Simplified Guide To Lodge Expat Tax Return In Australia

Expat tax return
Expat tax return

Are you moving to Australia as an Australian citizen and want to take up a job there? If yes, you should be well aware of the expat tax rules in Australia, which will be equally important as finding a new home. Native Australians are classified as residents for tax purposes, and thus, your tax obligations may differ from them as you will be classified as a non-resident here. 

For professional guidance regarding expat tax in Australia, you can ask any top-rated Expat tax accountant. However, reading this write-up may help you understand the thing much better. Here we have covered all the key points regarding the subject.

What Will Be Your Tax Residency Status?

When you move to Australia as a citizen, you can fall under one of these three categories of tax residency status.

  • Australian Resident for tax purposes

Suppose you are classified as an Australian resident for tax purposes. In that case, you will have to declare all the income earned in Australia and overseas in the Australian tax return that you need to lodge annually. The condition will apply even if the tax is already paid overseas. In that case, you can use a foreign income tax offset to minimize Australian tax on the income earned overseas.

  • Foreign Resident for tax purposes

Suppose you are classified as a foreign resident for tax purposes (also called a non-resident for tax purposes). In that case, you will have to declare every possible income earned in Australia in your annual tax return. This income will include employment income, rental income, income from Australian annuity or pension, and capital gains on the Australian taxable property. 

  • Temporary Resident 

Now, what to do if neither you nor your spouse is permanent residents of Australia or Australian citizens and you hold a temporary Australia visa? In that case, you will be considered a temporary resident, and you will only need to include the income earned in Australia in the tax return. However, if there is any income, which has been earned overseas during your stay in Australia, you should also declare that.

Australian Expat Tax Rules

When you are moving to Australia, you should also know the specific Australian Expat Tax Rules. It will help you get an idea of the financial impact you may experience after moving to a foreign country. One of the major differences between a non-resident and a resident Australian is income tax rates. Income tax rates apply to any earned income that the Australian Taxation Office assesses.

In the financial year 2019-20, the income tax rates for taxable income bands $0-90000, $90001-180000, and $180000+, were 32.5%, 37%, and 45%, respectively. 

As a non-resident expat, you will not be required to pay the Medicare levy. Medicare is the national health scheme of Australia, which covers substantial medical costs of Australian permanent residents and Australian citizens.

Financial Planning for Expats

If you want to manage your own finances, it is always better to get expert financial advice. And on the same note, while moving overseas, you have to get proper Australian expat financial planning. There are top-rated financial consultancies based here, giving excellent financial planning ideas to their clients specific to their expat situations.

An expat can very easily get caught up in the typical Australian lifestyle. From booking domestic help to taking more leaves from the job to buying a better house to live in, money can be spent on multiple occasions. Sometimes, you may discover that you are left with neither any extra disposable income nor anything palpable to show for it.

This is why we always advise getting top-quality expat financial planning from an experienced tax accountant Perth. It will make your finances more organized, and you can learn how to deal with various expat tax matters. Above all, it will help you move towards a more stable financial future. 

For convenience, it will be good to keep updated about events where you get good opportunities to get these financial plans.

Benefits of Expat Wealth Management

While being in Australia as an expatriate, you can enjoy several benefits of a planned expat investment. These are as follows.

  • Tax-Free Income

If you qualify as an Australian non-resident for tax purposes, you will be able to purchase shares and get the benefit of a fully franked dividend. A franking credit is attached to this dividend, which can offset the withholding tax. This offset may result in an income free of tax.

  • No Capital Gains Tax

As a non-tax Australian resident, you are open to buying and selling shares if you invest in shares listed on the Australian market. You do not need to pay the Capital Gains Tax (CGT) to the ATO during the period you remain as a non-resident for tax purposes.

  • Compliance

Because of the control measures and compliance, the Australian financial markets are beneficial for international investors.

Can An Expat Claim Personal Superannuation Contributions As A Tax Deduction?

For an Australian resident and a non-resident, the superannuation laws are the same. If an expat in Australia satisfies the Superannuation Industry (Supervision) Act contribution rules, a super fund trustee can receive contributions from an Australian non-resident. 

Claiming the personal superannuation contributions as a tax deduction for an Australian expat is possible, subject to eligibility. A primary requirement is that the member earns under 10% of their total income from the eligible employment in the year they have contributed. 

For an Australian expat, their income from employment outside Australia is neither assessed nor counted in the 10% calculations. Thus, an Australian non-resident with an income sourced in Australia, such as income from a rental property, can claim a tax deduction on their personal superannuation contributions. Depending on the type of property investment you can claim your tax deductions.

Who Can Help You?

Wondering where to go for advice? Well, several financial firms have been providing detailed guidance to their clients. But, everything will depend on the goals you have regarding your investment planning.