What Are The Applicable Laws For Residents And Non-Residents?

If you are in Australia, there are different statutes of taxation. One of the key elements that will determine the amount of tax that you will pay is whether you are a resident of a non-resident. There are many people who are ignorant of such laws and end up making the wrong decisions. Understanding where you stand is imperative as this has quite an impact on the tax claims that you can make.

Why is this Important

Australian law is very clear and has different treatments for residents and non-residents. It is important to understand the tax rules so that you can lodge the right tax return. One key difference is the fact that non-residents are taxed on income that is sourced in Australia only. However, the residents have to declare and pay tax on worldwide income. The effective tax rates for the non-residents are rather higher than for the residents. This can be quite confusing and Accurate Business & Accounting Services would be glad to assist you in the tax workouts. Whether you are a resident or not, give us a call and we advise you accordingly.

All Australian tax residents are taxed on capital gains and worldwide income, irrespective of the source. The residents are entitled to an $18,200 tax-free threshold and also a 19% marginal tax rate for income that is less than $37,000. All these are benefits that are not available for non-residents. For the non-residents, there may be a final withholding tax on a certain amount of the income. The withholding taxes for non-residents are final and there will be no tax return lodgment at the end of the financial year for the specified incomes.

Australia has made agreements with a number of countries in regard to taxation. As such, if you are a non-resident from these countries, you may have a reduced rate of withholding tax, thanks to the double tax agreement. The Medicare levy is also paid by residents and as such, the non-residents will not have claims on Medicare benefits. The non-residents will also have 10% of the interest earned from banks in Australia withheld. There is a great difference in the taxation of Australian residents and non-residents. Understanding this difference is critical as this is the only way to have your taxes lodged in the right way.

Get Professional Help

Whether you are a resident or a non-resident, Accurate Business & Accounting Services is willing to help you work out the tax due. Call us today and let us help you with the computation of the tax due and any claims that you should make.