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Payment of an overseas contractor without ABN in Australia - Tax question

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Newbie

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One of the presenters did a conference (via skype but for a class in Australia) and it's time to organise payment. It's only an AU$100 invoice but the person lives in the USA. Do we need to retain 49% for tax for such a little amount?   

Thanks in advance! 

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Community Support

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Hi @Francis,

 

Thanks for asking your question to our Community!

 

We don't have all the information to tell you yes or no but we can direct you to some useful information to help you make your decision.

 

Generally speaking, there are limited circumstances where payees do not need to supply you with an ABN, for example when:

  • income is exempt
  • payee is not required to pay tax due to a tax treaty
  • payee is a foreign resident and does not carry on an enterprise in Australia.

More information about foreign resident withholding obligations is available on the ATO website.

 

Hope this helps.

 

3 REPLIES 3

Devotee

Replies 1

Hi Francis.

 

So I hear that you had someone work for you, but they are not your employee and they are not an Austrlian resident.

Payments you don't withhold from.

 

What applies in this situation is the paragraph 'the supplier is not carrying on an enterprise'.

 

Perhaps check they are eligable or required to have an ABN.

Apply for ABN

 

Please note this is my personal view; I’m an ATO employee who chooses to help out here in my own time.

Best answer

Community Support

Replies 0

Hi @Francis,

 

Thanks for asking your question to our Community!

 

We don't have all the information to tell you yes or no but we can direct you to some useful information to help you make your decision.

 

Generally speaking, there are limited circumstances where payees do not need to supply you with an ABN, for example when:

  • income is exempt
  • payee is not required to pay tax due to a tax treaty
  • payee is a foreign resident and does not carry on an enterprise in Australia.

More information about foreign resident withholding obligations is available on the ATO website.

 

Hope this helps.

 

Newbie

Replies 0

Thanks Dinamo!

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