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Australian Contractor working for Australian business living overseas

Newbie

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Hello, 

I currently work for a Australian business as a contractor doing building drafting. I am Australian citizen and resident for tax purposes currently. 
I am planning to go and live overseas (India) for few years which will make me Non-resident for tax purposes thereafter. I will still continue to work for Australian business as a contractor while staying overseas (India) 
my questions:- 

1: will there be any additional tax implications as I will be living overseas? 
2: can I claim deductions even if I am living overseas (India) like home office rent, fuel, stationary car expense etc

3: will I have to pay double tax in the country I will be living

4: will gst have any implications or need to consider anything? 
5: do I pay tax in Australia or India or both? 
please guide me and provide any other relevant information to consider before going overseas and working as a contractor for Australian business. 
thanks 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @Archiplanner

 

1. There won't be extra tax implications for living overseas as far as we're concerned, but living overseas may change your residency for tax purposes. This means your tax rate would change. You'll need to check your tax residency.

 

2. You can claim deductions for expernece you incur to earn your income. You can do this no matter where you are in the world. You'll need to check each category for expenses you plan to claim as a deduction.

 

3. You likely will need to pay tax in both India and Australia, but we have tax treaties to prevent double taxation with other countries, including with India. How and where you declare your income will depend on the tax treaty, so take a thorough read of the treaty with India.

 

4. GST will apply because the business you're contracting for is an Australian consumer. This means if your turnover is $75,000AUD or more, you'll need to register for GST and charge GST on the sale of your services.

 

5. You definitely need to pay tax here, but you'll need to check with the Central Board of Direct Taxes in India on if you need to pay tax there too. Again, we have a tax treaty with India to prevent the same income being taxed twice, but you'll need to check with them on your lodgment requirements. If you pay tax on your income in India, you can likely claim a foreign income tax offset on your Australian tax return for at least a chunk of the tax paid in India. This is how we help reduce double taxation.

 

You can read more about Your tax residency, deductions for business, tax treaties, taxable sales connected with Australia , and foreign income tax offsets on our website.

 

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @Archiplanner

 

1. There won't be extra tax implications for living overseas as far as we're concerned, but living overseas may change your residency for tax purposes. This means your tax rate would change. You'll need to check your tax residency.

 

2. You can claim deductions for expernece you incur to earn your income. You can do this no matter where you are in the world. You'll need to check each category for expenses you plan to claim as a deduction.

 

3. You likely will need to pay tax in both India and Australia, but we have tax treaties to prevent double taxation with other countries, including with India. How and where you declare your income will depend on the tax treaty, so take a thorough read of the treaty with India.

 

4. GST will apply because the business you're contracting for is an Australian consumer. This means if your turnover is $75,000AUD or more, you'll need to register for GST and charge GST on the sale of your services.

 

5. You definitely need to pay tax here, but you'll need to check with the Central Board of Direct Taxes in India on if you need to pay tax there too. Again, we have a tax treaty with India to prevent the same income being taxed twice, but you'll need to check with them on your lodgment requirements. If you pay tax on your income in India, you can likely claim a foreign income tax offset on your Australian tax return for at least a chunk of the tax paid in India. This is how we help reduce double taxation.

 

You can read more about Your tax residency, deductions for business, tax treaties, taxable sales connected with Australia , and foreign income tax offsets on our website.