/S. Is this right?
There was a salary and FBT exemption for employees posted overseas for a continuous period of more than 90 days. Kev's 2009 budget will kill that one from July unless you are a foreign aid worker or certain Government employees. Cheers, Rob
Interesting exception to the rule here... Have you also noticed that they have reduced the concessional super limits for everyone...except for senior public servants (i.e. Government ministers).
How rude... Maybe all the super funds (industry, retail, corporate, public offer) should complain to the IFSA, FPA, APRA and ASIC as it seems very hypocritical...
