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Found 659 results

  1. Guest

    Australian income tax

    Hi all. I'm thinking of a move to Australia. I'm a diesel fitter. I'm looking into jobs in the mines. I hear of salaries of 100k-170k per year. I'm single, has anyone any idea of how much tax I would have to pay if I was on $100k per year?
  2. Could someone please advise where possible, how my employer would be able to pay me in Australia. I work for a UK company but I will be going out to Australia soon on a 457 visa. The company will pay me from their UK bank account monthly into my Australian bank account and want to be able to deduct Oz tax from my salary. This will happen until they generate revenue in Australia and subsequently set up an Australian Company. What do they need to do for this? Please advise if you need more info Thanks in advance
  3. Hi all Can anyone help with advice regarding the following scenario? Subclass 457 Visa, Overseas company sponsoring an overseas employee. Basically this means a UK Company is sending one of their employees over to Australia to work. Visa is approved. Employee is residing in Australia Uk Company pays salary to employee. Do they deduct tax first and if so, do they deduct UK tax or Aussie tax? If Aussie tax, how do they do this? :confused: Have spoken to Australian Tax Office but no answer from them yet. Many thanks
  4. Guest

    Hi new in Aus Tax

    Hi can someone please tell me how i can apply for a tax number for my husband. Also as i am a non working housewife do I also need a tax number? please advise, sorry if this is a repetative question, we have looked on line and asked questions but the replies we get keep on referring us back to the same website. :embarrassed:
  5. I know, this has raised its head in various forms on here before, mostly for PRs. So... we are moving to Oz at the beginning of Dec on a 457 visa. I understand we are classed as "resident for tax purposes" in Oz. Does this mean we have to declare our UK rental income (from our house) in Oz? Also, what about the UK - will we be liable for tax there (though we will be below the personal tax allowance rate of £7475)? Help gratefully appreciated.....
  6. mark roberts

    tax breaks

    I have a military pension being paid into my UK account, which is being taxed at 20%, I have been told that I shouldn't be paying tax in both countries. However if I notify the Australian tax authorities of my UK income,(which I have to do to claim my tax back in the UK) does that mean that they will then add that sum to my taxable income here, and then tax me on the full amount, if so I may as well keep my mouth shut and just pay the 20% in the UK. Am I wrong, any advice anyone.
  7. Can anyone help pleae? I have been an Australian citizen for some years. I recently inherited a house with my sister in the UK which has been rented since last year. When completing my Oz tax return I declared the income and have paid tax on it. I recently received a letter from the UK tax authorities stating that I was required to complete a UK tax return. As this seems a bit daft as the only income I have in the UK is a paltry sum from the rental of the house, is there a form I can send them from the Oz tax authorities to show tax has apready been paid here?
  8. Guest

    TFN (tax file number)

    Hi I am travelling to Australia on my partner visa (subclass 309) in 4 weeks and i was wondering, i have a TFN from when i travelled to Australia on a working visa back in 2008, is this still valid or will i have to re-apply for a new one? Any help would be great :biggrin:
  9. Guest

    Tax File Number

    Hi We are led to believe that you carnt apply for your TFN until you are in Australia [Perth] and this can take up to 28 days to receive your Number to enable you to be paid from your employer. Does anyone know if there is anything stopping us Working prior to receiving Our TFN numbers. And then receiving our salarys?
  10. ok, I know we've done carbon tax to death and I am a non-believer, but that aside, it's going ahead now so I think we need to understand how it's all going to work. The punch line is that "we're going to tax the big polluters". Sounds good, but what's the nitty gritty of it, how is it going to help to reduce CO2 emissions? Taxing the big polluters - who are they? I'm guessing something like coal power stations or large factories or processing plants. So will taxing them on CO2 make them change their ways and start using solar panels and wind farms? Will they actually be hurt by the tax, act morally and make these changes or just pass on the additional costs to us and continue as normal? If they are taxed, doesn't that give them even less money to use for investing in greener solutions? Who is monitoring the big polluters and making sure they invest their money in green schemes, reduce their emissions and don't just pass on the cost to us? How about the big polutters who are getting off without paying because they bring in too much money for the country (steel industry?). Who are they and how high up on the polluters list are they? In fact, is there a list of companies/industries with emissions on there? What are the government forcast models based on? All these taxed companies being morally just and doing the right thing? Is that what the government is also using to forecast the average Joe public being better off? What are all the taxes raised from this going to do? Will the money be ring fenced only for spending on green projects? Will we see this, will it be transparent to us? Or will it go on other frivolous items? What is carbon emissions trading? I've seen it mentioned that 80% or so of our emissions savings will be through emissions trading? How does that work? Are we really reducing emissions or trading the emissions not reduced by paying for them (with the tax raised through taxing emissions)? As Australia has low emissions compared to a lot of other more densly populated countries and our emissions reductions are going to have a small effect, is the hope that other countries will follow suite and have much high carbon taxes in the future? As the effect of the emissions reduction could be immeasurable and we're relying on the tax being the right thing to do and better than nothing, who's looking at whether the right things are being done ie. green projects are going ahead and taking the place of high emissions energy production/usage? I'm hoping that someone with a lot better understanding of the scheme than I do can explain how it's all going to work please. The TV ads, brochures, radio broadcasts the govenment have been great to give me a high level overview of this great scheme, but the engineer in me wants to know how it's actually going to work!! I know there are many supporters out there, so hopefully plenty of explanations of the scheme too.
  11. Apologise if this has been covered elsewhere in the site. I am about to do my final UK tax return and first Australian one. I am renting out my UK house (rent not covering the mortgage), but need to know which tax return I declare this. Hope someone can help, or give me a link to another discussion.
  12. http://www.gmtax.com.au/wp-content/plugins/download-monitor/download.php?id=2 Hopefully of interest to some. Best regards.
  13. derham

    Car Import Tax

    Has anyone any experience of shipping their car to oz and was the import tax excessive? Also need info on the actual transport costs if possible. I am unsure if it would actually be worthwile taking our car or buy when we get there?:confused:
  14. Guest

    Amount of tax

    Hi, I'm just trying to figure out how much I would be bringing home each month. I will be moving to Sydney in Feb 2012. Would I be classed as a foreign resident? ..... If so, the website says: FOREIGN RESIDENTS Taxable income Tax on this income 0 - $37,000 - 29c for each $1 $37,001 - $80,000 -$10,730 plus 30c for each $1 over $37,000 Whereas the normal rates for Aussies are: 0 - $6,000 -Nil $6,001 - $37,000 - 15c for each $1 over $6,000 $37,001 - $80,000 -$4,650 plus 30c for each $1 over $37,000 I want to know how much I would be taking home on a salary of 50k. Would anyone like to do the maths for me please ? :unsure: Cheers stereo
  15. Guest

    tax question

    This might be obvious but its confusing me..... I migrated to Australia permanently on a partner visa in feb, my partner returned to australia after living in the uk for a number of years. We are completing the tax return for the first time. Am I right in thinking that the ATO is only interested in income/capital gains from the time that I became a tax resident (feb), and from the date my partner returned to australia to retake residency Any income earned in the UK previously (and already taxed over there) is excluded? Would appreciate any advice Ed
  16. Dear Everybody, I hope everything goes fine to you. I am Mario and I ma writing from Italy. I won an ANU University position (Research fellow) for 2 years and the superannuable salary per annum is $85,733 + 17% of Supetannuation. I got a 457 Visa and I have a de facto relationship (she also got the 457 VISA). I have a question on my 457 VISA status and also some questions regarding Australian taxation, Superannuation, RHCA (Reciprocal Health Care Agreements) and LAFHA (Living Away From Home Allowance). 1) 457 VISA Health Insurance My and Lucia' 457 VISA has been granted from 31 August 2011 and it will be valid for 2 years. Since for some problems we are still in Italy and we will be in Australia at the end of the year, I would stop to pay our Private Insurance. I read on the DIAC web site on this link (http://www.immi.gov.au/skilled/457-h...isa-holder.htm) that: "The condition requires visa holders to maintain adequate arrangements for insurance for the duration of their stay in Australia" So this means that if I am NOT IN AUSTRALIA I can stop to pay the insurance, restarting it, when I will be in Australia? Is my understanding right? If not, can I do something different like do not cancel our Health Insurance but request to be moved on a latter date in a way to move also the payment? I am really sorry to bother you also with other questions, but as you could understand all this certainties are important for our staying in Austalia. So i need your help. Please help me, trying to clarify my doubt. 2) LAFHA As I told you, I got the 457 VISA just for 2 years (from 11 August 2011 to 31 August 2013) and I know from the ANU that I can apply for getting the LAFHA. My maximun LAFHA will be (85,733-47,480)=$ 38,253, right? So this menas that all the tax that eventually I have to pay (Salary Tax, MediCare and my part of 7% of the Superannuation), will be applied on this $47,480, right? See calculation below. Suppose that i will then get an extension of my ANU position for other 4 years, will be possible to get a new 457 VISA and so the LAFHA? 2) RHCA My understanding was that i just had to have a private Health insurance for getting the 457 VISA, but once I will be in Australia, I can get for sure the MediCare card for the RHCA. Moreover I read that the MediCare is sufficient to meet the health insurance required by the 457 VISA and so it should not be necessary to make the private health insurance. Is it right? Moreover, a friend of mine is working in Melboune, not with 457 VISA because he is working in Australia but not paid by the Australian, and he said that he got the card for FREE just going to the Medicare office, since Italian. When he leaves Australia and return he can ask for another MidiCare card. He just went to the MediCare office and asked for a Card. If so, my doubt is, SHELL I have to pay the 1.5% of the Medicare levely or since the RHCA i can get it for free? What about my de facto relationship? She got the 457 VISA too, thanks to my one, but she is without INCOME. Do she will pay the Medicare levys? Is for the Austalians the definition of a family also a couple in a de-facto relationship? Because if it is like this, i read that, even if I have to pay the Medicare levys (that I still did not understand), since our two incomes are given just by my one ($85,733) and since is less of $160,000, i do not have to pay the 1 % for the surgery. Is it right? If I should pay the MediCare levels (1.5% + 1%), Could I do a private health insurance and avoid to pay them? 3) Australian Taxation With the 457 VISA and with 2 years position, I am an Australian resident for taxation purposes (http://www.ato.gov.au/content/12333.htm)? And then, if I will stay longer (4 year ANU extension)? 4) Superannuation Suppose that I stay with the 457 VISA in this 2 years (and for the 4 year ANU extension), can I claim (bring with me) my superannuation benefits (both the university (17%) and my one (7%))? Which part is taxed at 35%? Will be the university one (17%) calculated on the $ 85,733 gross salary or on the $47,480 if i will apply for the LAFHA? What about the 7%? Can I decide to reduce my 7% to 0%? And then, if I will get the 4 year ANU extension, it will be the same? In any case I should not apply for getting an Australian permanent resident, otherwise I will be not able to claim them, right? SO FOR SUMMARIZE, let me estimate my salary without the LAFHA: Gross salary: $85,733 Tax: $19,671 (If Australian resident for taxation purposes) Net salary: (85,733-19,671)= $66,062 -> $ 5,505 per month. - If with MediCare Net salary – 2.5% of Gross Salary: (66,062-(0,025*85,733)= $ 63,918 -> $ 5,326 per month - If with my superannuation of 7% Net salary – 7% of Net Salary: (66,062-(0,07*66,062) = $ 61,437 -> $ 5,119 per month - If with my superannuation of 7% and MediCare Net salary - 7% of Net Salary – 2.5% of Gross Salary : (66,062 - (0,07*66,062) - (0,025*85,733) )= $ 59,294 -> $ 4,941 per month - If with a Private INSURANCE (estimate $1100 per year) Net salary – 1100 = $64,962 -> $ 5,413 per month SALARY with LAFHA: New Gross salary $ 47,480 Tax on $ 47,480: $7,794 Merdicare 2.5% on $ 47,480: $1,187 Superannuation of 7% on (47,480-7,794) : $2,778 SO the Net salary will be (85,733 - 7,794) = $ 77,939 -> $ 6,495 per month. or SO the Net salary will be (85,733 - 7,794 - 1,187 - 2,778) = $ 73,974 -> $ 6,164 per month Could you tell me which of them will be realistically my Salary? My gross salary when i have recieved my contract (before the 7/07/2011) was at $82,834, but now the rate is increased to $85,733. Shell I have to make all the calculation on the new rate ($85,733), as I did ? I apologise for those questions but they are really important to me and LUCIA. My warmest regards Mario
  17. Maria1970

    Australia Tax Return question

    We lived in Australia in 2007/2008 and filled in Australian Tax Returns for our time there. Should we also have filled in Australian tax returns whilst we have lived in the UK. Just a bit worried we are going to be given a tax bill when we return to Australia for not putting in tax returns. TIA
  18. Finally, now perhaps we can have something else in the news to read about and perhaps things can settle down. I believe we have to do something to help our world for future generations and hope this is a step in the right direction. A stitch in time saves nine
  19. Hey guys, I came out to Adelaide with my partner in June, she had a 457 visa, I was on working holiday. I found a job fairly easily and started on a 3 month temporary contract and they said they'd have no problems sponsoring me for a 457 visa. Happy days. However, me and my partner split up last month and I have decided to head back to the UK. So I've just been looking into Tax refunds/claiming Super back, etc, and have realised that I declared myself as a resident for tax purposes when I started my job (as I fully intended to be settled in Adelaide for a minimum of 2 years) and now I'm thinking I probably should have been paying non-resident tax rates. I reckon it means I've underpaid tax by around $1000 and on top of flights home and stuff its eating into the little savings I had which I was hoping to use until I get myself up and running at home again! Anyone have any advice? If i just leave the country without saying a word about it would there likely be any repercussions? I know a way to get round it would be to stay until I have been here 6months and have the 457 visa, but to be honest after what's happened I just wanna go back home and see my family and mates. I also wouldn't want to let my work pay for my new visa and then leave a month or 2 later. Any opinions would be great, ta.
  20. Please clarify? Is it from the day I land in Oz? The day I start working in Oz? (which might be 6 months to 1 year later) The day I leave England? ( what if I go travelling for a while elsewhere in the world?) Reason I ask is once the house is sold in the UK I dont want to feel forced to transfer funds while FX rates may not be favourable? Help appreciated.
  21. Guest

    Quickest way to get tax number?

    Hi guys, We have a PR visa and understood that we apply online for a tax number when we get to Australia. However someone suggested today that the best way to get one was to queue up in the local tax office and you will get a number there and then - this advice was based on a holiday visa experience 10 years ago however (!) so a lot could have changed since then. Has anyone applied recently and could you let us know your experience? Thanks very much, Kate.
  22. Hi all I opened up an account with NAB prior to relocating to Australia and was told that "a non-resident withholding tax is calculated at a rate of 10%" on the interest earned. Has anyone successfully managed to get this waived until gaining full residency? (I realise it would need to be declared in the UK though) Thanks!
  23. boganbear

    PAYG tax on savings interest

    I've just received a strange letter from the ATO and even phoned them and am none the wiser. It was like talking to a robot. Basically, I have to pay tax on my savings in advance, paying every quarter about $250 at a rate of 32%. I don't earn megabucks and neither do I have millions in the bank. It's just my savings for a house deposit. They won't let me sort it out and pay off any money if I owe them any when I do next year's tax return. No one at work has heard of this so has anyone here received a similar letter or can explain it in plain English!!!
  24. Hi everyone, I came to Australia on a WHV and my application for de facto visa with my Australian partner has just gone in, can I still claim any tax back on my earnings on my WHV? How would I go about doing this? Any help would be much appreciated!! Thanks, Helen
  25. VISAS A person holding a Working Holiday visa (class 417 or class 462) is generally referred to as a backpacker. He must be under the age of 30. He (or she) is legally entitled to work during his holiday in Australia. He is entitled to remain in Australia for 12 months, work for half of that time but must not stay at any one job for more than six months. While in Australia, he can apply to have his visa extended from 12 months to 24 months. Australia has reciprocal Working Holiday (class 417) visa arrangements with UK, Ireland, Canada, Norway, Sweden, Denmark, Finland, Estonia, Belgium, Netherlands, Germany, Italy, Malta, Cyprus, Japan, Hong Kong, Taiwan and Korea. Australia also has Working Holiday (class 462) visa arrangements with Indonesia, Malaysia, Thailand, Bangladesh, Turkey, Chile and USA. A backpacker can also apply for other temporary work visas or even a permanent visa while in Australia provided, of course, that he otherwise qualifies. The most popular visas applied for by backpackers whilst in Australia are a) permanent residency visas and b) employer-sponsored temporary work visas. If a backpacker applies for a permanent visa, then in judging his eligibility, he will be awarded extra points for having spent time on a working holiday in Australia. A backpacker who applies for permanent or temporary residence will stand a strong chance of obtaining it if a) he has professional or trade qualifications, b) he has some years work experience in his profession or trade and c) he speaks fluent English. It generally takes from 5 to 8 months between applying for a work visa and obtaining it. Further information regarding obtaining permanent and temporary visas can be obtained at the Immigration Department's website. Applications can be made online. MEDICAL EXPENSES Australian residents carry a Medicare card. This entitles them to free or subsidised medical care. Non-residents are not entitled to subsidised medical care. But Australia has concluded reciprocal medical agreements with the following countries viz. UK, Ireland, New Zealand, Italy, Malta, Norway, Sweden, Finland, Netherlands, Belgium, Slovenia. Residents of these countries, with the exceptions of New Zealand and Ireland, mostly have access to health care on the same basis as Australian residents i.e. they get free public hospital care, subsidised prescriptions and a refund of 85% of doctors' fees. The can also apply in person at at any Medicare office and obtain a Medicare card similar to the card carried by Australian residents. Many doctors charge only 85% of the set fee ( i.e. "bulk bill") so the patient has nothing further to pay in those cases. Residents of New Zealand and Ireland are also entitled to free public hospital care and subsidised prescriptions but not a refund of 85% of doctors' fees. However, they can have free access to a doctor by attending an out-patients' clinic at a public hospital. Backpackers who are not residents of any of the afore-mentioned countries will have to rely on their travel insurance to get a refund. If a backpacker has paid medical expenses in Australia and he is entitled to a refund, he can obtain the refund by applying in person at any Medicare office or online. He should take his passport with him when claiming the refund and also when attending for medical treatment. For example, assume Fiona, a UK backpacker, sees a doctor who "bulk bills" and pays her a $25 consultation fee. She obtains a prescription for "the pill" from her. Next she goes along to her nearest Medicare office, presents the doctor's receipt and her passport and then obtains a cash refund of the $25. Then, she goes along to her local pharmacist and pays him the standard prescription charge of $34.20 to have the prescription dispensed. SUPERANNUATION Non-residents are entitled to receive a refund of superannuation contributions paid by their ex-employers on their behalf. "Superannuation contributions" is the Australian term for "retirement pension contributions". All employers must contribute a compulsory 9% of wages to an approved superannuation (pension) fund. The backpacker is entitled to a refund of this when he has left the country. However, the refund is subject to a tax-deduction of 30% i.e. the taxpayer receives the refund less 30%. Application for the refund must be made from outside the country. However, it can be applied for online from outside the country. Some superannuation amounts will be held by the Tax Office. Other superannuation amounts will be held by the respective superannuation funds. Accordingly, details of superannuation funds that the backpacker has contributed to must be provided to the Tax Office. The Tax Office then will send details of your application to each of the Funds that you have nominated. They, in turn, will contact you directly and pay you the refund, normally within 28 days. The Tax Office maintains a register of lost superannuation accounts i.e. person for whom the superannuation funds have no longer a valid address. It is probable that a quite a few backpackers are on this register. The register may be consulted online at the Tax Office's SuperSeeker site. Accordingly, before leaving Australia, a backpacker should 1) contact all of his former employers, 2) from each employer request a tax Payment Summary (Group Certificate) if he has not already received one and also ascertain from the employer a) the name of the superannuation fund to which the employer has contributed and b) the employee membership no. Let us take an example of a typical backpacker superannuation refund. Fiona earned $5,000 as a fruit picker during her working holiday in Australia. Her employer contributed 9% of $5,000 i.e $450 in superannuation. Fiona will get back $315. i.e. 70% of $450. TAXATION Backpackers not holding a Working Holiday visa are generally not entitled to work under the terms of their visa. If they do in fact work, then they are subject to Australian tax in exactly the same way as Working Holiday visa holders. Before starting work in Australia, a person must obtain an official Tax File No.; otherwise tax will be deducted from all wages received at the rate of 46.5%. When applying for the Tax File No, proof of identity must normally be supplied. An application form to obtain a Tax File No. can be obtained from any Post Office. However, a backpacker can now obtain a Tax File No. online from the Tax Office's website. This has the added advantage that under this arrangement proof of identity does not have to be supplied. If a backpacker expects to be self-employed during any part of his stay in Australia, then he should obtain an Australian Business No. (ABN) from the Tax Office. Otherwise tax will be deducted at 46.5% from his payments. The ABN can be obtained online. To sum up then, if you are going to Australia on a working holiday, be sure to apply for a Tax File No. ( and an ABN, if necessary) before seeking work. After obtaining a Tax File No. and before beginning work, an employee must complete an Employee Declaration form. This requires the person to state whether he is a tax-resident or not. If he is not a tax-resident, the employer must deduct tax at non-resident rates i.e. 29%. Later, when completing his Tax Return, a taxpayer must also state whether or not he is a resident. The Australian financial year runs from the 1st July to the 30th June. Every backpacker should file an Australian Tax Return as soon as possible after the 30th June each year. If the backpacker is leaving Australia before the end of the financial year i.e prior to 30th June, then he can complete a Tax Return for the year in advance and lodge it with the Australian Taxation Office. A backpacker can now file his Tax Return online and, of course, from anywhere in the world. A backpacker does not need a tax clearance certificate from the Tax Office before leaving Australia. When completing the Return, it should be noted that the deductible expenses available to Australian employees are more generous than for many overseas countries. For example, taxpayers can claim as deductions from income "all expenses incurred in earning income". This will include travel on duty, protective clothing and footwear, washing and laundry of protective clothing, cost of training courses, trade union fees, tools, business use of private phone, relevant books and publications, licences and registration fees, stationery used for work, bank charges re deposit of wages, tax agent fees, donations to charities etc. A backpacker cannot claim the cost of his living expenses in Australia as a living-away-from-home deduction or allowance. A taxpayer can claim up to $300 in work-related expenses before he will be required to provide receipts to the Tax Office if audited. Most people in Australia engage a Tax Agent to lodge their Return. The Tax Office will send any refund to the Tax Agent if an agent has been engaged or to the overseas address of the taxpayer otherwise if the taxpayer has left Australia. Tax Returns can be lodged from an overseas location as well. In such a case, the best solution would be to contact an Australian-based Tax Agent through the Internet. As previously mentioned, a backpacker can also file his Tax Return online. GST tax is the Australian equivalent of VAT tax. It is 10% added to the sale price. It should be noted that all persons leaving Australia are entitled to a refund of GST tax on goods taken out of the country. The goods must exceed $300 and must be carried as hand-luggage. The refund is obtained at the airport at departure time. For example, a week before departure from Australia, Fiona buys a laptop computer for $660. Later at departure, after clearing passport-control at the airport, she presents a) the invoice and b) the laptop to the Customs officer at the refund-booth. The Customs officer arranges to have a refund cheque of $60 sent to her home address (i.e. 1/11th of the purchase price). How does the taxation of backpackers differ from the taxation of Australian workers in general? First, it must be observed that, under the present interpretation of the law by the Tax Office, backpackers may or may not be deemed to be tax-residents of Australia. Tax-residency is quite distinct from immigration-status residency. The Tax Office now has a calculator on its website to determine whether a person is a tax-resident. You should use this to determine whether you are a tax-resident. You should keep a copy of its findings, if possible. Who is regarded as an Australian tax resident? This is a complex area of taxation law. But it can be summarised in a nutshell as follows: a) those who come to Australia solely to work, even for a short period, will be regarded as tax-residents; b) overseas students will be regarded as tax-residents; c) holiday-makers will not be regarded as tax-residents; e) those combining a holiday with work will sometimes be regarded as tax-residents and sometimes not. An example of the latter class is a person holding a Working Holiday visa. In general, travellers will not be regarded as tax-residents. But a backpacker who abandons his wandering ways and successfully applies to the Immigration Department for permanent residency or a temporary work visa will be regarded as a tax-resident from the date of his application. Further information regarding tax-residency can be found in the relevant tax Ruling at the ATO website and also at Residency. For example, Fiona, a nurse, decides she does not want to go back to the UK but wants to remain permanently in Australia. On the 1st May, she applies to the Immigration Department for permanent residency status as a skilled migrant. She decides to settle permanently in Sydney and she rents a flat there. She obtains a job as a nurse with the promise of the position being made permanent when she obtains permanent residency status. Subsequently, Fiona hears from the Immigration Department that she has obtained permanent residency status. Fiona will be regarded as a tax-resident of Australia from the date she filed her application for permanent residency i.e. 1st May. What difference does it make if one is not regarded as a tax-resident? Residents are taxed on their world-wide income. Non-residents are taxed only on the income arising from Australia. Residents pay no tax on first $6,000 of annual taxable income and pay tax at 15% on the next $31,000. Non-residents, however, do not get the concession of a tax-free allowance and are taxed at a flat rate of 29% on the first $37,000 they earn in Australia. As they can only work for 6 months of their 12 months stay, they are therefore unlikely to earn more than $37,000, so as a general rule they are taxed at a flat rate of 29% on their earnings. Thus, a resident who earns $37,000 in a year will pay tax of $5,115 (including levy) but a non-resident backpacker will pay tax of $10,730 on the same income. In addition, non-residents are not entitled to Tax Offsets for dependents etc. e.g. maintaining a spouse, child etc. Australia has concluded Double Taxation treaties with many countries. Most of these treaties provide that the following categories of persons are not subject to Australian tax but that they are subject to their home-country taxation regime. The categories are: a) self-employed professionals working in Australia for less than 183 days and who do not have their own office or branch in Australia, b) ordinary employees in Australia for less than 183 days and working for an overseas company that does not have a branch or office in Australia and c) teachers teaching in Australia for less than two years. Few backpackers will be able to avail themselves of these provisions. What advantages do non-residents have, tax-wise? 1. They are exempt from the Medicare levy. The Medicare levy is 1.5% levy on income which all residents have to pay to cover medical costs. 2. They do not have to pay Australian tax on income arising outside Australia. 3. In most cases, they pay tax at 10% only (and not 29%) on interest derived from an Australian bank account. This arises from the provisions of the Double Taxation treaties. Let us take an example of a typical backpacker income-tax refund. Let us continue with the previous example of Fiona who is regarded as a non-resident and who earned $5,000 as a fruit picker during her working holiday in Australia. Her employer deducted tax at the regulation 29% from her wages i.e. 29% on $5,000 =$1,450. Fiona has the following tax deductions viz. protective clothing and footwear $300; implements $100; sun-protection products $100; bag $50. Total deductions are $550. Fiona lodges her Tax Return after the end of the financial year and employs a Tax Agent to lodge it for her. His fee is $120. Fiona's refund is calculated as follows. Fiona has a refund of $159 out of which the Tax Agent's fee of $120 comes, leaving Fiona with a net refund of $39. In effect, Fiona has received a refund at 29% on her deductions of $550 less the Tax Agent's fee. However, in most cases, work-related expenses would not exceed $300. Information kindly provided by: http://members.iinet.net.au/~patrick6/default.html