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Re: Taxation and GST - Foreign Company Working in Australia

Newbie

Views 88

Replies 1

Hello, 

 

I have a few questions regarding my future situation. I am currently living and working as a FT employee in the UK. I want to return home and my current employer is OK with that and wants to keep me on, contracted to the company Full-Time. A few facts:

 

  1. I am a Australian and British Dual Citizen. (Aus by birth)
  2. Once I leave the UK I will have no permanent residence in the UK. I do not own property here (nor in Australia)
  3. My employer wants to continue our arragement except under contract (more details as I get them)
  4. I assume for now that I will continue to be paid in GBP to my British bank account.

My questions:

 

  1. Are there any "double tax" issues with the above situation? (Working in Aus, paid in GBP etc)
  2. Should I ask to be paid directly in AUD to an Australian bank account to simplify tax issues?
  3. GST: I read the table here about what constitutes an employee vs a contractor. If I am employed a full 40hrs a week and am restricted from working for other clients, does this mean I am an employee even though I am contracted? If so, does this mean that GST does not need to be paid?
  4. To avoid GST, does this mean the employer has to pay income tax directly? Or is this something I can do later?
  5. Going back to question 1: If I am being paid in Pounds into a British bank account, does this mean income tax is paid out there? If so, how does this work with Australian income tax?

Essentially, I'd prefer to just work for the one company, under contract, and not have the GST complicating the issue. But not entirely sure what to request with regards to how to structure being paid. Clearly, I don't want to be taxed twice, nor pay GST myself.

 

Thanks!  

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hiya @wdc123,

 

I'll break your questions down the way you have asked them and respond to them one by one, to help make it easier to read.

 

  1. Are there any "double tax" issues with the above situation? (Working in Aus, paid in GBP etc)
    • You would be an Australian resident for tax purposes. Which means you would be taxed in Australia.
  2. Should I ask to be paid directly in AUD to an Australian bank account to simplify tax issues?
    • If this would make it administratively easier for yourself and your employer, it is an option for you. But it’s not something we can provide advice on.
  3. GST: I read the table here about what constitutes an employee vs a contractor. If I am employed a full 40hrs a week and am restricted from working for other clients, does this mean I am an employee even though I am contracted? If so, does this mean that GST does not need to be paid?
    • The first thing to look at for this question is whether you are an employee or a contractor. It’s not a choice you can make. You are either one, or the other. There is a tool on our website that can help you work that out. I will provide a link below.
    • If you are a contractor, and your turnover is higher than 75k, you are required to be registered for GST. The sales you make to the UK based company may not attract GST, depending on the situation, again I will provide a link below. If the sales are GST free, you would be required to lodge a nil activity statement.
  4. To avoid GST, does this mean the employer has to pay income tax directly? Or is this something I can do later?
    • If you are an employee, your employer would have to register for PAYG withholding and report your income tax directly to the ATO. They may also have superannuation obligations
  5. Going back to question 1: If I am being paid in Pounds into a British bank account, does this mean income tax is paid out there? If so, how does this work with Australian income tax?
    • If your employer reports your salary/wages correctly to us, it’s not a problem if the actual payment goes to an offshore account.

If there is anything else you would like to know, please don't hesitate to ask.

 

How to work it out: employee or contractor.

GST: Other Exports.

Working out if you have to pay super.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hiya @wdc123,

 

I'll break your questions down the way you have asked them and respond to them one by one, to help make it easier to read.

 

  1. Are there any "double tax" issues with the above situation? (Working in Aus, paid in GBP etc)
    • You would be an Australian resident for tax purposes. Which means you would be taxed in Australia.
  2. Should I ask to be paid directly in AUD to an Australian bank account to simplify tax issues?
    • If this would make it administratively easier for yourself and your employer, it is an option for you. But it’s not something we can provide advice on.
  3. GST: I read the table here about what constitutes an employee vs a contractor. If I am employed a full 40hrs a week and am restricted from working for other clients, does this mean I am an employee even though I am contracted? If so, does this mean that GST does not need to be paid?
    • The first thing to look at for this question is whether you are an employee or a contractor. It’s not a choice you can make. You are either one, or the other. There is a tool on our website that can help you work that out. I will provide a link below.
    • If you are a contractor, and your turnover is higher than 75k, you are required to be registered for GST. The sales you make to the UK based company may not attract GST, depending on the situation, again I will provide a link below. If the sales are GST free, you would be required to lodge a nil activity statement.
  4. To avoid GST, does this mean the employer has to pay income tax directly? Or is this something I can do later?
    • If you are an employee, your employer would have to register for PAYG withholding and report your income tax directly to the ATO. They may also have superannuation obligations
  5. Going back to question 1: If I am being paid in Pounds into a British bank account, does this mean income tax is paid out there? If so, how does this work with Australian income tax?
    • If your employer reports your salary/wages correctly to us, it’s not a problem if the actual payment goes to an offshore account.

If there is anything else you would like to know, please don't hesitate to ask.

 

How to work it out: employee or contractor.

GST: Other Exports.

Working out if you have to pay super.