Are you thinking of becoming a non-resident of Australia? Do you have questions about what non residency means for tax purposes? Non-residency and international taxation play a huge role in what we do. At M Squared we provide tax and business solutions primarily for those in the oil and gas industry who need certainty of outcome and want to work with a specialist who will give a bullet proof decision. Therefore, we have compiled a short list of common questions asked by clients who wish to become a non-resident or who might already be but need assistance in declaring it to the ATO.
1. What’s the benefit?
If you’re intending on working overseas and plan on spending very little time, if any, in Australia then why pay Australian taxes? Australia has one of the highest rates of taxation in the modern world so living in another country has benefits come both monetarily and in lifestyle.
2. What do I need to do convince the ATO?
Are you fly-in, fly-out – then forget it. You will almost certainly be a resident of Australia.
The short answer in becoming a non resident is living overseas for an extended period of time and reducing, as much as possible, your financial and social ties with Australia. ATO focus, includes whether you have a home available for you here. It is advantageous if property owned is sold or leased out. Immediate family such as a wife and child still living in Australia will make it incredibly difficult to claim non-residency. However it can be noted that none of these things are definitive. M Squared provides situation specific advice in relation to this matter by assisting you in completing and declaring the acceptable criteria for non-residency to ATO.
3. In the event that the ATO does follow up, what penalties and risks apply?
In the event that the ATO regards you as a resident you will be liable to pay all taxes you should’ve paid over that time period with additional penalties in the event that you’ve been reckless or careless with the preparation of your tax return. Different percentages are charged based on degree of recklessness. This is typically where M Squared can offer assistance as our advice generally proves that you’ve neither been reckless or careless.
International taxation is one of our focuses and we work to ensure our clients are confident and comfortable in their taxation status. We provide clients a sense a certainty about residency, or at the very least a sense of certainty in relation to avoiding additional penalties. Please don’t hesitate to contact us in relation to your financial and taxation needs.