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tictacjunkie
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Joined: 30 April 2010
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Topic: Tax question Posted: 10 April 2011 at 11:32pm |
I've tried Googling but drawn blanks, as usual, lol, but how does paying tax work if you're living in NZ but working in Australia, for an Australian company, being paid in AUD? Eg if DH was to take a job working in Australia, a fifo position, three weeks there, two weeks home etc, the kids & I stay here, I don't work, his accommodation, food etc is provided while he's there. Not as a contractor. Does he pay tax twice? Or at a higher rate? Anyone in that situation? Thanks in advance.
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AandCsmum
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Location: Palmerston North
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Posted: 11 April 2011 at 9:10am |
If he's working for an Australian company then he'll pay tax via them. I don't think that matters where he lives. You can only be resident in one country & I think that is the one where you spend most of the time. He could possibly pay tax at a higher rate. Phone up the IRD or go have a meeting with them & find out what you need to do this end. Then phone the ATO in Australia and find out what he needs to do there. It will come down to residency rules. He won't be a resident I think cause you all aren't shifting. ATO Link This link will help a little bit.
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Kel
A = 01.02.04 & C = 16.01.09 & G = 30.03.12
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tictacjunkie
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Posted: 11 April 2011 at 9:32am |
Thank you, it is rather confusing seeing as we'd be living here, spending the money here, but he'd be mostly there. We're trying to decide if it's worth it, or if we'd be better off moving there for awhile (tax, living costs, kids school, our pets etc). He's currently overseas but employed by NZ company so a lot less complicated, though paid a lot less.
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fattykat
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Location: Hawkes Bay
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Posted: 11 April 2011 at 10:55am |
When we were in the same position, DP already had a Australian tax # (from a few years earlier) and paid all his tax there.
We had a Australian bank a/c with eftpos card and just used it here to draw money when needed.
For us doing it like that was easier.
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myonlineself
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Posted: 11 April 2011 at 12:14pm |
I would definitely suggest ringing the IRD - because its Australia it might be okay, but I have a friend in Italy (living there, working there and paying tax there), who has been told because she owns a house and has family in NZ, she's considered to be an NZ resident for tax purposes and has to be audited to she if she's paid 'enough' tax in italy or if she has to pay tax here too!
So yeah there are some funny rules that I'd definitely check out.
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KatzWtgn
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Posted: 11 April 2011 at 12:26pm |
It depends on the country, and whether NZ has a double-tax agreement with that country. I am pretty sure that we would have one with Australia (although I'm not an accountant, so as the others have said, it might pay to call the IRD and check).
The way that the double tax agreements work is that the two countries agree that you pay tax in each country only on the amount earned in that country, so that you don't end up paying it twice.
If there isn't a double tax agreement (I worked in the middle east for a while, and there wasn't one with that country), then if you are still deemed to be "domiciled" in NZ, then you have to pay NZ tax on your worldwide income.
But as I say, I am 99% sure that we ought to have a double tax agreement with Aussie.
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tictacjunkie
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Posted: 11 April 2011 at 5:30pm |
Thanks for that, I've found out that yes Australia does have an agreement with New Zealand. Our next concern is whether we'd have to pay capital gains tax on our house here, lol. Oh well, it's only a possibility at this stage. I've told DH the whole thing is making my head hurt & he can sort it out when he gets back to NZ. Actually he has a stopover in Australia on his way back, I should make him an appointment with the ATO. =)
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Shelt
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Posted: 11 April 2011 at 10:48pm |
If your house is here then you won't have to pay capital gains tax. New Zealand doesn't have a capital gains tax but if you were to buy a house in Australia and then sell it then you would be subject to capital gains tax.
I am an accountant and while I would still check this out with the IRD I think that your DH's income still needs to be returned in a NZ tax return but you can use the tax he has paid on that income as a credit against it in his return - so in effect he will only be taxed once on that income. Hope that makes sense. Basically you have to return it here coz he is still a NZ resident but only pay one lot of tax. However - if he has paid tax at a lower rate in Australia than the rate he would have otherwise paid here in NZ then you may have extra to pay.
Residency looks at a bunch of things other than where you are living at the time. If you have a house and family in NZ and come back here regularly then you are usually deemed to be still a resident of NZ. Which means that you have to return your "world wide income" in your tax return. But if you have earnt income and paid tax in countries we have a DTA (double tax agreement with) then you get to use those credits against that income in your NZ return. So effectively only pay tax once.
PM me if you have any other questions.
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tictacjunkie
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Posted: 12 April 2011 at 11:08am |
Yes that makes sense thank you! If he were to take a job in that situation I think I'd definitely use an accountant. Thanks, =). I really don't want to live there again, & he'd still be away from home for the same amount of time anyway, so it's not like I'd see more of him if we lived there, & I'd be away from our extended family too. Thanks everyone, =)
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