Tax :/

[dme]

Hoping someone who knows there tax can help with this query. If i moved to Australia and started work here at the start of May, do i need to include any of my SA earnings before May in my tax return?

 

Secondly what happens with my existing investments and interest earned in SA, how do they get taxed?

 

What confuses me is that SA tax year starts in Mar and Aus starts in July.

[monsta]

I am no tax expert...  but there is a double taxation agreement between South Africa and Australia

 

http://www.treasury.gov.au/Policy-Topics/Taxation/Tax-Treaties/HTML/Income-Tax-Treaties

 

There is an explanation of what a tax treaty means here:

https://www.ato.gov.au/General/International-tax-agreements/In-detail/What-are-tax-treaties-/?page=5#Who_is_affected_by_a_tax_treaty_

 

My understanding is the tax treaty is the two countries agreeing on which country to pay specific taxes in... to minimize people being double taxed. 

 

But I am not an accountant or tax lawyer... so I can't tell you which specific items should appear on your tax return to South Africa and which to Australia.

 

So, you might want to contact the ATO.... be prepared for a long wait on the phone....

https://www.ato.gov.au/About-ATO/About-us/Contact-us/

 

But as always  NB! on this one...   keep records, so you can explain in 3-5 years why you filled in what you did. Filling in the wrong stuff is one thing, but you don't want to make it look like you were cheating on your tax return. So, if you can explain why you thought what you did was correct, they may go a lot easier on you and give you a chance to correct it and pay the back taxes (if any).

 

And yes, they often follow up... sometimes 5 years later. So, don't think that just because they didn't send you a letter or call you about it for a year, then its all ok.

 

To see what you need to keep and for how long, see:  https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Keeping-your-tax-records/

 

Oh and I haven't used one... but there are lots of tax agents who do work for individuals here in Aussie... e.g. https://www.itp.com.au  Many Aussies have shares, property, etc... so they want to maximize any refunds due to them. So, they feel the tax agent's fee is worth it.  But on this site, we always tell people to use a registered migration agent... and the same applies here... use a registered tax agent... https://www.tpb.gov.au/search-register

Edited July 10, 2017 by monsta

[WayneAndMel]

Hi @dme. Per my understanding you would only start being liable for tax in Australia from the period you landed and began your residency with the intention of staying. So you'd first pay tax in Australia on your Australian salary for May and June.

 

You'd however also have to work out tax on your SA investments earnings from the day you landed in Oz until 30 June 2017. As noted elsewhere on these boards you'd have to calculate the SA tax that is effective against that SA investment income in that time span. Then, if it is less in AU $ than the Oz tax calculation you'd also have to do you'd owe the difference. If you paid more SA tax (in AU $) than in the Australian tax calculation you don't have to pay additional. This will likely also apply going forward in tax years to come.

 

You will however have to declare such income and ensure you claim correctly to allow for the double taxation offsets. That unfortunately is where the trickiness is - completing the admin itself correctly and may require some help to give you peace of mind as the methods of calculating such tax will not be the same between SA and Oz.

 

However don't forget your SA tax return you'll have to do next year. It's good that you left less than three months into the SA tax year (Starting 1 March) as then you fail (you want to fail it!) the South African physical presence test for tax inclusion within SARS' ambit.

 

That's because if you had spent more than 91 days in SA during the SA tax year then it exposes you to potentially additional SA tax and double taxation complications on top of your Oz earnings and tax. You've luckily avoided this headache in your SA tax returns in future because as a general rule too, SA income tax rates are more onerous than Australian ones.

 

Especially as the SA state becomes more predatorial in its lust for tax money to fund its escalating corruption and welfare pressures.