Non-Residents

[Paul@PFI]

Just came across a tax issue I hadnt seen before. Inbound taxpayer coming here on 457 Visa for 4 years or maybe longer. OK they are a tax resident using the ATO's residency tool. They arrived here in early April...So how much of the tax free threshold do they get ?? Back for years the $6k threshold used to be a pro-rata that worked and gave $500 a month.

Anyway it appears we now have a cushioned pro-rata. The tax free of $18,200 is split into two elements. All taxpayers (even arriving on 29 June!!) get $13,464 tax free. Then the remaining $4736 is pro-rata according to months basis and further increases the tax free amount....ie Arrive April then you get 3/12th x $4736 + $13,464 = $14,648...

This means a huge tax free amount quite disproportionate to the full year earnings by a resident here all year. And thus a improved refund. Same apportionment applies for departing resident taxpayers too.

Correct me if I'm wrong but this seems to be the ONLY generous tax benefit Wayne Swan gave taxpayers in the past few years. Everything else was just take take take. Have to say I was surprised. It effectively means the smallest tax free threshold is $13,464.

http://www.ato.gov.au/Individuals/I...ax-free-threshold-for-newcomers-to-Australia/

 

[Rob G.]

Temporary residents (specifically the section 457 VISA mob) get royalty tax status in Australia.

Just like the CGT exemption for non-residents investing here in anything but land.

Australia is hungry for foreign funds and skilled labour, but doesn't give many breaks to small Australian investors or workers wanting to earn overseas without having to relocate.

 

[justgjt]

.......Australia is hungry for foreign funds and skilled labour, but doesn't give many breaks to small Australian investors or workers wanting to earn overseas without having to relocate.

Yes, this was one of the arguments that was put forward prior to the tax law changes back in 2009. The then government stated they would gain approx >$350M in extra revenue but actually received far less as the offshore income workers left the country in droves and took their income with them. This resulted in millions of spending dollars being stripped from the retail / service economy.