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Freelancer working for international companies

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I am Australian but have not worked/been a tax resident here for several years. I am about to move back to Australia but will continue working as a freelancer for companies based in the UK and Europe, being paid into an English bank account. I will also do some work for Australian companies, for which I am paid into my Australian account. I also get paid by some clients via Paypal. 

 

Firstly, is this situation of being paid into multiple bank accounts (UK and Aus)/pay pal allowed? I presume if I keep records of payments going in and out and declare all these as income, it is fine? I also presume that it is the ATO I should pay tax to - even though 95% of my income is overseas?

 

Secondly, I also hold Italian residency. It is possible I will spend big parts of the year there. Will this impact my tax standing? If, for example, I spend 6 months in Aus and 6 in Italy, would I need to split tax between the countries?

 

Help! 

 

 

 

 

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Taxicorn

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@LT91 

 

It doesn't matter where you are being paid, as long as you keep all the records.

 

The most important decision is whether you will be considered to be an Australian Resident for tax purposes.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=AreYouAResident&anchor=AreYouAResident&anc...

 

https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/n75127-DE-5543_Residency-for-tax-purposes...

 

I believe that you would be considered to be an Australian Resident for tax purposes and as such would need to declare all of your worldwide income.

Any income earned overseas would be declared and depending on whether there is a double taxation agreement with that country you can apply a Foreign Income tax offset or any tax paid in that country. Basically prevents you from being double-taxed.

 

 

1 REPLY 1
Highlighted

Most helpful response

ATO Certified Response

Taxicorn

Replies 0

@LT91 

 

It doesn't matter where you are being paid, as long as you keep all the records.

 

The most important decision is whether you will be considered to be an Australian Resident for tax purposes.

https://www.ato.gov.au/Calculators-and-tools/Host/?anchor=AreYouAResident&anchor=AreYouAResident&anc...

 

https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/n75127-DE-5543_Residency-for-tax-purposes...

 

I believe that you would be considered to be an Australian Resident for tax purposes and as such would need to declare all of your worldwide income.

Any income earned overseas would be declared and depending on whether there is a double taxation agreement with that country you can apply a Foreign Income tax offset or any tax paid in that country. Basically prevents you from being double-taxed.