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jules_1972
23-06-2009, 10:39 AM
Panel warns against expat tax rule







Andrew Main | June 23, 2009

Article from: The Australian (http://www.theaustralian.news.com.au/)


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.

Rider
23-06-2009, 01:12 PM
ooohhhhh NO i really feel for you guys, you are true aussie battlers.

Arwon
23-06-2009, 01:35 PM
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?

Rider
23-06-2009, 01:51 PM
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 ;)

Griff
23-06-2009, 02:01 PM
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... ^_^_)

Rider
23-06-2009, 02:08 PM
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.

Barfridge
23-06-2009, 02:14 PM
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?

Griff
23-06-2009, 02:20 PM
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?

Bundera
23-06-2009, 02:21 PM
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.

Griff
23-06-2009, 02:25 PM
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?

jules_1972
23-06-2009, 02:35 PM
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.



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.....

jules_1972
23-06-2009, 02:43 PM
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.

Rider
23-06-2009, 03:08 PM
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


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.

jules_1972
23-06-2009, 03:24 PM
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.

Reidstah
23-06-2009, 03:50 PM
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.

Semi
23-06-2009, 03:56 PM
If people are working overseas, but living here, then they should be paying tax, although maybe slightly less than people living and working here.

If they're living and working overseas, they shouldnt be paying australian tax.

dugy
23-06-2009, 04:01 PM
One thing companies often forget to mention is if you have a HECS/HELP debt they will calculate the required repayment based on your gross earnings for the year both in OZ and overseas.

Same goes for your medicare levy.

jules_1972
23-06-2009, 04:04 PM
If people are working overseas, but living here, then they should be paying tax, although maybe slightly less than people living and working here.

If they're living and working overseas, they shouldnt be paying australian tax.


Section 23AG was to address people Living and working
overseas not to get DOUBLE TAXED PIT.

I would agree on a form of Australian PIT if you were
paying ZERO PIT, eg, Brunei.

jules_1972
23-06-2009, 04:05 PM
One thing companies often forget to mention is if you have a HECS/HELP debt they will calculate the required repayment based on your gross earnings for the year both in OZ and overseas.

Same goes for your medicare levy.


Ouch.....

chew
23-06-2009, 04:24 PM
if people make great sacrifices to improve there way of life, why should they be fucked over twice?


Section 23AG was to address people Living and working
overseas not to get DOUBLE TAXED PIT.

I would agree on a form of Australian PIT if you were
paying ZERO PIT, eg, Brunei.


My understanding of the changes are that this is a tax offset proposal i.e. If you are in a country paying 15% PIT (personal income tax?) the ATO will be targetting the difference between what you are paying O.S. and what you would be paying in OZ? Where does the double tax reference originate?

dugy
23-06-2009, 04:55 PM
Ouch.....

Very. I was expecting a tax return last year.....instead I got a pineapple.

jules_1972
23-06-2009, 05:02 PM
Bastids!!!

Phuck

PolishDude
23-06-2009, 07:00 PM
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 ;)

Get a real job then, stop fking moaning :lol:

PolishDude
23-06-2009, 07:07 PM
One thing companies often forget to mention is if you have a HECS/HELP debt they will calculate the required repayment based on your gross earnings for the year both in OZ and overseas.

Same goes for your medicare levy.

yeh right, blame ur local gov for making education more expensive.
By the way, if u're working overseas straight after uni, u WILL afford paying off ur HECS in one year . . .

ppl bitch, couse they're jealous :lol:

thro
23-06-2009, 08:43 PM
even if they got fucked over 3 or 4 times, they are still better off then most ;)



Oh wah wah fuckin wah.

If its so fucking awesome, go get a job offshore



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.


They took the job based on the deal being that the income in the hand was what it was. If you're going to get taxed to fuck so that you're down with plebian "i'm too scared to take the risk" or "i don't wanna leave my mummy" types who have a nice cozy job in Australia where they can be home with their family every night/week/month, then why bother?



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

They're screaming out for oil and gas types at the moment (no/minimal experience required). The option is there.

Not interested? Thought not....





In addition to all that... the guys have ALREADY PAID TAX. They pay tax on everything they buy here, every investment they make here, etc. I'm fucking SICK of this aussie whiny fucking tall poppy shit, coming from people who are simply too pissweak to get off their arse and earn the money rather than bitch about people who are out there doing it.


there. i haven't had a good rant in ages, but this really fucking "gets my goat"


All this ridiculous law will do is:
- TEMPORARILY win votes with plebs
- kill australian company competitiveness in offshore contracts and stop australians coming home to spend their offshore-earned money, thus fucking the economy further into the hole in the ground it is rapidly spiralling into...


edit:
for the record, I am an australian resident for tax purposes and i do not have any offshore income. I'll still call a spade a spade though, and this law is fucked. I do work for a multinational australian company though, who is seriously going to have to reconsider various offshore contracts if this shit gets passed.

Rider
23-06-2009, 09:00 PM
Thro, i am prepared to do any job that is paying 150K + i dont care where i go and how long i say, or the sort of work i do. As long as i am not getting beaten or fucked (literally) i dont care what i do i will do it for the money. Having said that i am only prapered to offer 3 years of my life and i mean 3 years full time.

NOW please point out where this urgent need is in the Oil and Gas and also if you have any contacts that i can call on. I am not the only one that would like a make those sacrifices, i can asure you that.

Oh I have seen and experianced danger and it was for free ;) got nothing for the experiance besides exp.

I would also like to point out this is not about envey......And if you have read any of my 2000 + posts you will not see a trace of envey.

EDIT: i am not that money orientated BUT at this stage of my life i need certen amount of $$$$ to do certen things ;)

BigTim
23-06-2009, 09:22 PM
Having said that i am only prapered to offer 3 years of my life and i mean 3 years full time.
And here's why you won't get work in that field, and why the guys working away are being well paid for it.
Have any of the guys on here that work O/S given their employer an unreasonable 3 year time limit, while being completely inexperienced? No? Weird.

Rider
23-06-2009, 09:33 PM
When i say full time i mean NO time off and only time away is 4 weeks holiday. I am also prapered to take a long term(25+years) role if there was a roster i.e 2/2 3/3 4/4 3/2 4/2 bla bla bla

I dont get what the issues is....You work hard you get payed more, the more you get payed the more you get taxed.

And please dont give the ''whats the point of working hard if you gona just pay it back in tax'' beause with that reasoning everyone would he on the doll ;)

BTW I am not saying that those that are earning good money havent earned it

Desmo
23-06-2009, 09:36 PM
You contradict yourself.
You say you will only do 3 years, then say you want to do it forever.
I'm confused.

Rider
23-06-2009, 09:43 PM
You contradict yourself.
You say you will only do 3 years, then say you want to do it forever.
I'm confused.

I say 3 years full time meaning NO HOME TIME i.e you work but you dont go home you get a rest day on Sunday, and so on

i never said i wanted to do it forever i said i am prapared to commint to an employer for next 25+ years (my working life, if i was i working in that environment) if i was on a roster meaning i get to come home every few weeks.

Once again i understand that there is a good reason(skill, danger, remotness) people get payed good money.

Arwon
24-06-2009, 05:12 AM
To take this pay/tax issue to its ultimate conclusion.

If you worked on a ship doing exploration or whatever and travelled through the teritorial waters of 4 nations, would it be fair to pay tax to all 4 nations and in Australia as well.

Semi
24-06-2009, 05:38 AM
Yes it would. It'd be fair in what they're proposing, because you pay less Australian tax with the more you pay overseas tax. its not like you're paying 47% twice.

Arwon
24-06-2009, 06:25 AM
why should i pay 47% at all. its not like i use medicare or any other service this country has to offer more than someone earning $40k.

DaveR6
24-06-2009, 08:42 AM
My understanding of the changes are that this is a tax offset proposal i.e. If you are in a country paying 15% PIT (personal income tax?) the ATO will be targetting the difference between what you are paying O.S. and what you would be paying in OZ? Where does the double tax reference originate?

Thats cause you are correct. There is no double taxing. You get tax credits for what you have already paid overseas. So its not like you are getting taxed twice.

jules_1972
24-06-2009, 08:53 AM
Thats cause you are correct. There is no double taxing. You get tax credits for what you have already paid overseas. So its not like you are getting taxed twice.

Workers will get taxed twice..

1st in the country work carried out in.

Yes Tax paid there is offset on income being xferred to Australia.
Remainder will be subject to Australian Tax at current scales.

So that equals, twice, right???


So tell me how it would work if paying tax in PNG at 50%?
Would the ATO give $$ to the workers??

Doubt it very much.


I agree with Arwon, in regards to working in 4 different waters over a period. I also agree on Shove Medicare where it fits, Im very happy to pay an International accredited Health Insurance company that will cover me anywhere on this planet (Except USA!!!!).



Tell me how it works for Maritime workers???

DaveR6
24-06-2009, 09:44 AM
Workers will get taxed twice..

1st in the country work carried out in.

Yes Tax paid there is offset on income being xferred to Australia.
Remainder will be subject to Australian Tax at current scales.

So that equals, twice, right???


So tell me how it would work if paying tax in PNG at 50%?
Would the ATO give $$ to the workers??

Doubt it very much.


I agree with Arwon, in regards to working in 4 different waters over a period. I also agree on Shove Medicare where it fits, Im very happy to pay an International accredited Health Insurance company that will cover me anywhere on this planet (Except USA!!!!).



Tell me how it works for Maritime workers???

Lets take a simple example. Assume in the foreign country you earn $100 are the tax rate is 30%. In Australia the tax rate for that is 40%.

You cough up $30 to the foreign government. The Australian tax on the $100 at 40% is $40. However, the Aus government gives you a tax credit for tax paid to the foreign government. So you only have to pay $10 to the Aus governemnt. There is no double tax there.

In the case where the foreign goverment tax rate exceeds the Australian marginal tax rate, obviously no tax would be payable to the Aus government.

There is no double tax in terms of having to pay both governments the full amount. You are no worse off than had you earnt all your money in Australia.

jules_1972
24-06-2009, 09:53 AM
There is no double tax in terms of having to pay both governments the full amount. You are no worse off than had you earnt all your money in Australia.


Very good.

So in your Simple Words, how does this benefit anyone?

Griff
24-06-2009, 09:53 AM
You work hard you get payed more, the more you get payed the more you get taxed.

This is the crux of the matter - and where the "being fucked" comes in. What is a fair mode/rate of taxation?

For me, a minimal flat rate income tax (say 20%), with enhanced consumption tax (also say 20%) seems good... I think such a formula would make this assault on the expat worker a real side-issue and probably a non-starter...

DaveR6
24-06-2009, 10:00 AM
Very good.

So in your Simple Words, how does this benefit anyone?

Someone posed the question about it being double tax and I explained it. I wasnt giving an opinion on the proposed tax changed.

But since you ask. It benefits all Australians living in Australia. More tax for the government means more money to be spent on what ever the government sees fit. Be it education, infrastructure, health, defence or retiring government debt. Seems to me like it would help lots of people.

Obviously, those few who have to pay more, like yourself, wont like it.

jules_1972
24-06-2009, 10:02 AM
This is the crux of the matter - and where the "being fucked" comes in. What is a fair mode/rate of taxation?

For me, a minimal flat rate income tax (say 20%), with enhanced consumption tax (also say 20%) seems good... I think such a formula would make this assault on the expat worker a real side-issue and probably a non-starter...


Love it!!

But not just on Expat workers, put it on everyone!!!!

Here one for ya -

"When you look at the fact that in the first year that GST was introduced the Government raised revenues of $24 billion and that's now projected to increase to $42 billion in the next few years. That's a 9 per cent per annum increase in revenue. From the Government's perspective, a great success."

jules_1972
24-06-2009, 10:11 AM
But since you ask. It benefits all Australians living in Australia. More tax for the government means more money to be spent on what ever the government sees fit. Be it education, infrastructure, health, defence or retiring government debt. Seems to me like it would help lots of people.

Obviously, those few who have to pay more, like yourself, wont like it.



Benefits ALL AUSTRALIANS?
Which percentage?

And as for me being not liking it, There is LEGAL ways for me to AVOID PIT.

xphread
24-06-2009, 10:18 AM
Which percentage?

ummm...the majority? (ie - those who dont work overseas and stay there 100% of the time?)

...so I guess that includes you at the moment.

jules_1972
24-06-2009, 10:19 AM
Someone posed the question about it being double tax and I explained it. I wasnt giving an opinion on the proposed tax changed.

But since you ask. It benefits all Australians living in Australia. More tax for the government means more money to be spent on what ever the government sees fit. Be it education, infrastructure, health, defence or retiring government debt. Seems to me like it would help lots of people.

Obviously, those few who have to pay more, like yourself, wont like it.


Can you understand what is written below?

"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."

jules_1972
24-06-2009, 10:22 AM
ummm...the majority? (ie - those who dont work overseas and stay there 100% of the time?)

...so I guess that includes you at the moment.


OK, as long as you feel happy with your TAX dollars being spent in the right places then Good Oh.

I smell a hook here..