Working Abroad and Paying Tax: 3 Things to Consider

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Increasing numbers of Australians are choosing to work abroad while on extended holidays. Doing this can be a great way of extending your budget and your vacation. However, while you see the world, it is also important to keep on top of any tax payments so you can avoid any nasty bills when you return home. Below is a guide to 3 things you should do when working abroad.

Report all sources of income

Australian nationals who are living and working abroad need to complete an Australian tax return that declares all sources of income from within Australia and from foreign countries. Even if you are not actively working in Australia, you may still have some forms of income. Examples of possible income streams include:

  • Rent paid to you for a property in Australia
  • Dividends for shares registered in Australia
  • Interest on money held in an Australian bank account

You should also ensure that you have kept an accurate record of any the money you have earned while working abroad and that you are aware of the level of taxation to which you will be subject. An accountant will be able to assess your financial situation before offering further advice.

Claim for any tax exemptions

Many countries around the globe have signed tax treaties with the Australian government. These treaties are designed to ensure that Australian nationals working abroad are not subjected to double taxation. Double taxation occurs when earnings are taxed in the country it was earned in and in the citizen's home country. To prevent double taxation, you may need to claim a tax credit or an exemption. The precise details of tax credits and exemptions can vary from country to country, so it is best to consult with an accountant.

Claim for any benefits

In some foreign countries, certain state benefits, such as pensions and healthcare, are automatically deducted from your pay packet as part of your tax bill. If you decided to return to Australia before the end of a tax year, you might be able to claim a portion of what you have paid back, and this amount will be credited to your bank account. Again, the rules regarding the different taxation regimes of foreign countries can vary, so it is best to consult with a qualified accountant.

If you would like further information about completing your tax returns when working abroad, you should contact an accountant today.