QANTAS Singapore Basing
Are you an Australian Resident for Tax purposes?
I find the whole tax debate question between Singapore and Australia quite interesting and to some extent misleading. Considering the number of Australians living and working there and paying tax there, I really can’t see any difference to QF pilots living and working there. The only question is how the Singaporean Taxation Office would consider them for tax purposes. If I can put it very simply, if you can prove to the ATO that you aren’t an Australian resident for tax purposes then you aren’t liable to pay Australian tax on foreign income earned. The ATO uses a number of criteria to determine residency status. These criteria are NOT exhaustive in any way:
1. Number of days in Australia in the last financial year. Must be less than 180 days.
2. Can you prove you are a resident of another country for tax purposes?
3. Where is your primary residence?
4. Where do you derive your primary income from?
5. Club memberships.
6. Where does your family live?
Unfortunately I’m not familiar with Singapore’s taxation act so someone with prior experience there is probably best suited to answering that question. I am though very familiar with the requirements that need to be met for the ATO. Questions of Taxation treaties only apply to prevent double taxation, i.e. paying the full Singapore Taxation and the full Australian Taxation if you are deemed by the ATO as a resident of Australia for tax purposes.
I find the whole tax debate question between Singapore and Australia quite interesting and to some extent misleading. Considering the number of Australians living and working there and paying tax there, I really can’t see any difference to QF pilots living and working there. The only question is how the Singaporean Taxation Office would consider them for tax purposes. If I can put it very simply, if you can prove to the ATO that you aren’t an Australian resident for tax purposes then you aren’t liable to pay Australian tax on foreign income earned. The ATO uses a number of criteria to determine residency status. These criteria are NOT exhaustive in any way:
1. Number of days in Australia in the last financial year. Must be less than 180 days.
2. Can you prove you are a resident of another country for tax purposes?
3. Where is your primary residence?
4. Where do you derive your primary income from?
5. Club memberships.
6. Where does your family live?
Unfortunately I’m not familiar with Singapore’s taxation act so someone with prior experience there is probably best suited to answering that question. I am though very familiar with the requirements that need to be met for the ATO. Questions of Taxation treaties only apply to prevent double taxation, i.e. paying the full Singapore Taxation and the full Australian Taxation if you are deemed by the ATO as a resident of Australia for tax purposes.
I don't think anything I have posted here can be construed as misleading.
Go and do the research. You all have access to the Internet (obviously) so the websites for both the Singapore IRAS and the ATO are available with a wealth of information regarding the tax situation. Initially it looks intimidating and confusing, but once you work through the issues it can be sorted.The way to do it is to ensure that you are not a 'resident for taxation purposes' in Australia. This means don't try commuting to/from Singapore.
WalkintheClouds - the pilots can come back to Australia as often as they like. Although I feel the rosters will not permit a return to Australia during each period of days off. They will only be afforded one FOC ticket during the period of the basing(bit stingy in my opinion considering they work for an airline!). The issue here is whether they are returning to Australia often enough to considered a 'resident for tax purposes' i.e. commuting whereby they will land themselves in trouble with the ATO. One could remain a 'resident for tax purposes' in Australia and be engaged on 'continuous foreign service' for periods of up to 90 days and have their 'foreign employment income' exempt from Australian tax. There are some conditions attached to that situation which would allow you to return to Australia without breaking your 'continuous foreign service' (recreational leave, compassionate leave, short business trips, etc) and you would need to be careful there so that you didn't give the impression you were commuting.
Start with this link:
http://www.ato.gov.au/individuals/co...tent/28908.htm
Or you could just declare yourself a 'non-resident' and live in Singapore, earn your income there and pay Singapore tax on that income.
POTO - the guy with the inside info. The latest 'official' information I have is that the basing is due to start on June 12. Now if the management staff are floundering around the office not knowing how to get it started (the uncharitable side of me would suggest that is a usual state of affairs for QANTAS) then so be it. In fact I hope they don't start the thing, as I said earlier I don't think it is worth the grief for $3.0 M p.a. savings. QANTAS could probably save more by extending the freeze period on type to three instead of two training years (that is just my gut feeling - I don't have the figures on it). The basing has more to do with satisfying a 'personal quest' that the carriage of SO's to/from Asia is inefficient (some merit to this)
As I said earlier - go and do the research. Better still give the ATO a call (like I did) and explain the situation to them.
I bet all those hundreds of thousands of Australians earning income overseas are packing themselves (not) that they will have to pay tax on that income when they return to Australia.
Come to think of it - I wonder about my mate in Cathay. He is an Australian yet doesn't seem to be paying tax in Australia on his income earned in HK.
Or that other OZ mate of mine working for EASYJET. Yep, he pays tax to Her Majestys' Government but the ATO doesn't get a slice of action. I wonder why?
Or the other OZ friend who works for Babcock and Brown in London. Yep. No ATO involvement there either.
So why would a QANTAS pilot 'residing' in Singapore and 'earning' income there be subject to Australia tax ON THAT INCOME. If I was a 400 SO I would be onto this like a rat up a drainpipe.
Now guys I must go. Wife is up with screaming child and I am sneaking a little look at PPRUNE. (Yes dear I am coming now) Gotta go. Good luck with your research. I promise it won't hurt you.
(stands by for selective quoting)
Go and do the research. You all have access to the Internet (obviously) so the websites for both the Singapore IRAS and the ATO are available with a wealth of information regarding the tax situation. Initially it looks intimidating and confusing, but once you work through the issues it can be sorted.The way to do it is to ensure that you are not a 'resident for taxation purposes' in Australia. This means don't try commuting to/from Singapore.
WalkintheClouds - the pilots can come back to Australia as often as they like. Although I feel the rosters will not permit a return to Australia during each period of days off. They will only be afforded one FOC ticket during the period of the basing(bit stingy in my opinion considering they work for an airline!). The issue here is whether they are returning to Australia often enough to considered a 'resident for tax purposes' i.e. commuting whereby they will land themselves in trouble with the ATO. One could remain a 'resident for tax purposes' in Australia and be engaged on 'continuous foreign service' for periods of up to 90 days and have their 'foreign employment income' exempt from Australian tax. There are some conditions attached to that situation which would allow you to return to Australia without breaking your 'continuous foreign service' (recreational leave, compassionate leave, short business trips, etc) and you would need to be careful there so that you didn't give the impression you were commuting.
Start with this link:
http://www.ato.gov.au/individuals/co...tent/28908.htm
Or you could just declare yourself a 'non-resident' and live in Singapore, earn your income there and pay Singapore tax on that income.
POTO - the guy with the inside info. The latest 'official' information I have is that the basing is due to start on June 12. Now if the management staff are floundering around the office not knowing how to get it started (the uncharitable side of me would suggest that is a usual state of affairs for QANTAS) then so be it. In fact I hope they don't start the thing, as I said earlier I don't think it is worth the grief for $3.0 M p.a. savings. QANTAS could probably save more by extending the freeze period on type to three instead of two training years (that is just my gut feeling - I don't have the figures on it). The basing has more to do with satisfying a 'personal quest' that the carriage of SO's to/from Asia is inefficient (some merit to this)
As I said earlier - go and do the research. Better still give the ATO a call (like I did) and explain the situation to them.
I bet all those hundreds of thousands of Australians earning income overseas are packing themselves (not) that they will have to pay tax on that income when they return to Australia.
Come to think of it - I wonder about my mate in Cathay. He is an Australian yet doesn't seem to be paying tax in Australia on his income earned in HK.
Or that other OZ mate of mine working for EASYJET. Yep, he pays tax to Her Majestys' Government but the ATO doesn't get a slice of action. I wonder why?
Or the other OZ friend who works for Babcock and Brown in London. Yep. No ATO involvement there either.
So why would a QANTAS pilot 'residing' in Singapore and 'earning' income there be subject to Australia tax ON THAT INCOME. If I was a 400 SO I would be onto this like a rat up a drainpipe.
Now guys I must go. Wife is up with screaming child and I am sneaking a little look at PPRUNE. (Yes dear I am coming now) Gotta go. Good luck with your research. I promise it won't hurt you.
(stands by for selective quoting)
OSM,
How many of your friends are employed O/S by an Australian company, were recruited in Oz and are based O/S for a fixed term, after which they will return to Oz maintaining continuous employment with said Oz company?
How many of your friends are employed O/S by an Australian company, were recruited in Oz and are based O/S for a fixed term, after which they will return to Oz maintaining continuous employment with said Oz company?
mustafagander
Whether an employee is employed by an Australian company or not is irrelevant in the ATO’s determining of residency status for tax purposes. There are plenty of Australians living and working in Singapore and else where in the world for Australian banks who are not Australian residents for tax purposes. They usually go to these countries with the intent to return to Australia after few years. This is no different to QF SO’s going to Singapore with the expectation of returning to Australia as well after a few years overseas service.
Whether an employee is employed by an Australian company or not is irrelevant in the ATO’s determining of residency status for tax purposes. There are plenty of Australians living and working in Singapore and else where in the world for Australian banks who are not Australian residents for tax purposes. They usually go to these countries with the intent to return to Australia after few years. This is no different to QF SO’s going to Singapore with the expectation of returning to Australia as well after a few years overseas service.
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The s/o of Qantas have been told that they will subject to 11% tax rate in Singapore, which is much less than here in Australia (top margin i think).
Ohspareme has doubted that whether this is a good decision for Qantas and S/O. I just wondering why the airline came up with this idea?? Do they really save a lot of money by carry one S/O from Australia to Singapore?? Or is it due to the 900 hours limitation of pilots?
Ohspareme has doubted that whether this is a good decision for Qantas and S/O. I just wondering why the airline came up with this idea?? Do they really save a lot of money by carry one S/O from Australia to Singapore?? Or is it due to the 900 hours limitation of pilots?
two reasons: a reduction in payroll tax contributions have to be made by the company plus? + (and a big plus) is that a second s/o won't be required to operate to Asia. That is a substantial saving in man hours. These hours will be allocated to the Europe Runs.
S/o's choosing Singas are looking at a substantial tax saving (despite popular belief to the contrary) It is a Sh@t deal for those who have Family commitments
S/o's choosing Singas are looking at a substantial tax saving (despite popular belief to the contrary) It is a Sh@t deal for those who have Family commitments
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I wonder if any of the narrow minded bean counters at QF have examined how much of the rumoured $3.0 million in savings (due to the proposed basing) will be redirected into the coffers of Singapore Airlines....???
Given QF SOs and their families are:
1. Only entitled to 1 x FOC trip home for their entire basing (2-3 years);
2. Relatively low priority on QF Staff Travel;
AND:
3. The relatively high QF pax loads ex Singapore (both Northbound and Southbound); and
4. The far greater diversity on the Singapore Airlines Route Network....
....It would not surprise me if many QF SOs based in Singapore became SIA Frequent Flyers and then used the competition to get around and see the region and the world... whilst based OS. Effectively, this would REDIRECT a substantial % of the supposed savings straight into the capable hands of SIA management!!
Given QF SOs and their families are:
1. Only entitled to 1 x FOC trip home for their entire basing (2-3 years);
2. Relatively low priority on QF Staff Travel;
AND:
3. The relatively high QF pax loads ex Singapore (both Northbound and Southbound); and
4. The far greater diversity on the Singapore Airlines Route Network....
....It would not surprise me if many QF SOs based in Singapore became SIA Frequent Flyers and then used the competition to get around and see the region and the world... whilst based OS. Effectively, this would REDIRECT a substantial % of the supposed savings straight into the capable hands of SIA management!!
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QF have a few ways of paying their O/S employees.
Local conditions, local taxes etc and
Notional tax (old type system) where equivalent of Australian tax is taken out of your pay, QF pays host country tax on your income and keeps the difference to pay for other inclusions in your contract ,e.g. rent assistance, car etc.
Your salary can be paid to you in the host country or Australia this does not effect your Non resident status.
Either way you do NOT pay tax in Australia, as you are a NON-resident for tax reasons.
The only issue you have with the ATO tax department is if you have an income derived in Aus .For example property rents shares dividends etc or if you return to Aus for more than 180 days and then different conditions apply.
To those in the know
How are the SOs going to be paid ?
In Australia in AUD $ leaving the SOs to draw their cash from ATMs incur bank fees etc
In Singapore in SGD $ equivalent to their Australian pay and watch QF make a percent or 2 fiddling with the exchange rate.
Or a mixture of both….
As far a becoming a SQ frequent flyer…To expensive but great deals on Jet* Asia Tiger and Silk to visit anywhere in Asia. Getting on a QF flight out of SIN. It must be the easiest place to fly out of as you don’t have to worry about being bumped on a transit.
Local conditions, local taxes etc and
Notional tax (old type system) where equivalent of Australian tax is taken out of your pay, QF pays host country tax on your income and keeps the difference to pay for other inclusions in your contract ,e.g. rent assistance, car etc.
Your salary can be paid to you in the host country or Australia this does not effect your Non resident status.
Either way you do NOT pay tax in Australia, as you are a NON-resident for tax reasons.
The only issue you have with the ATO tax department is if you have an income derived in Aus .For example property rents shares dividends etc or if you return to Aus for more than 180 days and then different conditions apply.
To those in the know
How are the SOs going to be paid ?
In Australia in AUD $ leaving the SOs to draw their cash from ATMs incur bank fees etc
In Singapore in SGD $ equivalent to their Australian pay and watch QF make a percent or 2 fiddling with the exchange rate.
Or a mixture of both….
As far a becoming a SQ frequent flyer…To expensive but great deals on Jet* Asia Tiger and Silk to visit anywhere in Asia. Getting on a QF flight out of SIN. It must be the easiest place to fly out of as you don’t have to worry about being bumped on a transit.
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Tax Rates for Singapore in SGD $
Its a roughy but I am sure people can work it out or go to the link below
Start Bracket End Bracket Rate % $ in bracket
-000 19,999 0.00%
20,000 30,000 4.00% $400.00
30,001 40,000 6.00% $599.94
40,001 80,000 9.00% $3,599.91
80,001 160,000 15.00% $11,999.85
160,001 320,000 19.00% $30,399.81
http://www.pwc.com/extweb/pwcpublica...2569A6001FC64C
http://www.mof.gov.sg/taxation/indiv...tax_rates.html
Its a roughy but I am sure people can work it out or go to the link below
Start Bracket End Bracket Rate % $ in bracket
-000 19,999 0.00%
20,000 30,000 4.00% $400.00
30,001 40,000 6.00% $599.94
40,001 80,000 9.00% $3,599.91
80,001 160,000 15.00% $11,999.85
160,001 320,000 19.00% $30,399.81
http://www.pwc.com/extweb/pwcpublica...2569A6001FC64C
http://www.mof.gov.sg/taxation/indiv...tax_rates.html
Last edited by Bolty McBolt; 12th Mar 2006 at 04:55.
Bolty - SO's will be paid in Australian dollars directly to a nominated Singapore bank account. So they will have to wear the currency changeover and other fees along with the inevitable exchange rate fluctuations.
Come off it Datum - do you really think that some SO's flying SingAir home occasionally is going to get the QF Bean Counters all worked up? Doubt it. In fact why don't you have a stab at producing some figures to justify your,
Quote
Effectively, this would REDIRECT a substantial % of the supposed savings straight into the capable hands of SIA management!! UnQuote.
Come off it Datum - do you really think that some SO's flying SingAir home occasionally is going to get the QF Bean Counters all worked up? Doubt it. In fact why don't you have a stab at producing some figures to justify your,
Quote
Effectively, this would REDIRECT a substantial % of the supposed savings straight into the capable hands of SIA management!! UnQuote.
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OhSpareMe ;
All APPROX numbers:
Basing of 100 x SOs
Let's say they all spend $60,000/year in Singapore....Total...
As a conservative estimate - each SO spends 10% of his annual Total expenditure (goods and services) on travel related items/services. More specifically, 5% with SIA or with one of it's subsidary companies (not out of the question)...That works out as approx $3,000/year per person.
100 x 3 = $300,000.00/yr which is 10% of the 'reported' $3.0 millionin QF annual Savings due to the basing
Yes - you could argue that some SOs may not spend this much, some may spend more....whatever, the money will still be spent OUTSIDE AUSTRALIA! Furthermore, these figures do not include any additional expenditure by dependants.....
Just a thought....if you don't agree...so be it...no need to get shirty about it. Chill out.
All APPROX numbers:
Basing of 100 x SOs
Let's say they all spend $60,000/year in Singapore....Total...
As a conservative estimate - each SO spends 10% of his annual Total expenditure (goods and services) on travel related items/services. More specifically, 5% with SIA or with one of it's subsidary companies (not out of the question)...That works out as approx $3,000/year per person.
100 x 3 = $300,000.00/yr which is 10% of the 'reported' $3.0 millionin QF annual Savings due to the basing
Yes - you could argue that some SOs may not spend this much, some may spend more....whatever, the money will still be spent OUTSIDE AUSTRALIA! Furthermore, these figures do not include any additional expenditure by dependants.....
Just a thought....if you don't agree...so be it...no need to get shirty about it. Chill out.
[QUOTE=
Just a thought, what if the basing isn't as good as they planned, what will happen then??[/QUOTE]
Dare say that they would probably close it. The whole basing idea is predicated on achieving at least 3.0 million per year in savings in order to justify doing it. Otherwise, according to its chief architect, it wouldn't be viable.
Then again we would not want a loss of face.
Lancer - recheck your figures mate. According to Datum it is $300,000 not 30K. (although I am not sure whether he is referring to SING $$ or AUD.)
Just a thought, what if the basing isn't as good as they planned, what will happen then??[/QUOTE]
Dare say that they would probably close it. The whole basing idea is predicated on achieving at least 3.0 million per year in savings in order to justify doing it. Otherwise, according to its chief architect, it wouldn't be viable.
Then again we would not want a loss of face.
Lancer - recheck your figures mate. According to Datum it is $300,000 not 30K. (although I am not sure whether he is referring to SING $$ or AUD.)
Nunc est bibendum
Originally Posted by WalkintheClouds
Do they really save a lot of money by carry one S/O from Australia to Singapore?? Or is it due to the 900 hours limitation of pilots?
Cost of S/O coming SYD-SIN remains the same, as does accommodation and allowances. The big saving is the cost of the 'extra' S/O going north (or coming south). QF saves at least $300SGD per night for every S/O they have living locally in SIN. On ball park figures One S/O is a saving of at least $110K SGD ($150 allowances and $150 accommodation) per day. Given that they tend to have two days there, we're now saving at least $600SGD for every S/O that doesn't have to go to SIN. Given that there are probably six to eight S/Os a day that go northbound out of SIN, that adds up to a saving of $600 x 8 x 365= $1.75Mill SGD. My numbers could be short by 20% or more (I've gone cheap on the accommodation cost) and so it doesn't take much to get more than $2Mill SGD in savings.
Given that kind of saving for S/Os, I wonder how long until the offer of a 744 command but only available in SIN is forth coming?
BOHICA!
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Keg
your figures look good but accom cost is $117 sgd per night.
I don't see how the 3 million adds up.
Will the SOs pay drop due to type of flying or increase due to the long sectors they fly?
Datum
3 k per year on travel. If you fly with a Singapore based LCC to visit the region you would spend about $200 SGD per trip, quite often cheaper with many specials around $150 incl taxes.
As a pilot I would have thought living out of a suite case half your life painfull enough with out adding another 15 trips per year to your lifestyle. The cost of living (=beer drinking/high rent) may also tie you down abit too.
Staff travel will be easy for the SOs based in SIN as they will be talking/working with the ops every working day and will get to know them.
For the SOs clever enough to make a friend or 2 with these people and plus a bottle of scotch/ciggarettes/timtams etc during the year I am sure they will not have any trouble getting on a flight any time of the year.
your figures look good but accom cost is $117 sgd per night.
I don't see how the 3 million adds up.
Will the SOs pay drop due to type of flying or increase due to the long sectors they fly?
Datum
3 k per year on travel. If you fly with a Singapore based LCC to visit the region you would spend about $200 SGD per trip, quite often cheaper with many specials around $150 incl taxes.
As a pilot I would have thought living out of a suite case half your life painfull enough with out adding another 15 trips per year to your lifestyle. The cost of living (=beer drinking/high rent) may also tie you down abit too.
Staff travel will be easy for the SOs based in SIN as they will be talking/working with the ops every working day and will get to know them.
For the SOs clever enough to make a friend or 2 with these people and plus a bottle of scotch/ciggarettes/timtams etc during the year I am sure they will not have any trouble getting on a flight any time of the year.
Nunc est bibendum
Fair enough. As I said, I my figures were 'ball park' but even using ball park they still come up about 30% short of the $3Mill quoted.
The S/Os in SIN will most likely earn more than the current S/Os- both gross and nett. I suspect their gross will be more because they'll likely be flying exclusively between SIN and LHR/FRA. Thus every time they sign on, they're looking at over time. Compare this to the SYD based S/O trip to LHR and back which doesn't include O/T on SYD-SIN sector. They're also going to get HEAPS of time off because most of the flying is back of the clock. Thus, a four day LHR trip will be worth about 34 hours (plus the six hours of o/t). Therefore, just five of them a roster gets you to 170- with about 30 hours o/t- which means about 20 days at work every eight weeks with day '1' starting at 2100hrs!
So, gross and time off will be bigger and better because every trip is highly efficient and has o/t. It'd basically be the same as doing five direct LAs a roster! Of course, you have to live in SIN to get the 'advantage' of all of this!
The S/Os in SIN will most likely earn more than the current S/Os- both gross and nett. I suspect their gross will be more because they'll likely be flying exclusively between SIN and LHR/FRA. Thus every time they sign on, they're looking at over time. Compare this to the SYD based S/O trip to LHR and back which doesn't include O/T on SYD-SIN sector. They're also going to get HEAPS of time off because most of the flying is back of the clock. Thus, a four day LHR trip will be worth about 34 hours (plus the six hours of o/t). Therefore, just five of them a roster gets you to 170- with about 30 hours o/t- which means about 20 days at work every eight weeks with day '1' starting at 2100hrs!
So, gross and time off will be bigger and better because every trip is highly efficient and has o/t. It'd basically be the same as doing five direct LAs a roster! Of course, you have to live in SIN to get the 'advantage' of all of this!
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The base will not be on until at the absolute earliest late August. The company realise they are going to get very few volunteers so it will only start with a few and be built up over time.
Problems with tax have arisen, and there will be variances between the individuals as to how their tax situations are assessed (depending on personal circumstances). The name of the company they will work for is a problem (it cannot be Qantas) and this in turn leads to some problems - ie. you have to be seconded out from QF to this entity. Superannuation issues are also there (how they pay your super in Aus while you are working for a different company over there comes to mind). Not sure, but have also heard the length of time over there also comes into play when determining the eligibility for singapore tax (nasty rumour I heard but with no fact to back it up was you needed 3 years to get the best tax rate).
From what I have heard, there are quite a few issues causing grief for the company which they were unaware of last year, and thus the starting of the base is being delayed.
All rumour still at this stage. Just the most common theories I have heard.
Problems with tax have arisen, and there will be variances between the individuals as to how their tax situations are assessed (depending on personal circumstances). The name of the company they will work for is a problem (it cannot be Qantas) and this in turn leads to some problems - ie. you have to be seconded out from QF to this entity. Superannuation issues are also there (how they pay your super in Aus while you are working for a different company over there comes to mind). Not sure, but have also heard the length of time over there also comes into play when determining the eligibility for singapore tax (nasty rumour I heard but with no fact to back it up was you needed 3 years to get the best tax rate).
From what I have heard, there are quite a few issues causing grief for the company which they were unaware of last year, and thus the starting of the base is being delayed.
All rumour still at this stage. Just the most common theories I have heard.