by Liina Kalmet
With the opportunities that globalisation brings, it is increasingly common for people to hold assets overseas, move to a different country or become a dual citizen.
If you, or someone you know has income-producing investments located outside of Australia such as bank deposits, shares or rental properties, receive an overseas pension, or simply decide to temporarily work abroad, then this will apply to you.
Do I have to report income I receive from overseas?
Australian residents are generally taxed on their worldwide income from all sources. This means that if you are an Australian resident for tax purposes, you are required to declare any foreign income in your income tax return.
Why is this more important than ever?
Tax data sharing between jurisdictions is high on the agenda for tax authorities all around the world. To combat this, a new single global Common Reporting Standard (CRS) was put in place, effective from 1 July 2017.
Under this standard, the Australian Taxation Office (ATO) receives financial account information on Australian residents from other countries’ tax authorities to ensure Australians with offshore accounts are complying with Australian tax law.
Australia has implemented exchange agreements with 51 foreign jurisdictions for collecting, reporting and exchanging financial account information of foreign tax residents.
In July 2018, the ATO will receive the first reports containing information dating back to 1 July 2017, so to avoid potential penalties and ensure compliance, it is more important than ever to disclose your foreign income to the ATO.
If you are unsure if this affects you or need help with anything else, then the BHR Papalia team would love to hear from you.