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Re: How to report payments received for completing jobs

Initiate

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Replies 4

Hi all,


I do occasional work for an organization. The work is remote/task based. Once I complete the task, I submit a form for the number of hours worked and I am paid at a fixed rate for that. I receive the gross-amount. This organization is the only payer and therefore 100% of this type of income. There is no super contributions or tax-withheld. I am not an employee of the organization. I have a regiested ABN which is used for this. No one else is involved in the work. The payments and work do not occur at fixed intervals. I think this falls under PSI income however I am unsure how to report it and whether it goes under the "Business/sole trader, partnership and trust income (including loss details)" section.

 

As a complicating issue. I reside overseas permanaetly, and am not a resident of Australia. I pay taxes in my local country however this is an Australian organization and the payments are going into an Australian bank account. I was wondering whether this also affects how I declare to the ATO?

 

Thank you very much!

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Most helpful response

ATO Community Support

Replies 3

Hello @Techno,

 

You will declare your income either at question14 Personal services income (PSI) or 15 Net income or loss from business, if your income is not considered PSI. To help you determine if your income is PSI please see Working out if the PSI rules apply on our website.

 

As a non-resident you will be required to pay tax on your Australian income at non resident rates

 

In limited circumstances you may not need to pay tax in Australia due to a tax treaty with your home country. 

 

How tax treaties work:
Each individual tax treaty specifies who holds the taxing rights, over different types of income, between two countries. 

 

If the country of residence has the sole taxing rights it will usually be expressed as 'shall be taxable only in that country or contracting state' 

 

Here is a list of tax treaties Australia holds with other counties

 

If you need help interpreting the tax treaty you can contact our early engagement team for an interpretation.

4 REPLIES 4

Most helpful response

ATO Community Support

Replies 3

Hello @Techno,

 

You will declare your income either at question14 Personal services income (PSI) or 15 Net income or loss from business, if your income is not considered PSI. To help you determine if your income is PSI please see Working out if the PSI rules apply on our website.

 

As a non-resident you will be required to pay tax on your Australian income at non resident rates

 

In limited circumstances you may not need to pay tax in Australia due to a tax treaty with your home country. 

 

How tax treaties work:
Each individual tax treaty specifies who holds the taxing rights, over different types of income, between two countries. 

 

If the country of residence has the sole taxing rights it will usually be expressed as 'shall be taxable only in that country or contracting state' 

 

Here is a list of tax treaties Australia holds with other counties

 

If you need help interpreting the tax treaty you can contact our early engagement team for an interpretation.

Initiate

Replies 2

Hi Kara,

 

Thank you very much. From using the tool, it says the PSI rules may apply.

 

I am also in a country that does have a tax treaty with Australia. I do not pass any of the 4 tests that would consider me an Australian residence for tax purposes. As well the amount I will make from this remote work will be minimal and certainly under the taxable threshold.

 

However I still have an ABN and work will be paid into an Australian bank account. 

Given this, when I file my return can I state I do not need to file again with the ATO, and instead file with my current country?

 

Thank you again for the help! 

 

 

ATO Community Support

Replies 1

Hi @Techno

 

Your country's tax treaty will tell you where your business income is to be reported - in your home country, or in Australia.

 

If it's in Australia, you'll need to include the income in your Australian return. If it's in your home country, you won't report it at all to us.

Initiate

Replies 0

Thanks that's super helpful!