working and taxed in PNG how do we claim tax deductions on investment property here

[JPS25]

Hi

We have just got our first investment property up and running all going good. My husband has just been offered a job working in Papua new Guinea where he will also be taxed under their system. Our question is if he pays tax over there how does he go about claiming a deduction for the investment property that is negative geared in his name only. We know he won't be taxed in this country because of the double tax treaty, but how will all this effect the investment property owned over here in his name only.

Any help is appreciated.

Thanks JPS25


JPS

 

[skater]

Speak to an accountant that specialises in issues effecting ex-pats.

 

[jrc]

Possibly your husband could get a recommendation from some of his work colleagues

 

[Mry]

We know he won't be taxed in this country because of the double tax treaty, but how will all this effect the investment property owned over here in his name only.

That's not how double tax treaties work, what it means is that you won't be taxed twice on the same income. You will be taxed in PNG, and unless for some strange reason you become a non tax resident, you will also be taxed in Australia, but you will receive a credit for the PNG tax*.

You really need to see an accountant.

*Edit - but you won't refunded any difference should the PNG tax be too high. The ATO will not reimburse you for the tax you paid overseas.

 

[stephenb465]

PNG work

Hi JPS

going to HV?

I work in PNG and have done for about 20 months,

Seems to be two options:

If you work with a large company in PNG you will pay 42% PNG tax and then you say good by tax money and take your net back to Australia.

or if you are a subcontractor and invoice your client, you pay 12% tax in PNG and then of course you make the difference with the Australia Gov.


But still the take-home money is still better than what you get in Australia even after the tax you may receive from your IP. So what I do is calculate how much I'd get back from my IP as tax money as if I was working in Australia and compare that with my net pay in PNG. And yes I'm still a winner

beside, I'm single and when I have my breaks, I travel

I'm no accountant so don't trust me and if you find a better way let me know

 

[JPS25]

Thanks Stephen,

He hasn't taken the job yet but if he does it will be working in Port Morsby at a mining site as project manager of the catering and accomadation side of things.
So generally you pay taxes in PNG at the rates over there, so do you still go to the tax accountant over here in OZ to put in your deductions for your IP?
Its our 1st IP and just done our first tax return with it in place without any hiccups. Just want to know as much as possible as to how it all works with the IP if he decides to take the job offered.

How does the tax credits work is that done as an offset sort of thing. We are trying to find out as much info first, he is away again now for the next two weeks at a mine site in QLD so wont be having a face on interview till home again. So far its just been by phone but he is meeting up with the main guy when he is home next.

Going the accountants again next week with my daughter so will ask Tim while there about it too.

Thanks everyone for your info it all helps we like to go in with our eyes open so good to know the good and bad sides to it all

Thanks JPS

 

[JPS25]

That's not how double tax treaties work, what it means is that you won't be taxed twice on the same income. You will be taxed in PNG, and unless for some strange reason you become a non tax resident, you will also be taxed in Australia, but you will receive a credit for the PNG tax*.

You really need to see an accountant.

*Edit - but you won't refunded any difference should the PNG tax be too high. The ATO will not reimburse you for the tax you paid overseas.

Hi MRY

Thanks for the info so if he recieves a credit for the PNG tax does that mean we can still claim any deductions both work related and IP related as normal. Or does that just get banked up and claimed when he is earning and paying taxes in Australia. I do know their tax year runs from Jan to Dec so will only be able to have credits for half a year to begin with.

Thanks for your help

JPS

 

[syba]

Thanks for the info so if he recieves a credit for the PNG tax does that mean we can still claim any deductions both work related and IP related as normal. Or does that just get banked up and claimed when he is earning and paying taxes in Australia.

You can't save up tax deductions and use them in other years. The tax deductions can only be claimed in the year they are incurred. Only Capital Gains Tax (CGT) losses can be carried forward into future years to offset a future capital gain.

 

[JPS25]

Thanks Syba,

The more info we get the better choice we will be able to make in whether he accepts the position over there.

Will definitly be talking to our accountant when I go in with my daughter next week. The position only came up after we had already been and done ours or we would have asked then.

I know he will be taxed in PNG $ and super also paid through PNG too but after tax dollars will be paid into his account over here. So we will have to find out fully how it then works as regards to it being dealt as an offset/credit as such. The only australian income will come from the rent recieved so any losses from the IP may be able to be put partly against that.

Thanks for you help

 

[JPS25]

Hi JPS

going to HV?

I work in PNG and have done for about 20 months,

Seems to be two options:

If you work with a large company in PNG you will pay 42% PNG tax and then you say good by tax money and take your net back to Australia.

or if you are a subcontractor and invoice your client, you pay 12% tax in PNG and then of course you make the difference with the Australia Gov.


But still the take-home money is still better than what you get in Australia even after the tax you may receive from your IP. So what I do is calculate how much I'd get back from my IP as tax money as if I was working in Australia and compare that with my net pay in PNG. And yes I'm still a winner

beside, I'm single and when I have my breaks, I travel

I'm no accountant so don't trust me and if you find a better way let me know

So Stephen,

Do you not claim any deductions at all for your IP?

I have read through the links on the ATO site about the tax treaty with PNG and other countrys and from what I can make out you get a tax credit for what you have paid in the PNG to the equivilant of what you would have paid here, and the access paid in PNG is not counted. Then you do your normal tax return and therefore should be able to claim deductions for your IP. I think I have read everything right though will follow it through with our accountant.

Any more info would be great thanks