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hav(Enthusiast)Enthusiast
3 July 2022

Hello.

 

Would appreciate any input please, on how to file my tax return for FY21/22 given my scenario below:

  • 01/07/2021 till 23/12/2021: Australian resident for tax purposes.
  • 24/12/2021 onwards: Moved permanently to Singapore, and tax resident in Singapore
  • Contracted to the same employer in Australia, but working remotely from Singapore after the move.
  • Have received guidance that as I am still working for an Australian employer, but a foreign resident residing overseas and performing the work overseas, my income following the move will be deemed foreign-sourced and isn't reportable in Australia. My employer doesn't need to withhold tax from my employment income.
  • My employer continued with existing PAYG arrangements after the move, meaning pre-fill details sent to ATO reflect my reportable and non-reportable income and withheld tax for the full financial year.

Even though I enter the dates of non-residency in my tax return, the system does not pro-rate the gross income, although an ATO officer I spoke with said it would.

 

(1) How should I complete my tax return so the over-held withholding tax from 24/12/2021 gets returned?

 

Should I manually edit to accurately reflect that my gross is actually half of what’s pre-filled, while the withheld tax remains unchanged? Example:

  • Gross: $50,000 instead of $100,000
  • Withholding tax unchanged at $30,000

 

Or is there another channel to apply to ATO for the return of this over-held withholding tax?

 

(2) How do I/my employer go about stopping PAYG arrangements for FY22/23?


Thanks in advance.

 

Regards,

hav

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21 replies
818 views
21 replies

Most helpful response

Most helpful replyATO Certified Response

RenATO(Community Support)Community Support
ATO Certified Response5 July 2022

Hi @Hav,


  1. Changing the amounts in your tax returns will create issues and trigger an audit of your lodgement. If the income statement is wrong then, your employer needs to correct it, so the right information is reflected in your tax return.
  2. Your employer will need to stop withholding from your income if there's no longer an obligation to withhold tax. They can go back and amend the amounts of PAYG that they reported to us. They'll get a credit and can work out how to pay your entitlements.
  3. I would recommend if you haven't already done so, to go through Are you an Australian resident for tax purposes? to confirm your residency status from the 01/07/21 - 23/12/21.

All replies

Most helpful replyATO Certified Response

RenATO(Community Support)Community Support
ATO Certified Response5 July 2022

Hi @Hav,


  1. Changing the amounts in your tax returns will create issues and trigger an audit of your lodgement. If the income statement is wrong then, your employer needs to correct it, so the right information is reflected in your tax return.
  2. Your employer will need to stop withholding from your income if there's no longer an obligation to withhold tax. They can go back and amend the amounts of PAYG that they reported to us. They'll get a credit and can work out how to pay your entitlements.
  3. I would recommend if you haven't already done so, to go through Are you an Australian resident for tax purposes? to confirm your residency status from the 01/07/21 - 23/12/21.

hav(Enthusiast)Enthusiast
7 July 2022

Hello @RenATO ,


Thanks heaps for the reply.


As advised, I re-did the residency test using the link you sent, and results were the same - part year Australian resident from 01/07/2021 - 23/12/2021.


So from 24/12/2021 onwards, I understand I am tax resident in Singapore, and with the work being performed in Singapore, my income is foreign-sourced and taxable in Singapore but not Australia.


Clarifying the suggested actions:

  • Don't edit the pre-fill data in the tax return.
  • Have my employer stop reporting my foreign-sourced income and stop withholding tax for FY 22/23
  • For the tax amounts already withheld in FY 21/22
  1. 01/07/2021 - 23/12/2021 - no change
    1. 24/12/2021 - 30/06/2022
  • Employer has to amend the amounts of PAYG reported to ATO
    • ATO will credit the unnecessarily withheld tax back to my employer
    • Employer returns the unnecessarily withheld tax back to me

If you don't mind, some further queries, please:

  1. When my employer makes amendments to the amount of PAYG reported, should the Gross reflect only what's reportable and taxable in Australia? Example: Instead of full FY 21/22 gross of $100,00, only reflect gross of $50,000 paid from 01/07/2021 to 23/12/2021
  2. When my employer amends the tax withheld reported to ATO, do they reflect what should have been withheld, rather than what was actually withheld? Example: Amend withheld tax to $10,000 instead of the actual $30,000, so ATO knows to credit $20,000 to my employer (I suspect if the actual $30,000 withheld tax is reported, along with only reportable/taxable gross of $50,000, then ATO would end up retuning the unnecessarily withheld tax directly to me).
  3. Do I wait for the employer amendments to flow into the tax return pre-fill data before submitting my tax return?
  4. Given that it's only after I submit my tax return that the ATO will validate the income paid by my employer from 24/12/2021 to 30/06/2022 is foreign-sourced, not reportable and not subject to Australian tax, is there something I can provide to my employer before I submit my tax return so they recognise the actions in (b) are valid and ought to be carried out?

Thanks a lot.

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How to complete FY21/22 tax return for part-year tax-resident who has since migrated?? | ATO Community