I have a small internet-based one-man business. I am based in UK but will be applying for a CPV 143. I intend to run the business from Oz and transfer over the proceeds at regular intervals.

My question is, would I par tax in the UK where it was earned, or in Oz where I would be resident? Or (Heaven forfend!) both.

Thank you

S

If you have a permanent residency visa and reside in Australia, you must report ALL worldwide income on your Australian tax return.

The good news is that if you pay any foreign tax, you will get the credit for that tax paid there taken off of any tax payable in Australia.

These are very general rules, you will need to employ a registered tax agent once in Australia to make sure you are set up correctly to operate in Australia. Depending on your particular circumstances, you may be required to obtain an ABN and register with Australian business authorities. Failure to do so, may result in a very nasty relationship with the ATO.

Cheers,
Marilyn

Hiya and thank you very much for this. Could you please tell me what circumstances I might have to.....'obtain an ABN and register with Australian business authorities.'

My business would be based in the uk, administered over the internet and turn over arounf £45,000 PA.

Thank you

S

Once your annual turnover meets or exceeds AU$75,000 you are required to register for GST.

As you are a permanent resident, and the UK has a tax treaty with Australia, unless your business is conducted from a permanent entity (IE company) in the UK, the ATO will take your business income to be Australian sourced. The brains of the operation are in YOU which is in Australia, hence, Australian sourced income.

If you purchase any supplies (paper, pens, internet provider, web site hosting, etc) you will want to claim back the GST credits. You can only do this if you are registered for GST.

Here are several links to get you started,
but I STRONGLY recommend that you see your tax professional to get a personalized business plan set up. The proper plan can save you lots of hassles with the ATO and will save you money.

UK Tax Treaty

Doing Business Overseas


FYI - the ATO has data sharing policies with over 40 different countries, the UK is on this list. They are able to match international financial transactions to Australian residents. The ATO are targeting residents with international financial transactions, that is why it is IMPERATIVE that you seek the advice of your tax agent to get this right the first time.

Data Exchange



Cheers,
Marilyn

Thank you very much for this information. And the links are very relevant.

The whole of my business is conducted via a permanent (telecoms) company in the UK. I simply rent a service from them and they pay me commission on my 'output' each month. Strictly speaking I am more 'self-employed' than running an independent business.

I am very keen to make sure I comply with all regulations hence my early start to get to grips with the situation before I transfer myself to Australia.

S

Being "self employed" is classified as being a "sole trader" in Australia, which is operating a business, which requires registration with authorities.

I would contact a Tax Agent in the town/area where you intend to settle and get the ball rolling on all of this ASAP. At the very least, you can get all of these questions answered and have the paperwork started on this end if needed. Then you just have to sign it when you arrive and you're off and running to a successful/profitable new life!!

Cheers,
Marilyn

Thanks very much for the info and encouragement Lady M. I can't wait! The applications in and will be following your advice

S