Dubai Tax Free J0b - but wouldn't I have to pay ATO Tax?

T

tom1000000

Hi

I work in IT and have been offered a job in Dubai.

Has anyone worked there recently - could you give me an idea what Dubai is like?

The job is advertised as "tax free". I think that is a bit of a con, surely if i am an Australian resident I must pay the ATO?

If I leave Australia now then I would spend less than 6 months in Australia so I could claim I am non resident?
The issue with that is I already have $20,000 in gross income, and if you are non-resident the ATO tax rates are higher - there's no tax free threshold etc?
The other question I have is that I have 2 investment properties, neutrally geared. Would the real estate disqualify me from claiming I am non-resident?

I guess these questions will be answered with "See an accountant". If anyone could give help that would be awesome.
 
If you are an Australian resident, you would pay tax on worldwide income in Australia. But if you are living and working in Dubai, then, more than likely, you would be a non-resident for tax purposes.

Yopu are right, if you are a non-0resident, you don't get a tax free threshold. So you would pay higher tax on your rental income, but no tax on any income earnt outside Australia.

The real estate holdings would not disqualify you from being a non-resident.
 
had a friend working there before, it's pretty awesome for first few months but after a year he was sick of the place and the way people are treating the second class citizens. he felt disgusted and left after that. the pay was good though

he didnt have to pay for tax here but he doesnt have any investments here either.
 
Hi,

Can't answer your question legitimately on tax, but can also confirm that you will love it and then.....hate it. Give it a year or two.

Class order:

1. Sheiks
2. UAE's
3. Other Arabs
4. Westerners... so really 4th class citizens..
5. Expats mostly Sri-Lankins, (workers)

VERY hot and expensive.

I had alot of fun while I was there though.:)

Regards JO
 
laws were changed a couple of years ago re tax on foreign income, ill let one of the experts post more info. had to look into it for my dad as he was potentially moving overseas for 2 years.

essentially now you have to be classified as a non-resident to avoid paying australian income tax BUT it is harder to be a non-resident. going overseas for a year and intneding to come back is not sufficient, you would have to go with the possibility of not coming back and would have to somewhat cut ties here


someone pls correct me if im wrong but that was my understanding of it
 
apparantly you shouldn't sign up for an expensive lease and buy a new audi the moment you land, because there are no bankruptcy laws! all debts must be met before you are allowed to leave the country. there was a thread n here a couple of years ago talking about the partners of locked up expats sleeping in their range rovers

oh and if you get raped don't report it because you are more likely to be locked up than the criminal
 
tom1000000 said:
Aaron, your assurances seem very doubtful to me, because you have provided a useless web link. You have linked to Taxation Ruling TR 98/17: Income tax: residency status of individuals entering Australia.

If we had a link for a Taxation Ruling re individuals LEAVING Australia that would be great.

I think sanj is probably correct unfortunately.
Click to expand...

Actually the same test applies to individuals whether you are entering or leaving Australia. It's an objective assessment of whether you normally reside in Australia, taking into account your actions and behaviour. So I am correct and so is that link I gave you.
 
Aaron_C said:
Actually the same test applies to individuals whether you are entering or leaving Australia. It's an objective assessment of whether you normally reside in Australia, taking into account your actions and behaviour. So I am correct and so is that link I gave you.
Click to expand...

Aaron, I am getting frustrated with your blatant ********.
The link you gave refers to TR98/17.
What happens when you open TR98/17 and read its contents?
The Class of person/arrangement is......
most individuals entering Australia

Aaron, at least you aren't an accountant. So you should just admit TR98/17 is a complete waste of time and referring to it was pointless.
 
There are no personal income taxes in Dubai, so it is tax free in a manner of speaking.

You would need to consider the resides and domicile tests if you were to become a non resident. The domicile test depends on property you own or use on a regular basis here in Australia. The resides test is very messy, the page AaronC linked to, that you insulted him over, actually covers a lot of relevant issues you need to consider in that regard.

Have a peek at the somewhat useless Are you a resident? tool at the ATO website as well.

No one here can answer your question definitively unless we know your family and asset situation. I would say as a guess that you would be a resident of Australia.
 
They should have added No. 6 - women. Looks like you are aguy so you will fare better, but as a woman even on holiday there is no way I would live there. Fabulous to sightsee but you could pick up the prejudice against women everywhere, and they way they treat any household help is shocking.
 
I have been involved in a number of offshore voluntary disclosure cases and this is what the ATO looks for when analysing residency status. Not saying any one of them leads to residency but they are things they look at

1. do you have any property in Australia. If the property is not being rented out why not ? This could be an indication you intend to come back.
2. do you have family back here i.e. wife, children, etc
3. bank accounts here. have you notified the banks of non residency status and request for them to have interest withholding tax applied.
4. are you still on the electoral roll ?
5. what boxes did you tick on your departure card. This is sometimes the first thing they look at !!
6. have you got any personal belongings in storage ? again reasons why
7. if subject to a Section 264 interview you might be requested to provide emails and those emails may indicate things such as your intentions re how long you will stay.
8. facebook status updates saying things like "off to dubai for a year. woohoo can't wait to return".
9. have you kept a car here. i.e. did you have one and left and haven't transferred it or sold it. why not ? did you try and weren't successful ? again why not ?

just a few things that come to mind from past experience.
 
remember that any income not declared (and tax paid upon) in Australia can't be used to calculate serviceability here, either.

so heading overseas on $250k a year as a non-resident means no bank will look at your last $500k income across 2 years as a "private contractor".

pay the tax here though through your still-current ABN, and it's all good.

same goes for income quarantined overseas as part of international tax agreements - like CF+ USA property .... quarantined = quarantined, basically if you don't pay tax on it, you can't claim the serviceability.

i wonder if that's a cartel system via the RBA and ATO? i wonder.
 
coastymike said:
I have been involved in a number of offshore voluntary disclosure cases and this is what the ATO looks for when analysing residency status. Not saying any one of them leads to residency but they are things they look at

1. do you have any property in Australia. If the property is not being rented out why not ? This could be an indication you intend to come back.

plenty of people emigrate and maintain investment properties. if they are rented it's an investment, not a reason to return.

2. do you have family back here i.e. wife, children, etc

this is the biggie - surprisingly the most obvious and the one most folk overlook. if your wife and you are married, she is paying tax as a resident and you are not - then it's curtains for you - the only way around this is proof of seperation (different bank accounts etc).

3. bank accounts here. have you notified the banks of non residency status and request for them to have interest withholding tax applied.

common to overlook, but an accountant would be able to clear that up and could be sorted with back pay. technically if you are a non-resident, why do you need an AUS bank account?

4. are you still on the electoral roll ?

you don't have to be struck off. if you don't update your details you are automatically removed.

5. what boxes did you tick on your departure card. This is sometimes the first thing they look at !!

yep.

6. have you got any personal belongings in storage ? again reasons why

they could be in storage pending sale when you're settled.

7. if subject to a Section 264 interview you might be requested to provide emails and those emails may indicate things such as your intentions re how long you will stay.

subpoenaed of course, but yes, very likely.

8. facebook status updates saying things like "off to dubai for a year. woohoo can't wait to return".

you would need a friend to dob you in for your intentions. coming back for a holiday to visit family is a perfectly acceptable excuse to re-enter the country.

9. have you kept a car here. i.e. did you have one and left and haven't transferred it or sold it. why not ? did you try and weren't successful ? again why not ?

see "storage"

just a few things that come to mind from past experience.
Click to expand...

you pretty much hit the nail on the head. :cool:
 
Aaron

Spot on. It all comes down to what was the intention of the person. For one they will be a non resident for another a resident.

Even if they are a resident then you need to delve further into the double tax treaties (if applicable) to see whether there is a tie breaker provision that deems them to be a resident of another country.

Re point 1 probaby need to clarify. If you lived in a property and moved overseas but kept the property vacant then ATO will be asking why. Had a client who was Chinese and his response was that he wanted to maintain it as an investment and Asian cultures frequently buy properties leaving them vacant as they are after capital returns not rental returns and having someone in the house would be bad (spirits could come into the house) and they would dirty the property. Quite acceptable.

All good fun.
 
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