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  • Panel warns against expat tax rule

    Panel warns against expat tax rule







    Andrew Main | June 23, 2009

    Article from: The Australian


    A CRACKDOWN on how expat Australians are taxed announced by Treasurer Wayne Swan on budget night on May 12 has run into choppy waters in a Senate committee, according to a report tabled yesterday.

    The Senate Economics Legislation Committee noted that the abolition of Section 23AG of the Income Tax Act, which covers people working offshore for between 91 days and two years, was going to create a compliance burden that in some cases was going to be out of proportion to the amount of tax revenue gained.



    The bipartisan committee recommended bringing back at least three exemptions to the new rule, which Mr Swan said would net an extra $675 million in tax over three years to 2013.



    The tax move is aimed at some 11,000 expats who Treasury says are earning at least $85,000 a year and pay "little or no tax at all" in Australia, according to Treasury submissions to the committee. However, it became clear at a recent committee hearing in Canberra that any move to make Australians in that group pay tax in this jurisdiction will cause a lot of them to stay away for longer than two years -- and thus cease to be liable to pay any Australian tax.



    The 23AG exemption was brought in in 1986, and allows expats a tax holiday as long as they are paying tax in another jurisdiction. Its abolition would reinstate the need to pay tax at home, although a FITO (foreign income tax offset) showing that tax was paid offshore would reduce liability.



    The first move is for the ATO to give an exemption that will spare backpackers from the new rule, by exempting the first "X" thousand dollars of offshore income. It also suggested limiting the new rule to "large employers", without defining their scale, and devising ways to prevent expats from being hit by Pay As You Go tax withholding, and corporates from being hit by double taxation of fringe benefits.



    An accompanying note from Coalition committee members Senator Alan Eggleston and Senator David Bushby called for a transition period before the proposal became law, describing the planned crackdown as "a rushed and poorly-thought-out measure on the part of the Rudd government with apparently little or no regard ... given to the difficulties that the proposed short lead-in time to implementation will cause for those directly affected."
    Yasser El-Ansary, general counsel for the Institute of Chartered Accountants in Australia, said his organisation was "disappointed that they haven't made a recommendation that transitional arrangements would be provided for". "Not having such an arrangement will result in a significant financial impost on employees and businesses," he said.



    John Fauvet, a partner at PricewaterhouseCoopers, said the budget proposal had been put together with "indecent haste" with only six weeks being nominally allowed from the date of the announcement to implementation on July 1.



  • #2
    ooohhhhh NO i really feel for you guys, you are true aussie battlers.

    Comment


    • #3
      Originally posted by Rider View Post
      ooohhhhh NO i really feel for you guys, you are true aussie battlers.
      if people make great sacrifices to improve there way of life, why should they be fucked over twice?
      Atlas Performance, dyna pumps, " your name goes here"

      Comment


      • #4
        even if they got fucked over 3 or 4 times, they are still better off then most

        Its just the same story, those who are earning the big $$$$ bitching how hard it is. They also make it sound like if they didnt do that job no one else would do it.

        For the record i would love to pay the tax that you pay

        Comment


        • #5
          Originally posted by Rider View Post
          even if they got fucked over 3 or 4 times, they are still better off then most

          Its just the same story, those who are earning the big $$$$ bitching how hard it is. They also make it sound like if they didnt do that job no one else would do it.

          For the record i would love to pay the tax that you pay
          Nobody should be fucked-over, that's the point... It should be possible for the government to levy tax fairly. Screwing Australian tax out of folk who aren't living here and "enjoying the benefits" is knob-rot.

          For the record - would you enjoy being fucked over if you were able to go and expat - or at any other time? (I don't know if you could or couldn't expat - not having a slice Rider... ^_^_)

          Comment


          • #6
            All i am hearing is wwwwaaaa wwwwaaaaa I am paying too much tax, fuck K. Rudd wwwaaaa wwwaaa i am poor.

            BTW i am not envious of those who are on big $$$$ Good luck to them.

            Comment


            • #7
              Would you be happy instantly taking a 40% pay cut?
              Would you also be happy being paid 40% less for a dangerous job in a dangerous place, with real risks?
              For LAMS information and resources - http://www.perthstreetbikes.com/foru...thread-156358/
              For LAMS discussion and to ask questions - http://www.perthstreetbikes.com/foru...thread-143289/

              Comment


              • #8
                Originally posted by Rider View Post
                All i am hearing is wwwwaaaa wwwwaaaaa I am paying too much tax, fuck K. Rudd wwwaaaa wwwaaa i am poor.

                BTW i am not envious of those who are on big $$$$ Good luck to them.
                And your answer to the question is?

                Comment


                • #9
                  I read this as people working overseas yet still having a residential address in Australia. If thats the case then I can understand the laws requiring changing. We are one of a few western countries that still have this "loophole". For people residing overseas they should abide by local taxation laws if that is their residential address. This applies to people working in Australia. If a backpacker gets a job here they need a TFN (tax file number) and a residential address in Australia then they pay tax to the ATO.

                  Comment


                  • #10
                    Originally posted by Bundera78 View Post
                    I read this as people working overseas yet still having a residential address in Australia. If thats the case then I can understand the laws requiring changing. We are one of a few western countries that still have this "loophole". For people residing overseas they should abide by local taxation laws if that is their residential address. This applies to people working in Australia. If a backpacker gets a job here they need a TFN (tax file number) and a residential address in Australia then they pay tax to the ATO.
                    OK - I am down with that, but what is a fair level? If you don't live here and aren't getting the benefit or aren't drawing/arent able to draw on the infrastructure how much should you have to pay because you have a house (or just an address) here?

                    Comment


                    • #11
                      Originally posted by Rider View Post
                      even if they got fucked over 3 or 4 times, they are still better off then most

                      Its just the same story, those who are earning the big $$$$ bitching how hard it is. They also make it sound like if they didnt do that job no one else would do it.

                      For the record i would love to pay the tax that you pay
                      Bitching about double tax.

                      The only person bitching here is, wait for it, YOU.


                      Originally posted by Rider View Post
                      All i am hearing is wwwwaaaa wwwwaaaaa I am paying too much tax, fuck K. Rudd wwwaaaa wwwaaa i am poor.

                      BTW i am not envious of those who are on big $$$$ Good luck to them.
                      Your nose is growing.....


                      Comment


                      • #12
                        Originally posted by Griff View Post
                        OK - I am down with that, but what is a fair level? If you don't live here and aren't getting the benefit or aren't drawing/arent able to draw on the infrastructure how much should you have to pay because you have a house (or just an address) here?

                        ZERO tax is the answer to that one.

                        Be deemed a Non-Resident of Australia (as per Domicile,Resides, 183 day rule, Superannuation) in the eyes of ATO and you can remain tax free on the income.

                        I can still maintain ownership of Property, but, any income derived from the property will be taxed with a rather large pineapple.

                        Pretty sure Back Packers get a break in tax on the first $10K AUD.


                        Comment


                        • #13
                          Originally posted by barfridge View Post
                          Would you be happy instantly taking a 40% pay cut?
                          Would you also be happy being paid 40% less for a dangerous job in a dangerous place, with real risks?
                          I have had a 30% pay cut and i am getting by, times are shit

                          Originally posted by jules_1972 View Post
                          Bitching about double tax.

                          The only person bitching here is, wait for it, YOU.

                          I am not bitching and if you read my posts you will find i hardly ever bitch/rant.

                          BTW i think this is like the 4th thread on tax that you have posted.

                          Your nose is growing.....
                          Mate i wish you all the best even tho i dont know you from a bar of soap. I am NOT envious of you or any other person, i truly wish everyone the best.

                          Comment


                          • #14
                            Originally posted by Rider View Post
                            Mate i wish you all the best even tho i dont know you from a bar of soap. I am NOT envious of you or any other person, i truly wish everyone the best.

                            Excellent, thats good to hear.

                            Im well aware of how many posts I have put up in relation to the subject of Section 23AG tax.

                            Alot of people read PSB, some find threads very useful for their
                            own interest/background and knowledge.

                            The previous posts I have done have been for just that reason.
                            TO SHARE INFORMATION and KNOWLEDGE.

                            The first post was interesting as it received the comments from people
                            who have no clue in regards to overseas workers and PIT.

                            Yet there was a couple of posts drawing interest from people who are either in the same predicament or know of someone who is.

                            Sharing of knowledge can help others with the possibility of assisting another fellow Australian in their quest to get somewhere in their chosen lives.

                            Who knows, one day even you might need a helping hand in regards
                            to overseas tax.


                            Comment


                            • #15
                              My head always seems to switch off as soon as I read 'tax'
                              I'm about to head overseas to work while still being paid by my office here in Perth (In Aussie dollars)...is this change going to affect me? I'll be gone for about 12 months apparently.

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