Every country has its own tax procedures, policies and rules; no matter where you live and work, you’ll need to make sure you’re aware of these for your circumstances.
Becoming a dual citizen of a new country (or just residing overseas) can come with many benefits, sometimes tax benefits – but avoiding submission of tax returns and refunds are not usually some of them. If you aren’t clued up on the correct policies, you could end up being penalised significantly, resulting in you having to pay more tax than you should otherwise have needed to.
As an Australian expat living overseas, you’re responsible for filing your Australian tax return annually. You are responsible for keeping detailed records and knowing what you need to report and how.
The biggest mistake dual citizenship holders make
The most common mistake we see people making as dual citizenship holders is believing they don’t need to pay any taxes or keep up with other payments if they’re overseas.
Being overseas, and securing second citizenship, doesn’t automatically excuse you from having to file tax returns in your home country. As an Australian expat, you’ll need to ensure you stay on top of keeping your records up to date and maintain any expected payments, which may include child maintenance payments, loan or mortgage repayments, or paying interest on assets and investments.
You don’t ‘opt-out’ of these simply by living and working in another country – even if you do become a citizen.
Consequences of not filing your tax return
The Australian Tax Office (ATO) sets out the penalties and consequences for not filing your tax return or keeping your records up to date. They do take individual circumstances into account, but penalties include fines and even jail time. The ATO and governments can be pretty strict with expats and only you can ensure you’re doing what’s right and expected of you.
We understand more than anyone that sometimes this can be confusing, so the best way to stay safe, up-to-date and on top of everything you need when it comes to your tax is to get help from the professionals!
Our Expat Taxes team would be pleased to assist with anything tax, accounting, investment and/or finance-related, so feel free to contact us today or book an appointment with one of our senior Australian tax accountants.