Itís Your Money > Taxes

Australian Non- Residents Tax

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Marty:
In Australia Residents pay income tax:
$0 - $18,200 - No Tax
$18,200 - $37,000 - 19%
$37,000 - $80,000 - 32.5%
$80,000 - $180,000 - 37%
$180,000 and up - 47%

We also have Non-Resident tax:
$0 - $80,000 - 32.5%
$80,000 - $180,000 - 37%
$180,000 and up 47%

Non-Residents are people who live in Australia less than 6 months per year - Expatriates in other words.

There is a loop-hole which reduces your tax and that is any money you pay into superannuation is only taxed at 15% once you are over 55 and once you turn 65 it reduces to 0%.

My question is once I retire and move to the Philippines can I channel my income through my superannuation fund and then effectively reduce my Non-Residents tax rate to 15% and once I turn 65 will it be reduced to 0%?

If that doesn't work can people suggest ways they use to reduce their tax bills on income from Australia?

Travelling Bob:

--- Quote from: Marty on November 21, 2015, 12:32:07 PM ---In Australia Residents pay income tax:
$0 - $18,200 - No Tax
$18,200 - $37,000 - 19%
$37,000 - $80,000 - 32.5%
$80,000 - $180,000 - 37%
$180,000 and up - 47%

We also have Non-Resident tax:
$0 - $80,000 - 32.5%
$80,000 - $180,000 - 37%
$180,000 and up 47%

Non-Residents are people who live in Australia less than 6 months per year - Expatriates in other words.

There is a loop-hole which reduces your tax and that is any money you pay into superannuation is only taxed at 15% once you are over 55 and once you turn 65 it reduces to 0%.

My question is once I retire and move to the Philippines can I channel my income through my superannuation fund and then effectively reduce my Non-Residents tax rate to 15% and once I turn 65 will it be reduced to 0%?

If that doesn't work can people suggest ways they use to reduce their tax bills on income from Australia?

--- End quote ---


I can not suggest ways to reduce your tax .  My understanding is you will not be able work here unless you have work permit. There is not enough work here for the locals and the wage is very very low compared to our wage, like day  rate is about $A6, yes thats right. Workers building roads thats their rate

Bob

Marty:
Thanks Bob but I think your missing the point of my question.

Say I was your average working drone in Australian earning $50,000 per year and paying Australian Residents tax - assume no tax deductions. I would be paying $7797 tax per year.
Say I as a working drone then turn 55 and then start channeling all but the tax free part of my income through my Superannuation. I would then be paying $4770 tax.
I then later turn 65 and channel all but the tax free part of my income through Superannuation. I would then be paying $0 tax.

Now think about an Australian Expat who has income from investments and pensions and say they earn him $50,000 per year, he has to pay Australian Non-Residents tax on that income at 32.5%. His tax bill will be $16,250.
That is $1355 Australian or $1000 US per month he is paying in tax.
Do you think he would be a fool if he did not ask how he can minimize this?
That is all I am asking as I am sure this has occurred to other Australian Expats out there and hopefully some of them have found ways around it or to minimize it.
Legal ways please, I don't want the Australian Tax Office seizing my assets and freezing my pensions.

Also when I retire to the Philippines it will be to retire and if I need some work done I will quite happily pay a local to do it for $6 a day. I have no intention of working in the Philippines unless it is a hobby like home brewing, recreational gardening or recreational fishing.

iamjames:
My tax was paid in Ireland. My pension was earned and is paid from Ireland. On this basis I cannot claim Non-resident status. I tried  :'(

Marty:
G'day James, I take it your Irish.
I was looking at the news today and the US government are worried that the US drug company Pfizer are planning to buy the Irish company that owns Botox which has its HQ in Ireland. They US government think Pfizer will try and move its HQ to Ireland.
Apparently the US company tax rate is 25% and in Ireland it is 12.5% and Pfizer will save $2,000,000,000 in taxes by making the move.
May be I should try moving my pension to Ireland, 12.5% sounds pretty good to me compared to 32.5%.

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