If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare any foreign income in your income tax return.
Foreign income includes:
• Foreign pensions and annuities
• Foreign employment income
• Foreign investment income
• Foreign business income
• Capital gains on overseas assets.
As your foreign income may also be taxed in the source country, it is potentially subject to double taxation. To overcome this, Australia has a system of credits and exemptions and has signed tax treaties with more than 40 countries, including all our major trade and investment partners. Click HERE to see the list of countries with which Australia has signed a tax treaty.
From September 2018, ATO will be receiving and exchanging financial account information with participating foreign tax authorities to ensure that Australian residents with financial accounts in other countries are complying with Australian tax law. If you have foreign income that you have not disclosed, you may be liable to penalties and interest charges.
If you’re not an Australian resident for tax purposes, you are only taxed on your Australian-sourced income, so you generally don’t need to declare income you receive from outside Australia in your Australian tax return.
Contact Expert Tax on 0449 952 855 or 1300 8 MY TAX for assistance in complying with your tax obligations.