Are you relocating or planning to relocate overseas for work? While broadening your life experience and exposing you to new things, moving overseas is also quite daunting. For a smooth transition, here are the top five things you should keep in mind before you become an expat.
#1 Obtaining a visa
Most countries require you to obtain a working visa to work there legally. Most work visas will be tied to a specific job offer that you have from an employer in that country, however if not, then you should always ensure that you have a firm job offer before applying for your work visa. On that front, many employers will apply for the relevant visa on their employees’ behalf, but you should always clarify this.
#2 Finances
When you’re offered a role, you should get a clear indication of the position’s salary and benefits.
It’s also recommended that you seek tax advice at this point also, because in some countries, additional taxes over and above what may be deducted from your salary can be payable, and in some cases, additional income, such as your superannuation earnings (as is the case when your move to the United States) may need to be included in your taxable income. If so, then you may find that although the gross income offered is greater than what you earn in Australia, your net take-home pay may be significantly less!
Additionally, before accepting any role, we highly recommend you negotiate your salary so it corresponds with the area’s cost of living. Researching local rental prices, household and other living expenses will give you a clear idea of how much you will need. A website that we often refer our clients to compare the cost of living for various locations is https://www.numbeo.com/cost-of-living/ so please be sure to check than when considering the salary package offered to you.
#3 Changes in lifestyle
Relocating overseas will no doubt necessitate lifestyle changes. So, before moving away, research the country’s differences in terms of climate, culture, work ethic, language, schooling for the kids and overall quality of life.
If possible, a quick trip to your new home before you start your job is highly recommended and likely to be highly beneficial in assisting you to make the decision to accept your new role in that country or not. While there, explore schools for your kids, local attractions, amenities and more. This will determine whether your family’s needs and expectations will be met.
#4 Renting or selling your home
Whether your future position is temporary or permanent, you’ll need to look into either renting or selling your Australian property. As many expats plan to return, they choose to rent out their property. This allows you to earn further income while you are overseas. However, we advise you to examine the tax implications of renting your Australian property before going ahead.
In particular, take extreme care not to sell your home (your main residence) during the period in which your are a non-resident as the government recently introduced rules to deny non-residence a main residence CGT exemption on the sale of their homes – for further information, read one of the many articles that we’ve written on this topic Capital Gains Tax changes to affect thousands of Aussie expats.
#5 Tax treaties
Many countries have tax treaties with Australia. These bilateral agreements determine the percentage that expats are taxed on things like income, investments, pensions and more when moving overseas.
A tax treaty also prevents you from paying double taxation in Australia and your country of residence. To avoid a costly tax bill, we will explain the implications of the tax treaty between Australia and your host nation.
For personalised expatriate tax advice, whether you are moving to or from Australia, contact our friendly team at Expat Tax Services today.
- Demystifying PFICs for Australians in the United States - 12/04/2024
- Update: Thailand Clarifies Tax on Foreign Income - 25/11/2023
- Remote Workers – Australia’s Opportunistic Tax Grab - 11/11/2023
