tax deadlines

Australian tax deadlines for Aussie expats

Are you an Aussie expat who earns income from Australia? Lodging a tax return annually does not need to be a stressful experience. All it takes is, being responsible and respecting all Australian tax deadlines.

When is the due date for the lodgement of your tax return?

If you are the one lodging your own tax return for the previous financial year which covers 1st July – 30 June, then your tax return will be due on 31st October (4 months after the end of the financial year).

How using a tax agent or accountant affects the deadline

As an expat, the best way to lodge your tax return is to hire an experienced expatriate tax firm with deep expertise in Australian tax returns in an international context. Just make sure that they are a Registered Tax Agent just like we are (our registered tax agent number is 25220543 for readers who are interested).

According to the Australia Taxation Office (ATO), using a tax agent to handle your tax return usually gives makes you eligible for an extended tax return due date as late as 15th May of the following year! Bear in mind that although this is the usual due date for most expats using the services of a tax agent, your actual due date may be different (it will depend upon your own particular set of circumstances).

To engage a specialist expatriate tax/accounting firm and take advantage of this extended due date, sign up with them before 31st October. If your tax returns were lodged on time in the prior year, you’ll generally be eligible for the extended tax return due date of 15th May of the following year.

Easy tips to manage your key tax dates

To make reporting and paying to the ATO easier, you can go to the ATO website and download the ATO app to access the key dates tool. The tool is designed to tell you when your due dates will be. This enables you to meet your tax reporting and payment obligations hassle-free.

Are there penalties for missing the tax return deadline?

Maybe you missed the tax return deadline because it reached ATO late, you were abroad, unwell or simply forgot about it. Whatever the reason is, you may be subject to a late lodgement penalty. For the first 28 days after the deadline, the penalty goes up to $222 and keeps increasing by $222 after every 28 days until a maximum of $1,110.

Where you have been penalised, or where you have tax payable on your return, the ATO will also charge you interest from the date that your return was due. This is known as ‘General Interest Charge’ (GIC) and it’s something that is worth trying to avoid where possible, as the rate charged by the ATO is, very, very high!

For example, at the time of writing (15th Dec 2020), despite a record low Reserve Bank of Australia cash rate of 0.1%, the rate currently being charged by the ATO is 7.10% (for the December 2020 quarter). Even worse, interest charged by the ATO compounds daily (a 7.1% annual rate compounds at 0.01939891% daily) so the interest charged can add up quite quickly! For a link to the ATO’s current quarterly GIC rates, click here.

Handling tax returns especially after missing the deadline can be complex area, particularly where a person has a large amount of tax returns outstanding, so generally we’d recommend that you’d be better off letting a tax agent prepare and lodge those returns on your behalf.

To determine whether you need to lodge a tax return in Australia, check out our article Do I need to lodge a tax return while living overseas?.

If you do have returns to catch up on, or if you need some expatriate tax advice, contact us today. Our Expat Taxes team can assist to bring your returns up to date, and to provide you with the tax advice you need to minimise your taxes and maximise the various opportunities that may be available to you during your overseas adventure.

Shane Macfarlane CA
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