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Tax Implications of Moving Overseas

Discussion in 'Accounting, Tax & Legal' started by Chris C, 3rd May, 2009.

  1. Chris C

    Chris C Well-Known Member

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    If I move to Singapore after June 31st, I was just wondering what future tax implications would this have given that I have an investment property and some shares in Australia?

    As in am I allowed to keep my investments in Australia whilst living aboard, and what tax implication does this have (ie do I pay Australian tax on income derived from my Australian investments or do I pay Singaporean tax on these investments)?

    Also does anyone know if I'm living in Singapore does that mean I need to shutdown my ABN? What implications does this involve?

    Also the financial year in Singapore runs from April 1st to March 31st, so I was just wondering what implications this has for me paying tax Singapore? As if would I pay taxes in Australian for earnings in July 2008 to June 2009, then next year I'd pay Singaporean tax on earnings from July 2009 forward or, would I need to pay in Singapore from April 2009 forward?

    Also does anyone know what major tax implications there are for coming back into Australia after spending a few years in Singapore?
     
  2. TROM

    TROM Active Member

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    Centric Wealth :: Taxation

    Great question contact the link above they seem to have some information on moving overseas either for working or living.

    I to am wanting information for this also.
     
  3. Rob G.

    Rob G. Well-Known Member

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    Usually no implications for a mere few years spent overseas - things remain the same.

    If you have Australian domicile, you remain a tax resident at all times whilst overseas unless you establish a "permanent place of abode" in the other country.

    You get to pay Australian income tax on your worldwide income, with credits for tax already paid overseas.

    Check out IT 2650.

    Cheers,

    Rob
     
  4. Chris C

    Chris C Well-Known Member

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    Thanks for the link they have some very helpful advice on their website.

    Thanks for the reference.
     
  5. Gonzo

    Gonzo Well-Known Member

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    You wont need to pay tax in Singapore on your Australian investments. If the investments are in your name and you declare non-resident status you might be slugged 10% witholding tax in your cash accounts.

    You can keep it but you must have at least 1 director residing in Australia

    You would be liable for Australian tax on anything your earn in Oz up until you declare non-resident for tax status. Singapore taxation will be based Singapore earnings in the Singapore tax year.

    Just keep filing your tax returns for bank interest and what not and you'll be fine. I am not aware of any need to pay tax in Australia on Singapore based earnings while having non-resident for tax status. I certainly hope that law doesn't change.

    The Singapore Tax rates are certainly a thing of beauty...

    Tax rates for individual residents
    Chargeable annual income bracket Rate
    For the first S$20,000 0%
    S$20,000 - S$30,000 3.5%
    S$30,000 - S$40,000 5.5%
    S$40,000 - S$80,000 8.5%
    S$80,000 - S$160,000 14%
    S$160,000 - S$320,000 17%
    S$320,000 and above 20%
     
  6. Rob G.

    Rob G. Well-Known Member

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    You may be regarded as a tax resident of Singapore merely by being present there long enough.

    That still does not affect you Australian tax residency unless a Double Tax Agreement with that country modifies Australian domestic law.

    Too complex, too many unknowns ... go get advice specific to your circumstances.

    Cheers,

    Rob
     
  7. Gonzo

    Gonzo Well-Known Member

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    Any income earned in Singapore, whilst you hold an employment pass, is taxable in Singapore.

    A simple declaration in Australia stating you are a non-resident for tax purposes will disolve you of tax requirements but the 10% with holding kicks in.

    Singapore and Australia have a tax treaty.
     
  8. Chris C

    Chris C Well-Known Member

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    Thanks for the repies Rob and Gonzo, I really appreciate it.

    Does that director have to receive a share of the business's earning though? As in, if I made one of my family members a director of the business what tax implications would that have for them?

    Can you back date the point in which you declare your non-residence. As in if I was to move to Singapore in July, would I have to declare straight away that I'm no longer a resident for Australian taxation purposes, or would I wait until I'd reside in Singapore for at least 6 months to then declare retrospectively that I'll be a resident of Singapore for taxation purposes in the 2009 year?


    Those are the very rates that I fell in love with...

    :p
     
  9. Gonzo

    Gonzo Well-Known Member

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    My brother is listed as a Director in my company. He owns no shares in the company, does get paid a dividend.

    RE declaring tax status, I believe you can do it anytime. If I remember correctly I timed the declaration to maximise my tax deductions. Check with a decent accountant first I guess. I used Nick.
     
  10. Gonzo

    Gonzo Well-Known Member

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    Things have changed

    OK, this doesn't look good for Aussies working overseas now.......

    If Nick or other accountants are around and have any idea if the implications of this are as bad as what I think they will be for Australians working overseas.

    Press Release - Better Targeting the Income Tax Exemption for Australians Working Overseas [12/05/2009]

     
  11. Rob G.

    Rob G. Well-Known Member

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    Sounds like they want to kill the s.23AG ITAA36 exemption on salary paid to Aussie resident employees who are posted overseas.

    Doesn't affect those overseas who are treated as non-residents of Australia.

    Given the massive exemptions for non-residents to either work or invest here ... this is really not funny.

    Cheers,

    Rob
     
  12. Gonzo

    Gonzo Well-Known Member

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    Thanks for that. So seeing I am declared as non-resident for taxation purposes, I won't be part of their target audience.

    I just hope it's not the first step towards the US method of taxing all residents no matter where they live.
     
  13. onemore

    onemore New Member

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    Non Resident for taxation

    Does becoming a non resident for taxation purposes, and staying out of the country for two years, limit the number of times that you can return to Australia for a visit?
    Thanks
    Mike
     
  14. Chris C

    Chris C Well-Known Member

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    Whilst I think Australia tends to often be a sheep lead by the US and UK I really hope our government would have the backbone to prevent such a ridiculous policy.

    To be completely honest I don't understand why there is a greater exodus from the US... though I do hear it is actually quite hard to renounce your US citizenship then days.
     
  15. Rob G.

    Rob G. Well-Known Member

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    Possibly ...

    Physical presence, family & business ties could indicate you are a Common Law Resident.

    It could undermine your argument that you have a "permanent place of abode" overseas.

    You could be deemed a resident if you are present more than 183 days with no other compelling reason why you should not be treated so.

    It could tip the scales in favour of Australia in any tie-breaker rule of a Double Tax Agreement.

    Australian tax residence is quite "sticky".

    Cheers,

    Rob
     
  16. onemore

    onemore New Member

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    Non Resident for taxation

    Rob,
    Thanks for the info, I am thinking of only returning up to a maximum of 90 days a year so that might keep me off their radar, I will have to seek calrification from the ato on that one though.

    Cheers,
    Mike
     
  17. TROM

    TROM Active Member

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    What happens if you decided to go overseas for a holiday for a couple of years. And you have investments here also and have your PPOR which you decide to rent out for a while.

    Are you still liable for paying tax if you have declared income from investments?