2 July 2010

Working overseas – either personally or a family member?

Effective from 1 July, 2009 there have been changes to the disclosure requirements for Australian residents who have derived foreign employment income.  Generally speaking, if you or a member of your family will be living overseas for 2 years or less and have derived employment income (salary, wages, commissions, bonuses and allowances) from that country, it will need to be declared on your tax return from the 2010 financial year onwards.

Your foreign income will be taxed at normal marginal rates (plus Medicare levy and Medicare levy surcharge if applicable).  You may be entitled to a foreign income tax offset for amounts of foreign tax paid. It is important to note that the income derived while overseas may be paid by either an overseas or an Australian employer.

As a step to address the above, we suggest that you keep adequate documentation in relation to your foreign income earned for the 1 July to 30 June period each year. Bearing in mind that different countries have different financial years, you should ensure that you have payslips advising of your income earned, tax withheld, allowances paid etc at 30 June which will enable you to answer this item easily.

Note that in previous years, overseas employment income was often exempt from tax in Australia.

For more information please use the following links, or contact us with any queries:

Click here to determine whether you are an Australian resident for tax purposes

Click here for more information on foreign employment income

Click here for information regarding exempt foreign employment income

Click here to access our archived newsletters

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This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.

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