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Oz tax for a pilot with a domestic Chinese Carrier

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Oz tax for a pilot with a domestic Chinese Carrier

Old 28th Apr 2017, 08:28
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Oz tax for a pilot with a domestic Chinese Carrier

Hi All,

Could anyone who works for Chinese domestic airline and commutes to live in Australia PM or post their understanding of the tax liability in Oz?

If tax is paid by the Chinese Airline are you exempt from Oz tax under the Aust/Chinese Tax agreement?

Is there a difference for pilots employed to fly internationally or domestically?

Cheers
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Old 28th Apr 2017, 09:41
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Most Chinese airlines pay income tax for you in China, and the agreed salary is truly net.
Some however cheat tax liability to some extent.
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Old 28th Apr 2017, 10:27
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I would have thought it depends where you are resident?
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Old 28th Apr 2017, 12:12
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These sites are pretty good to find out lifestyle and conditions at some of these gigs...., taxes is a topic that's best discussed with a tax professional. Some pilots have gotten caught already being a little "too smart" for their own good.
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Old 28th Apr 2017, 18:43
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Yes it depends where you live. If your country has a treaty on double taxation with China, and doesn't further tax your income, then you're fine.
France does tax all world income, USA after a certain amount. Germany doesn't. It depends.
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Old 29th Apr 2017, 02:06
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How many days a (tax) year do you spend IN Australia? As recommended, you need to see a tax professional who is conversant with your kind of situation, many are NOT, so check out their scope first. You may well find an Australian/Chinese accountant is your best bet and there are plenty of them.
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Old 29th Apr 2017, 06:51
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Days in Australia don't have any relevance now. The ATO use a residency test to determine if you are a resident for tax purposes. If you are then you can claim any tax paid in China as a credit then any additional that would have been paid if the same income was earnt in Australia must then be paid to the Australian tax dept.

The important thing for a Job in China ( if residing in Australia ) would be determining what tax is actually paid in China ( and can be claimed as a credit ) and what type of documention the company will provide as evidence of payment.

Australian taxation is all about self assessment. So you can do what you want, however if you get audited you need to be ready to prove you have complied with the law or face some eye watering fines and back taxes!!!
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Old 29th Apr 2017, 07:19
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Originally Posted by drifter3
Hi All,

Could anyone who works for Chinese domestic airline and commutes to live in Australia PM or post their understanding of the tax liability in Oz?

If tax is paid by the Chinese Airline are you exempt from Oz tax under the Aust/Chinese Tax agreement?

Is there a difference for pilots employed to fly internationally or domestically?

Cheers
The following is an excerpt from the Australian Chinese Dual Tax Agreement. My understanding is that you have to be involved in international operations out of China ( not domestic) to apply paragraph 3. For instance if you live in Australia and fly for say China Southern in international operations, then you are OK. But flying for a Chinese domestic carrier in my opinion would not satisfy the exemption in paragraph 3. I'm no tax expert though. If you are yet to embark on the project, best get an ATO tax ruling. That's what quite a few China Southern pilots did.



Article 15

Dependent personal services

1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by an individual who is a resident of a Contracting State in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived from that exercise may be taxed in that other State.

2. Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any consecutive period of 12 months;

(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of that other State; and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in that other State.

3. Notwithstanding the provisions of paragraphs (1) and (2), remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, shall be taxable only in the Contracting State of which the enterprise is a resident.
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Old 29th Apr 2017, 14:20
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Originally Posted by safelife
France does tax all world income
No they don't.
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Old 5th May 2017, 00:17
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Codpiece,

Thank you. Thats what I was looking for.
My interest is if I would be taxed as a domestic pilot? The "International Operations" part is the concern.

If we are relating everything to Australia and the ATO, then would every flight outside of Australia be classed as "International operation"?

Another thought is: Why would a CSA pilot based in Oz and operating in/out of Oz be not liable for tax. Whereas, a domestic pilot flying in China, who never operates to/in Australian airspace is taxed?

Thank you all for your replies. Just trying to gather as much info/opinions before committing to move back to Australia.
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Old 5th May 2017, 21:54
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You will get away with dodging the correct amount of Aussie tax right up until the moment you are audited.

Unfortunately the days of pilots working overseas operating in the grey areas are over...the ATO is on to it (as mentioned above in the "test for Australian residency for tax purposes")

The advice to go and pay for expert professional tax guidance is sound. You may not get the story you want to hear ("No Aussie tax for you mate! You've already paid the Chinese!!!) but it might save a lot of sleepless nights and protect you from those 'eye-watering' back taxes and penalties should you be found out to be in criminal non-compliance.

PG

Last edited by Popgun; 6th May 2017 at 05:51.
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Old 6th May 2017, 08:14
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3. Notwithstanding the provisions of paragraphs (1) and (2), remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise (for example China Southern) of a Contracting State ( China) in international traffic (I would interpret this as anywhere outside of China), shall be taxable only in the Contracting State (China) of which the enterprise (China Southern) is a resident (China)

I've entered my comments in brackets. IMHO I wouldn't bother with a tax professional . I'd just get a ruling from the ATO for peace of mind. As I mentioned many CSA pilots have already done this.

If this paragraph doesn't apply to you and you are an Australian tax resident, I would imagine some top up tax would be applicable. Unfortunately many Chinese airlines are in low tax areas and pay bugger all tax which doesn't help. It may be worth asking an agent ( like GABS or Longreach) for an example of a Chinese payroll tax certificate ( which will be in Chinese unfortunately ).
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Old 6th May 2017, 09:57
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The answer to the OP's question seems to be answered in Article 15.
For aircrew in domestic operations paragraphs 1&2 apply.
For aircrew in international operations only paragraph 3 applys.
You can work it out for yourself with a bit of application. In my experience neither accountants nor the tax office are willing to give you a watertight statement.
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Old 11th May 2017, 09:02
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In answer to the original posters question, I am not sure as I fly internationally. I do know however, once a year I take a trip to the tax office here in Beijing and give them my passport. Within 2 mins they have printed off a tax certificate. I average about 23kAUD/month net and pay approx. 13kAUD/month Chinese tax every month. The ATO sees me as an Australian resident as I have a house there, family live there and my intention is to be there as much as possible. I submit a tax return every year and have never had a problem.

Last edited by FlyingUpsideDown; 11th May 2017 at 22:22. Reason: Wrong city
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