I previously lived in the UK for a number of years, working remotely for the same employer. Last October I came over to Australia and since then continued to have my monthly salary paid into my UK bank account (with UK PAYG tax withheld). Originally I planned to return to the UK but in recent weeks I have decided to reside in Australia permanently while continue working for the same company, as an independent contractor instead of an UK employee. In this arrangement I will send them an invoice in AUD at the end of each month. I still remain unclear what my employer and I need to do in regards to this, even after readong the ATO Community article "What remote working means for your tax return" (https://community.ato.gov.au/s/article/a079s000000aripAAA/what-remote-working-means-for-your-tax-return). As I will likely now be an Australian tax resident, I need to find out how the following applies :
"In Australia, you’re taxed on world-wide income. Your employer *must* withhold tax under PAYG withholding...You’ll receive a foreign income tax offset when you lodge your return". However, on the page "Pay as you go and foreign employment income" (https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/foreign-employment-income-and-section-23ag-employees/pay-as-you-go-and-foreign-employment-income) it has "Australia's PAYG withholding system doesn't apply to foreign employers that don't have 'a sufficient connection with Australia.'"; it states that after my tax return I will be advised on "how much to pay in instalments in the following income tax year." Will PAYG witholding apply to me then or not? Is it just after I lodge my tax return that PAYG witholding will apply?
355 views
1 replies