Navigating The Australian Taxation System: A Comprehensive Guide for Expats
Navigating The Australian Taxation System: A Comprehensive Guide for Expats
Looking to move to Australia? Have you read the Australian Tax Obligations for Expats? Well, when you move to Australia, you have to follow the country’s tax rules. But don’t worry, we have tried to make it easy. When you move to Australia as an Expat, you have to comply with certain tax laws, and failing to which can land you in trouble. In this blog post, you will get to know a brief about how you can navigate the Australian Taxation System which is a guide specially curated for Expats.
Types of Taxes in Australia
In Australia, you might see various types of taxes applicable to both residents and non-residents. Following are a few of the common ones.
Income Tax | This tax is incurred on the income you make. This includes salary, wages, and investment income. |
Capital Gains Tax (CGT) | This tax is applied to the capital gains you make when you dispose of an asset such as your property, shares, and other investments. |
Goods and Services Tax (GST) | This tax is a value-added tax of 10% on most goods and services. |
Fringe Benefits Tax (FBT) | The non-cash perks that a company gives to an employee are subject to this tax. It is paid by the employer. |
Superannuation | Employers are required to make this payment to a retirement fund. |
Can Australian Expats Really Get Tax Benefits?
As long as you remain a tax resident after moving overseas, you have to pay tax in Australia on your worldwide income. Along with this, it also depends on individual circumstances and the tax laws of both Australia and their country of residence. But hang on, there is a tax benefit that Australian Expats can get.
Double Taxation Agreements (DTAs)
Australia has signed the DTAs with over 45 countries to avoid double taxation on income. Through this, an Australian Expat who pays taxes on their income in their country of residence can claim a foreign tax credit or tax offset in Australia for the tax paid overseas.
Tax Rates
Your income and tax residence status determines how much tax you owe in Australia. As of the 2022-23 financial year, the tax rates for residents are:
Taxable income | Tax on this income |
0 – $18,200 | Nil |
$18,201 – $45,000 | 19 cents for each $1 over $18,200 |
$45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
$120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
$180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
Tax Residency
The ATO conducts 4 types of tests in order to determine your tax residency status. You have to pass anyone among those to be considered an Australian resident for tax purposes. They are:
- Resides Test
- Domicile Test
- 183-Day Test
- Commonwealth superannuation
Conclusion
As an Australian Expat, it becomes critical to understand the Australian Tax system. You need to consider tax residency status, and tax rates along with the tax obligations. If you find difficulty in dealing with them, you can rely on KPG Taxation is offers top-notch advice on taxation. It has expert tax accountants that can help Australian Expats deal with their taxation burden.
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