Australian taxation

The annual dates for the Australian income year are from 1 July to 30 June. This is important to note for anyone moving to the country as these dates may not coincide with those from your home country.

The subject of taxation in Australia can be fairly complex and can mean surprisingly high cost to new migrants. Non-residents in Australia pay a much higher personal income tax rate – nearly double that of residents.

For instance, a resident will pay nothing for his or her income up to $6000 and then just 15 cents for every $1 from $6001 – $34,000. A non-resident will pay a 29 cent flat rate for every dollar made, beginning with $1 and continuing to $34,000.

The Australian government has a plan called ‘Pay As You Go’, or PAYG, which allows the taxpayers, be they business or individual, to incorporate tax payments throughout the year. This is a voluntary programme designed to help people stay on top of their annual tax bills.

Advantages for non-residents

There are still advantages for those who hold the status of a non-resident in Australia. Both residents and non-residents will declare all of their income on their tax forms and be allowed to take their entitled deductions.

A non-resident is not subject to the same capital gains taxation as a resident. A non-resident will also not be taxed on income that he has that is not being generated within Australia or does not have a genuine Australian connection.

You may be able to minimise your income tax by a timely move to Australia, as the resident versus non-resident status is very important. The timing of that non-resident status as it relates to an incoming windfall may be played out to your best advantage, but will require the help of tax strategists who are well-versed in Australian tax law.

If you are planning to move a company to Australia, there are many rules that will come into play; however, one steadfast principle is that a basic income tax rate for companies stands at 30%.

Australia holds a taxation relationship with New Zealand. If a person should have residency status in both of these countries they are given the chance to make the choice as to which country to allow their residency status.