Australian Based Pilots working at Atlas
Your tax position can be comfortably different to the next bloke doing the same job abroad. Residency is elaborate and couch surfing stateside may be high risk if commuting. A number of Hong Kong pilots were prosecuted. A number probably not caught. Most followed the tax rules as best they could. Our tax system is a self-declaration don’t forget.
Confident and cocky now, one thing is certain, a number of Australian pilots will eventually be heavily fined for not declaring foreign sourced income as Stateside pilots. Don’t get your tax advice from H&R Block and the Flight Deck!
Confident and cocky now, one thing is certain, a number of Australian pilots will eventually be heavily fined for not declaring foreign sourced income as Stateside pilots. Don’t get your tax advice from H&R Block and the Flight Deck!
Last edited by Gnadenburg; 12th Aug 2023 at 01:46.
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IMHO
If you are still a resident in Oz for taxation purposes, that is, you have investment properties, shares, renting your house whilst you’re gone, etc, and you have to submit a tax return because of that income coming in then you have to answer the question on your return about “have you earned income from any other sources……..”. If you answer yes to that question then you have to declare the income (from Atlas say) along with taxes already paid and the Oz guvmint will work out how much extra you need to pay them to make up the difference to the Oz rates of tax. Could land you with a hefty second tax bill. Of course as mentioned, it’s a self declaration system and most group certificates/income reports from large companies are sent electronically to the ATO now days. If you’re outside that system, which most share trading platforms and banks are not, then yes you could dodge it……maybe. Remember that if you’re sprung 10 years later they will ask for the money, plus interest of around 25%pa (compounding) and penalties if they think you were dodging, which you were, so a few hundred thou dodged could double or triple and become a million dollar tax bill (even more depending). So the answer is to cut ALL financial ties to Oz if you go to avoid all this. Easy done if you’re young, not so easy if you’re a bit older. Of course everyone is different so if your gonna go overseas then you need to speak to a financial advisor who is experienced in these matters, not your dodgy chain store mobs as previously mentioned.
I say again, get financial advice from a reputable, experienced and licenced financial advisor.
If you are still a resident in Oz for taxation purposes, that is, you have investment properties, shares, renting your house whilst you’re gone, etc, and you have to submit a tax return because of that income coming in then you have to answer the question on your return about “have you earned income from any other sources……..”. If you answer yes to that question then you have to declare the income (from Atlas say) along with taxes already paid and the Oz guvmint will work out how much extra you need to pay them to make up the difference to the Oz rates of tax. Could land you with a hefty second tax bill. Of course as mentioned, it’s a self declaration system and most group certificates/income reports from large companies are sent electronically to the ATO now days. If you’re outside that system, which most share trading platforms and banks are not, then yes you could dodge it……maybe. Remember that if you’re sprung 10 years later they will ask for the money, plus interest of around 25%pa (compounding) and penalties if they think you were dodging, which you were, so a few hundred thou dodged could double or triple and become a million dollar tax bill (even more depending). So the answer is to cut ALL financial ties to Oz if you go to avoid all this. Easy done if you’re young, not so easy if you’re a bit older. Of course everyone is different so if your gonna go overseas then you need to speak to a financial advisor who is experienced in these matters, not your dodgy chain store mobs as previously mentioned.
I say again, get financial advice from a reputable, experienced and licenced financial advisor.
Last edited by No Idea Either; 12th Aug 2023 at 02:02. Reason: Included banks as auto reporters to ATO
Gnads is correct, you might get away with it you might not. If the ATO are feeling generous you'll get a circa 100% fine on top of having to pay back the tax. The only fail safe way to go about this is to get a ruling from the ATO, that or move your family out of Oz and don't come back too often
CX pilots we’re getting away with claiming HK residency while living in Australia up the 1990s. Join CX, do a few years overseas and eventually obtain an Australian base. Quietly shift back and think being out of the country for more than six months of the year kept you out of the ATOs clutches.
This doesn’t work anymore with computer matching in Canberra. If you have a “significant presence” in Australia then you will be hit up for income tax. Basically if you maintain a home and have immediate family living in it, you are up for tax on worldwide income.
If you want to escape the net then have no property available for your sole occupation, take your family with you and carefully count the number of days you spend down under.
Most importantly have a good accountant give your arrangements the once over to avoid and mistakes.
This doesn’t work anymore with computer matching in Canberra. If you have a “significant presence” in Australia then you will be hit up for income tax. Basically if you maintain a home and have immediate family living in it, you are up for tax on worldwide income.
If you want to escape the net then have no property available for your sole occupation, take your family with you and carefully count the number of days you spend down under.
Most importantly have a good accountant give your arrangements the once over to avoid and mistakes.
A handfull of CX pilots claimed section 23AG (?) exemption and got sprung. The practice was not widespread, and most CX/KA Oz commuters did so for years - even decades - whilst remaining in the ATO’s good books.
My point, though, is that commuting from the US ought to be no different from a tax perspective, with the added benefit of the DTA between the US & Oz, unlike HK. Obviously everyone’s situation is different / get your own tax advice etc.
My point, though, is that commuting from the US ought to be no different from a tax perspective, with the added benefit of the DTA between the US & Oz, unlike HK. Obviously everyone’s situation is different / get your own tax advice etc.
Last edited by Verbal Kint; 12th Aug 2023 at 17:57.
IMHO
If you are still a resident in Oz for taxation purposes, that is, you have investment properties, shares, renting your house whilst you’re gone, etc, and you have to submit a tax return because of that income coming in then you have to answer the question on your return about “have you earned income from any other sources……..”. If you answer yes to that question then you have to declare the income (from Atlas say) along with taxes already paid and the Oz guvmint will work out how much extra you need to pay them to make up the difference to the Oz rates of tax.
If you are still a resident in Oz for taxation purposes, that is, you have investment properties, shares, renting your house whilst you’re gone, etc, and you have to submit a tax return because of that income coming in then you have to answer the question on your return about “have you earned income from any other sources……..”. If you answer yes to that question then you have to declare the income (from Atlas say) along with taxes already paid and the Oz guvmint will work out how much extra you need to pay them to make up the difference to the Oz rates of tax.
You can still own assets in Australia and be a non-resident for tax. Hundreds of thousands of people do.
The system was actually a gift if worked with legally but many pilot couldn’t get past their aversion for tax and missed investment opportunities. Some of those opportunities have been changed such as CGT breaks for expats.
I had residential and commercial property. I also made maximum concessionary and non-concessionary super contributions until maxed out which displayed an intent to return. Yet for 20 years I was legally a non-resident for taxation.
I think people are getting mixed up with proposed and stalled legislation which dramatically changes many peoples’ residency for taxation.
Do you have a mortgage or rental lease outside of Australia? A car? Other evidence of a life abroad. If you are couch surfing or spending a few nights in a hotel at your own cost every month, wife and kids back in Australia, you are a resident and the ATO could well be getting much better at discovering this. The scenario for single guys no different but may not be as visible.
I predict you’ll all eventually know a busted pilot commuter within 5 years. The blissful ignorance of taxation requirements is widespread.
The ATO claims it has advanced financial matching techniques with super computers. The evidence they do and it’s working, are reports this area is being expanded as it’s proving so lucrative, in recovering tax owed by Australians self-declaring otherwise.
Last edited by Gnadenburg; 12th Aug 2023 at 23:01.
The Australian tax system is basically an honesty box patrolled by Auditors. Unless you have a good Accountant that knows the system back to front you won't know what's legal until an auditor runs through your books. With modern banking, everything is linked and they have pretty much all your income/expenditure at their fingertips, what they will want in addition is your excuses for claiming, and or not paying tax, and then come back to you on whether it's right/wrong and how much you owe. If you are earning decent coin overseas it would be best to get proper advice from an accountant with experience in the area, as they say, negligence is not a defense, and depending on how much you owe and the auditor on the day you could be fined as well as owing tax. On the commuting aspect, is commuting paid for by the operator considered a fringe benefit and taxable? Repositioning for duty is definitely not, but commuting is a different concept in the tax world.
Under recent changes you need to be able to show a foreign tax residency as well if you want out of the ATOs clutches. Being a digital nomad used to be acceptable but now if you work from a laptop in multiple countries using tourist visas and have an Australian passport you are still considered liable even if you’re abroad for more than six months.
Basically you need to show you have established a formal residence abroad with an employment visa, business visa, residence permit etc.
IMO This is a step towards the US system where you are liable for income tax even if you live permanently outside the country and never visit, based on citizenship. It probably won’t happen in the next 5 years but in the next 20 I wouldn’t be so sure.
Basically you need to show you have established a formal residence abroad with an employment visa, business visa, residence permit etc.
IMO This is a step towards the US system where you are liable for income tax even if you live permanently outside the country and never visit, based on citizenship. It probably won’t happen in the next 5 years but in the next 20 I wouldn’t be so sure.
Commuting back to Australia whilst claiming non-residency for taxation, with no fixed abode abroad and lifestyle to go with it, will see a number of pilot scalps taken by the ATO.
Always fill in an Australian tax return if you intend returning.For the years I was overseas my accountant did a tax return when I earned income here.In the years I earned no income here my accountant filled out a zero income tax return.Then when I returned I slipped straight back into the system without query.So my advise is stay in the system.
