The Aussie Govt is at it too… New tax rules

[DJansen]

Guess this may affect Aussies working offshore overseas but still residing in Oz..

Foreign employment income exemption changes
Currently, Australians working overseas for over 90 consecutive days are eligible for a general exemption which means they do not pay any Australian income tax on their foreign employment income.
From 1 July 2009, the foreign employment income exemption will only be available for income earned:
• as an aid or charitable worker employed by a recognised non-government organisation; or
• as a government aid worker; or
• as a specified government employee (for example, defence and police force personnel deployed overseas).
Income earned by an individual employed on an overseas project approved by the Minister for Trade as being in the national interest will remain exempt.
A tax offset will be available for any foreign tax paid on the foreign employment income.
Source: Budget Papers No 2, p 19; Treasurer’s Press Release No 4, 12 May 2009.

🙁

[Craig Roberts]

the latest info out there for 23AG (current tax rule for overseas derived income) specialist accountants is that it worded that it will only occur after industry consultation, so I cant see it happening in July

[kangaroo]

Yep, they were bound to close this sooner or later. After all, this was really under the double tax treaty scenario – i.e if you work out of Singapore and pay Singapore Tax then you don’t pay tax in Australia or pay at a reduced rate.

They have obviously discovered that not all are paying any tax in Singapore to the Singapore government, so they want to tax you in Australia instead. This probably happened after HSBC Singapore (whom 80%) of Oz workers bank with brought in the new wire transfer rules making it impossible now to transfer money without your full name and address on the wire transfer or passport number.

Even in the UK Sector of the North Sea they make it very hard these days to claim your tax back.

I noticed the US is also clamping down on overseas workers and companies. A US buddy of mine who has worked in the Oil and Gas industry around Asia and lives over here said to me that his US tax return was a nightmare this year.

I guess we all need to just take it on the chin, and band together and fight to have the rates put up to compensate.

Big Brother is upon us!

[Hot Stab]

So has anyone had a chat with there accountants over this issue? Found a way around it?

I had a chat with mine and he basically said I was paying tax. There best thing to do is start investing. Reckons he can get me down to paying 30% tax.

Anyone or know of anyone in the ROV or Oil industry decided its just not worth working oversea’s anymore?
For many of us it was " not paying aussie tax " that just kept us a bit better than those working in Oz. Now that we have to pay tax, is it really worth working overseas?

Hotstab

[T-Boy]

Income earned by an individual employed on an overseas project approved by the Minister for Trade as being in the national interest will remain exempt.

Mmmm pretty sure that oil and gas is in the ‘national interest’ 😯

Sign a petitiion and get it approved by the minister.

[James McLauchlan]

Also under discussion here: HERE

[claire castro]

thanks

simulation rachat de credit

[Christopher Tyson]

Hi Guys,

Just following on from Luckyjim37 reply; http://www.rovworld.com/phpnuke/modules.php?name=Forums&file=viewtopic&t=3321&postdays=0&postorder=asc&start=60

Before I go running to the accountant/solicitor, any sharing of firsthand experience would be gratefully appreciated. Thanks.

Have many of you Aussie residents working & paying tax in Oz managed to set up any type of company or trust to minimize taxes paid from ROV offshore work?

Is there any hassle with having your salaries / day rate from the local companies paid directly into this type of arrangement, or does the agreement/contract with the employer need to have your personal name particulars on it rather than your company’s?

If I were paid as a company, would I have to ‘pre-pay’ the tax each year?

Also, could someone please recommend a reputable Aussie tax accountant with experience with offshore workers to set up any legal type tax minimization program if that’s possible / practical and dependant on the above questions?

Thanks,
Red

[baglimit]

oz govt releases their budget tonight oz time, and if you follow on from other debt laden countries, expect all manner of changes to what, how & levels of tax from all of us connected to oz – whether the changes are sweeping, who knows, depends on how much they promise in handouts – its an election year afterall.

[baglimit]

of interest is not the target, but how the ATO have interpreted the resident for tax purposes rule. in general the advice hogan originally got was probably correct, but it will now all depend on what assets/connections hogan had in australia when he received the income.

similiar in some respects to how others here have described the UK taxmans endeavours.

http://www.theaustralian.com.au/news/nation/hogan-hit-for-millions-as-ato-demands-its-take/story-e6frg6nf-1225905117507

Hogan hit for millions as ATO demands its take

EXCLUSIVE: Susannah Moran From: The Australian August 14, 2010 12:00AM Increase Text Size Decrease Text Size Print Email Share Add to Digg Add to del.icio.us Add to Facebook Add to Kwoff Add to Myspace Add to Newsvine What are these? ACTOR Paul Hogan has been hit with a multi-million-dollar tax bill.

The Australian Taxation Office has accused the entertainer of evading tax on $37.6 million of undeclared income.

The tax office has also told Hogan it considers him an Australian for tax purposes, despite the Crocodile Dundee star living and paying taxes in the US for a number of years.

The tax bill is the first punitive action taken against Hogan by the tax office, which along with the Australian Crime Commission has been pursuing the actor as part of a tax probe into the use of offshore accounts connected to the Wickenby investigation.

The size of the bill is not known. But if Hogan is assessed at the highest marginal rate of 40 per cent, the tax office is likely to have demanded a base payment of $15m, as well as interest charges from the date the tax was due, and additional penalties that could be as high as 75 per cent of the base bill.

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According to documents obtained by The Weekend Australian, the tax office has told Hogan it is considering him an Australian resident for tax purposes for the years 1987 to 2005. During eight of those years — from 1995 to 2002 — Hogan paid tax in the US, where he now permanently resides. From 2002 to 2005, Hogan lived in Australia.

Three payments are singled out as income that should have been declared to the tax office. The first is a $9.1m payment in July 2002, made at a time when Hogan had stopped being an Australian for tax purposes but had yet to take up US residency.

The tax office says Hogan did not pay tax in either country on this income. The reason for the payment is disputed, with some accounts saying it was for the film rights to the never-made Crocodile Dundee 4 and others for the rights to use Hogan’s likeness for commercial reasons.

The second payment was a dividend of $14.3m paid to Hogan in the same month. The third payment — also likely to have been from film royalties — was a $14.1m dividend paid to Hogan in June 2005, after he had again left Australia.

Tax advice given to Hogan by accounting firm Ernst &Young told the actor he would not have to declare the dividend if it was paid after he had left the country. But the tax office has told Hogan it considers him an Australian resident for the month and is demanding tax be paid.

Hogan’s artistic collaborator John Cornell and the pair’s financial adviser Tony Stewart have been accused in the Federal Court of lodging tax returns that contain "false and misleading statements". The ACC alleges the statements were made to avoid their tax obligations and to "evade paying income tax in Australia."

No tax-related charges have been laid against Hogan, Cornell or Mr Stewart, and all have denied any wrongdoing in relation to their tax affairs.

A lawyer for the Australian Crime Commission has previously told the court it is close to finalising its investigation, which is separate to the tax office’s actions. The ACC will then decide whether to recommend criminal charges against Hogan, Cornell and Mr Stewart.

[Author]

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