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Migration to Australia | Tax Residency Status | Past Year Tax Returns

Newbie

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Replies 1

Hi everyone,

I've just flew into Australia from Malaysia on 3rd April 2020 this year. Previously, I've only been working in Malaysia and paying taxes in Malaysia until 30 April 2020 (I've already received my tax clearance letter from Malaysia Tax Authority). I've used up my remaining annual leaves with my previous employer in Malaysia to be able to fly to Australia on 3rd April 2020 to get myself ready for work in Australia on 1st May 2020. From 1st May onwards, I started work in Australia and am paying income tax to the ATO.

Previously in 2009, I studied for 1 year in Australia as a student and had an Australian Tax File Number since then. I also have an Australian bank account (shared name with my parents) and have earned interest income on term deposits from the bank since 2009 until present. Withholding taxes have been deducted by the Australian bank.

When I flew into Australia in April 2020, I just linked the TFN to MyGov account. And I noticed that when I clicked the ATO link, there are some overdue forms from FY2009 until present which I need to submit.

With the situation above, can you tell me the effective date I'm considered a tax resident in Australia? Please note that I've received my PR grant letter (visa subclass 189) effective 16 October 2018. I've made my first entry in Australia with the PR sometime in 2019 just for a short holiday.

In my opinion, the above situation can be split into 4 time periods and I've listed the questions for each period:

1. FY2009 & FY2010: Since I was an international student studying in Australia just for 1 year, I should be considered a temporary resident. I have a TFN number then. My parents transferred money over to the Australian bank account which I opened during my time in Australia. Do I have to file taxes for these 2 financial years? I was not doing any part time work then. Only earning some interest in the bank account. Kindly note that banks do not keep more than 7 years records so I can't retrieve the interest amount received back then. Do I still need to lodge a tax return or can I submit Non-Lodgement Advice instead for these 2 years?

2. FY2011 to FY2018: I'm a Malaysian citizen, working and paying taxes in Malaysia during this period. I'm not a tax resident in Australia. However, I have earned interest on term deposits held in an Australian bank account during this period, which the bank has already deducted non-resident withholding tax of 10% every year. Do I still need to lodge a tax return or can I submit Non-Lodgement Advice instead for all these years?

3. FY2019: I'm still residing and working in Malaysia. I'm still not a tax resident in Australia. Since 2009 to 2019, I did not provide my TFN number to the Australian bank (where I held my term deposits). In January 2019, I'd informed the bank to change my home address from Malaysia to my relatives' address in Australia so that my new debit card / letters can be sent to my relatives. This caused some complications and has led to my interest income in said Australian bank being taxed and deducted at 40% (TFN Withholding Tax rate) instead of Non-Resident Withholding Tax rate of 10%. Do I still need to lodge a tax return or can I submit Non-Lodgement Advice instead for this year? Is it also possible to claim the Withholding Tax difference back from ATO?

4. FY2020: I was working for a Malaysian company until 30 April 2020 and paying Malaysia taxes until then. Because my new job in Australia starts on 1st May 2020 and with travel restrictions & quarantine rules in place, I had to travel to Australia earlier (3rd April 2020) but worked remotely for my Malaysian employer until 30 April 2020. I have provided my TFN number to the bank from 1 May 2020 onwards. From which date am I considered an Australian tax resident?

Thanks in advance!
1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @kktc,

 

Thank you for reaching out to us. In relation to your residency you would have been a non resident for tax purposes when you left Australia. As long as the bank has your TFN and overseas address they will withhold the 10% tax on your bank interest, you do not have to report this to ATO. So you will be an Australian resident for tax purposes from the time you arrived back in Australia. You will need to report worldwide income from this date.

 

Hope this helps.

 

Regards,

Jodie2.

 

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @kktc,

 

Thank you for reaching out to us. In relation to your residency you would have been a non resident for tax purposes when you left Australia. As long as the bank has your TFN and overseas address they will withhold the 10% tax on your bank interest, you do not have to report this to ATO. So you will be an Australian resident for tax purposes from the time you arrived back in Australia. You will need to report worldwide income from this date.

 

Hope this helps.

 

Regards,

Jodie2.