ATO watching for foreign income this Tax Time
Having foreign income is always an excellent opportunity to increase business network. It is also greatly profitable if investment are done in the right manner with the right target objective. However, many business owners may have not observed the strict tax structure whilst earning foreign income. ATO has taken note of this and alerting all taxpayers to observe the regulations on foreign income tax.
The ATO is urging taxpayers who receive any foreign income from investments, family members or working overseas to make sure they report it this tax time.
New international data sharing agreements allow the ATO to track money across borders and identify individuals not meeting their obligations.
“This year, the ATO has received records relating to more than 1.6 million off-shore accounts holding over $100 billion and is now using data-matching and sophisticated analytics to identify foreign income that has not been reported,” Assistant Commissioner Karen Foat said.
The ATO has shared data on financial account information of foreign tax residents with over 65 foreign tax jurisdictions across the globe, including information on account holders, balances, interest and dividend payments, proceeds from the sale of assets, and other income.
In addition to a small number of individuals deliberately engaging in tax avoidance, the ATO is concerned about a large number that are unsure of how to meet their obligations.
“If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount may be. This may include income from offshore investments, employment, pensions, business and consulting, or capital gains on overseas assets,” Ms Foat said.
“Even if you have paid tax on the overseas income it must be reported to the ATO, however you may be able to claim a foreign income tax offset to account for any foreign tax paid.”
If you are unsure about foreign income tax structure or requirement, please do not hesitate to give a call to our firm in Verus Accountants and Advisors today. Tax evasion is not something to be taken lightly especially when it comes to foreign income tax as this may involve a great amount of money. So, wise up to have this resolved as soon as possible!