- WE | Worse Tax Summaries Australia Individual - Significant developments ‘The Low an Mice Income Tax Offset, which applied to reduce the overall ax payable for those with taxable income of less tha 126,000 Australian Gols (AUD), ceased to apply alter the year ended 30 June 2022, See the Taxes on personal income section for more information Under the superannuation guaranteo (SG) schame, which requires employers to contribute a certain percentage of an employoe's earings base, ‘subject 0 limited exceptions, to a registered superannuation fund or retirement savings account on benalf ofthe employee, rom * July 2022, tne SG percentage is 10.5% and wil remain so unt! 30 June 2023 at which time twill increase to 11%, See the Other taxes section for mare information. ‘A tax deduction is alowed for COVID-19 tests (including polymerase chain reaction and rapid antigen tests) where they ae purchased for ‘work-related purposes. See Deductions section for mare information. ‘The Australian Taxstion Office (ATO) continues to runs high wealth private groups tax performance programme, which covers Australian resident individuals who, together with ther associates, contral wealth of mare than AUD 50 millon. The alm o this programme is to provide greater assurance tothe community tht high wealth private groups ae paying the right amount of tax. See the Tax administration section for more information Individual - Taxes on personal income ‘A resicent incvdual is eubjac to Australian incom tax on a werldwide basis, i, incame from both Australian an foreign sources (except for Certain foreign income and gains of temporary resents; see Capital gains under the Income determination section for more information), ‘Annon-resident individual i lable to Australian income tax ony on income (other than interes, royalties, and dividends, which are generally subject to \ithholing tax (WHT) derived from sources In Australia, and certain statutory income that is taxable on a basis other than source (e.g. certain capital gains ‘Australia has no surtaxes, alternative, r other income taxes on personal income, Personal income tax (PIT) rates The folowing tales sts out he PIT rates tht cuenty apply fo resident and no-rsidetinvisal forthe year ending 30 ure 2022 These rates and tresholds are planned to continue unl 20 June 2024, aftr whachthe nest giated phase ofthe ax cu wil take tec om ly 2024, ‘hereby the 92.5% and 37% marginal ax ates wile removed, Residents The following table applies tothe 2022/9 alter ancl years unt 90 June 2026, Taxable Income (AUD) Taxon column (AUD) | income taxon exces (14 ° Not over 10200 45000 190 10.000 1967 480 Note: This table does not include the Medicare levy of an adstional 2% of taxable income, which apples to most residents, An additional Medicare levy surcharge of Between 1% and 1.5% appli to certain higher income taxpayers not coverea by health insurance for private patient hospital ‘cover. Special rates apply to unearned income of children below the age of 18 years at yearend where that income Is more than AUD 416. In adation, the above table does not include tax offsets, inclusing the Low income Tax Oifset (maximum of AUD 700 for those earning up to AUD £37,500) that can apply fo reduce the overall tax payable fr those with taxable income up to AUD 66,667 (note tha the Low and Mile Income Tax COfset dovs not apply ator the 2021/22 income yea). Non-residents 2022/28 finan year: Taxable income (AUD) “ax on column 1 (AUD) Income tax on excess (4) over Not over 180,000 61200 450 Note: Non-residents are nt required to pay the Medicare levy in Australis, ‘The above does not take into account any tax offsets that may apply Working holiday makers ‘Special income tax rates apply to’@ working holiday maker who is typically an incvidual holding a temporary working holiday visa ora work and holiday vsa in Australia. The frst AUD 45,000 of a working holiday makers income (broadly, the assessable income derived ror sources in‘Australia, less related deductions) is taxed at 15%, withthe balance taxed at ordinary rates. Local income taxes There ave no local taxes on personal income in Australi, Individual - Residence Under curent ules, individuals ae resents of Australaif they reside in Australla, and this includes the folowing + Incividvals whoso domicile isin Australia, unlss they have a permanent place of abode outside Australia, + lncividuale wha have actually been in Australa for more than one-half ofthe income year. at least 189 days in the income year, unas the individual's usual place of abode is outside Austra andthe individual does not intend to reside in Australi + Ifthe incivcual is an ‘slgile employee" forthe purposes of legislation relating tothe superannuation entitlements of Federal public servants, Persons who tako up a contract of employment in Austral may be regarGed as residents if they are inthe country for more than six months, (Czenship and nationaty donot determine labilty for Australian income tax [A temporary resident for tax purposes i, broadly, an incvidual who: + holds a temporary visa granted under the Migration Act 1958 + Is not an Australian resident within the meaning ofthe Social Securty Act 1991, and + oes not have an Australian spouse as defined in the Socal Security Act 1991 ‘temporary resident il be exempt from Austral an taxon foreign source Income, while a resident of Australias subject to tax on worldwide ‘Australia's tax realy arrangements with certain other countries contain spacial rules for determining the juisclction to tax specified types of income {see Tax treaties in the Foreign tax elie and tax treaties section for mare informatior), Most tveates contain tie-breaker rules which seek to ‘overcome situations where an individual is treated as resident of bath Australia andthe other tax treaty county. The determination of rasident status ndor these tie-breakor rules ovaries the operation of the gensral resident status rules referred to above, ‘The then Australan goverment announced in its 2021/22 Federal Budget that it wil place and modemise the tx rules for determining individual tax residency. There has been a change of government sines this was frst announced, ard it remain unclear whathar this proposal wil proceed. ‘the moasure fs enacted as erginaly announced, under this proposal, hore wil bea new primary ‘bright line test where an inividual would become ‘an Australian tax resident they are physically presert in Australia for 189 days or more in ar tax year. Where an ncivual does not meet tris primary test, secondary tests apply, These secondary tests Would set out obsective enterl, 0.9, whether an inévidual has the night to reside permanently in Australia, whether they nave Australian accommodation, famly located in Australia, or Australian economvc connections. If these ‘changes are enacted as orginally announced, then they ae proposed to apply from 1 July folowing the enactment ofthe enabinglegsaton, Le. 1 uly 2028 atthe earliest Individual - Other taxes Social security contributions “There are no socal security taxes in Austala, However, a levy is Imposed on taxable income and reportable tinge benefits of residents fo: the funding of a Natonal Heath Scheme (Medicare). The Meaicare levy is currently 2%. No avy is payable by thase with taxable income below the relevant low income thresholds ‘Asurcharge of between 1% and 1.5% apples ta igh income taxpayers where the taxpayer and thelr dependants are not covered by a private heath insurance fund registered in Australia that provides basic hospital cover. Both employers anc foreign nationals working in Australi should take cave in choosing a health fund which both qualifies forthe exemption frm the Mecicare levy surcharge and provides adequate cover because itis possible to have a policy that provides fll cover but does not also exempt the Boley holder and ther family members) rom the surcharge and vice versa, Propar advice should be sought from a tax exper to ensure that the Palcy covers both aspects. - ‘Superannuation and retirement taxation Employer supported and set-employed contributions to ‘complying’ superannuation entities and retirement savings accounts (RSAS) in Australia play role sila to that of social securty eves. Te retirement benelts provided by these superannuation entities (which ae independent of ‘government, but have ‘0 comply with regulations so they are ‘complying’ are in addition to a means-tested age persion that is provided by the federal government. ‘The rules governing the taxation of superannuation enti are complex. Below is a bret summary of the current law, Employers must contibute a set minimum percentage ofthe employee's earings base, subject o limited exceptions, to a complying ‘superannuation furd on bell oftheir employees oF be lab toa superanrwation guarantee charge, The required superannuation guarantee percentage wll progressively increase up to 12% as folows: 4 From 4 duly 2022: 10.5% 1 From 1 July 2028: 11% + From’ duly 2026: 15.5% + From 1 July 2025: 12% itis usually tax effective cubjoct to certain limits) for employoos to forgo or ‘sacrifice’ part of their salary to allow employer superannuation ‘contibitions on thelr behalf above ths minimum, There is no lim to the smourt of contbiions that can De claimed aa a deduction, However, there {are limits on the amount that can be contributed por invidual per income year that are eligible to receive concessional avourable) tax treatment ‘Concessional superannuation contributions can be made on beralf ofan indkidual up to AUD 27,500 por annum. Individuals with superannuation balances of less than AUD 500,000 also have the ably to cary forward unused concessional contribitions fram upto the fve previous financial’ ‘years and use the amounts to make adcftional concessional contributions dung a particular nancial yea. Inlviduals can also make non-concessional contributions toa superannuation fund. contributions that are not deductible). The annual non- ‘concessional contribution cap is curently AUD 110,000 per year, subject toa tirae-year bing forward rule for those individuals aged under 75 years (67 years forthe 2021/22 and eatlir financial years). The non-concessional cap isl the indvidual has total superannuation balance ‘greater than or equal to AUD 1.7 millon a at 30 June ofthe previous fancial year.‘eductibie, and ean be made regardless of other cantrbution caps and voluntary contribution retitions. Generally, concessional contributions made to complying superannuation funds together with the fund's eamings ae subject to tax at th rato of 15% payable by the fund. The concessional rato of tax on contrbutions is offectvely limited such that concessional contributions madi In respect of individuals with combined taxable income, total net investment losses, reportable rage benefits, and concessionaly taxed superannuation ‘contbutions exceeding AUD 250,000 are subject to adational tax at 15% on those cortibutions that exceed the threshol Under the First Home Supor Saver Scheme, an individual can apply to release voluntary superannuation contribution, along with associated ‘eamings, ta help purchase ther frst home, subject ta meeting certain eigiliy requirements. Concessional tax treatment applies to amounts \withravn rir tho sehome, Generally, all superannuation benefits received by an individual aged 60 or over are tax-free where those benefits are paid from a taxed source. However, the tax veatment of ater superannuation benefits may depend on factors such asthe companerts ofthe benef, he amount of the Benet the age of the member when the Bones racelved, and whether the benef s received asa lump sum or as a Superannuation Income ‘stream. Certain superannuation income streams ave subjact o minimum drawdown rates. Consumption taxes ‘The federal government levies goods and services tax (GST) a arate of 10%. The GST is a value added tax (VAT) applied at each level in the manufacturing and marketing chan. apglis to most goods and services, and registered supper get credits for GST on inputs acquired to make taxable supoles, Supplies of cigital cuency receive equivalent GST treatment to supplies of money. Food, wth some significant exceptions, exports, most health, medical, feminine hygiene products, educational supplies, and some other supplies aro “GST-fee te equivalent of 'zero-rated' in other VAT jurscctions).A registered supple ofa GST-fee supply can recover relevant input tax credits, though the supply isnot taxable, Rosidential rents, the second o later supply of residential promises, most nancial supplies, and some other supplies ae inputtaxed exempt in ‘other VAT jurisdctions) and are not subject to GST, However, the supplier cannot recover relevant input tax credits, except for financial suppliers |ho may oblain a reduced input tax erect of 75% ofthe GST on the acquisiion of certain services, Heath insurance is GST-ee,ife insurance is input taxed, and general inuranceis taxed. ‘Ravers charges' may apply to services or rights supplied ‘rom offshore, whero tho recipient i rgistored oF required to be registered, and usos the supply solely or partly fr a on-erecttable supply ‘GST applies to cross-border supplies of cial products and services imported by Austiallan consumers, GST is payable on certain supplies of ow Value goods (valued at AUD 1,000 ar less) that are purchased by consumers and are imported into Australi Purchasers of new residential premises’ or ‘potential residential and included in a property subcvision pan’ are required to withhold and emit to the ATO an amount an account of GS. Net wealth/worth taxes ‘Australia does not have anet wealth tax Inheritance, estate, and gift tax ‘Australia dovs not have inhertance, estate or gift taxes. However, special tax rues apply to + the transer of assets to a beneficiary from a deceased estate for capital gins tax purposes and + the transter of superannuation entitlements to beneficiaries of a deceased person. - Property taxes [Allthe states and tenitorie of Australia impose lad taxes on landowners based on the unimproved value ofthe land they hold, subject to certain ‘exemplon tieshold, exemptions for a principal residence, and land used for certain purposes, Municipal unc algo levy rates and other charges ‘on land witin their munirpaltes, ‘Some Australian stats impose a duty or land tax surcharge on certain Australian real estate holdings ofa ‘foreign person, which generally inluses {foreign natural person, corporation, or trustee of a foreign trusl In adition, thee is an anrwal vacancy fee imposed atthe Federal lave ona foreign ‘owner of Austalan residential property that fs essentally vacant or at least half of a year and that was acquired at any tine since 7:30 pm AEST 8 May 2017 (see Other issues section for further informatio. ‘The stale of Victoria has a wincfall gir tax that applies tothe increase in value of and in Victoria of at least AUD 100,000 that results trom a rezoning that takes effect on or ater 1 July 2023, subject to certain anstional arrangements. - Excise duties Excise dutos are imposed at high aves on beer, spirits, lqueu's, tobacco, cigarettes, and petroleum products. Excise rates for tobacco and alcohol are indexed biannually based on movements in the consumer pre index (CPD, Some examples of current excise rates include: + Beer not exceeding 3% by volume of aloonol packaged in a inviual container not exceeding 48 Itres: AUD 47.86 perlite of alcohol ‘calculated on that aleohol content By which the percentage by volume of alcohol ofthe goods exceeds 1.15. + Tobacco in stck form not exceeding in weight 0.8 grams per stick actual tobacco content: AUD 1.14040 per stick + Petroleum condensat crude petroleum ol and diesel: AUD 0.45 per tre, + Liguetiod petrotoum gas, other than quoted petroleum gas exempted from excise duty: AUD 0.15 per ire. ‘A tuo tax credit system proves a crc for fuel tax (excise of customs duty) thats incude inthe price of taxable fuel. Broscly, cracks are ‘valnble to enties using fuel in ther business and to householos using fuel or domestic eletricty generation and heating, ‘Stamp duty All states and teritaries of Australia impose stamp duty at various rates on various transactions or documents, such as real property conveyances, motor vehicles, insurance polities, and contracts effecting the transfer of realestate o interests therein, The imposition of duty on share tasters involving unlisted enttiesctfers from state to state ‘The New South Wales government has exempted from stamp duty purchases of new or used battery electric and hydrogen fuel cll vehicles that cost up to AUD 78,000 (dulabl valu) that are registered from 15 August 2022.Import duties Imports to Austala are subject to ites under the Austallan Customs Tat, unless an exematon apples: The top dy rates St = Fringe benefits tax (FBT) Fringe benefits are not taxable i the hands of the employes. Instead, a separate tax collection procedure applies tofinge berstits with the tax known as FBT, which s levied on tne employer (see Non-cash benefits in the Income determination section or more information Individual - Income determination Employment income ‘Gross assessable income ofan employee includes cash remuneration arising ram employment. Cash remuneration incles salaries, wages, ‘commissions, bonuses, pensions, and allowances paid to employees, Resident individuals ae subject to Australian tax on ther overseas employment income, unless special exemption requirements are met. However, tax reates ae in foree wth various countries, nd provisions in those treaties may require a ciffarent tax treatment of certain employment income. Resident individuals are able to Australian tax om income derived fom ll sources, including forsign employment income. Salary and wages derived by resident incviduals, in performing des overseas fr a continuous pariod of at least 91 days, are arly eligible for exemption from ineome taxi the foreign service is directly attroutable to specified actives (e.9. services directly atvibutable vo the delivery of Australia's overseas ai program ‘or deployment as a member o a ciciplned force) an provided the earnings are not exemt Irom tax inthe foreign county in which they are ‘seme. Foreign nationals are generally taxable on salary and allowances relating to services performed in Austala,ragardlass of whore the payment is mado Non-cash benefits Non-employee resident taxpayers are subject to tax on non-cash business berets. However, for non-cash benefits provided to employees, employers are currently Vable for an FET thats levied at 47% ofthe taxable value muted by a gross-up factor ofthe tinge benefts granted to employees, The gross-up factors 2.0802 for type 1 aggregate fringe benefits, inge benefits wnich, subject to certain exceptions, the employer was ented to an input tax erect for GST. The gross-up factor is 7.8868 fr other tinge Denetis, which ave refered to as "ype 2 aggregate ringe berets’ FBT is generally deductible by the employer for Income tax purposes, Benefits subject to FBT ave excluded from the employee's taxable income, but may be taken into account (as reportable hinge benef) when ‘ostermining the employes's labilty fr tax surenarges such as the Medicare levy surcharge and incame-related abl gations such as cid suppor, ‘and entitlement to certain tax offsets, = Equity compensation ‘Special rules govern the tax treatment of employee share schemes (ESS) Under these rules, taxis imposed on the discount on shares and ights/options issued to an employee (or associate) under an ESS in the income year in which the shares or rightaoptione are acquired [An annul exemption threshold of AUD 1,000 is available to employees where the scheme meets certain conitions (including being non ‘iscrminaton and is onl available for employees whose taxable income (atte adjustments taking nto account reportable fringe benefits, total net investment losses, and reportable superannuation contibutions} does not exceed AUD 180,000. ‘There is an ability to defer the imposition of tax, subject to meeting cetain conditions. For ESS shaves awarded from 1 July 2015, the taxing points ‘+ whan there is no realrisk of forfeiture ofthe shares and any restrlctons onthe sale are ited ‘+ when the employee ceases employment (but only where this accurs before 1 July 2022), or + 15 years after the shares were acquied Inthe case of options granted from 1 July 2015, ciscounted options will generally be taxed the earlest of + when thera is no ral isk of forfeiture ofthe rights and any restictions on the sale ofthe rights are ited + when the employee exercises the right, and after exercising the right ther i no real sk of forfeiture of the underlying share anc the restrictions ‘on sale ofthe share are Ifted + when the employee ceases employment (but only where this occurs bafore 1 July 2022), or +1 yoars after the rights wore acquire. “Tax deferrals also avallable for ESS interests received at a 100% discount under certain salary sacrifice arangements where the employee receives ESS interests of rot more than AUD 5,000 wort of shaves under thase arrangements in an income year (other nitions must also be met Further concessions apply to options or shares provided by ‘eligible stat-up companies’ foroadly an unisted company that was incorporated fr less than ten yeas and with aggregated tunover of no more than AUD 50 millor). These concessions include an income tax exemption an the discount ‘on certain shares and a doferal of income tax onthe discount on certain rights unt exercise or salo under tho captal gains tax rule. ‘The disclosure and licensing requirements have been simpified for mary companies where companies do not lon or charge to employees to whom they offer ESS intarests and fo unsted companies that make ESS offers valued at up to AUD 30,000 per employes on offers over a 12-month peti, plus an additional 70% of any dividends and 70% of cash bonuses received in that year. Ir goneral, and subject to Australa's double tax voatios, Australian residents are subject to tax onal discounts they receive in respect of shares and rights/options acquired under an ESS regardless of whether itis received in relation to employment in Australia or outside Austral, Foreign residents are only subject to Australian tax on discounts they recive in respect of shares and rights/optons acauired under an ESS tothe extent thatthe discount relates tothe employment in Australia (eg. Because te employee works in Australia dung al or pat of he vesting period, ‘The rus also include annual employer reporting obligations both inthe year of acquisition of shares or rights/options, ang in the year of income in whieh the taxing point on deferres shares or rights/options ais, WHT wil apply where an employee fas to provide ther employer with a"tax file number" (TFN) by the end of the income year in which any apolcable siscountis subject 1 Austalian tx.Income from a rade, business, profession, or vocation derived by an incivdual is assessable. The individual wil be able to claim a deduction for ‘expenditure ncured in gaining or producing the income or which s necessarily incurred in carrying on a business forthe purpose of gaining or producing the income (nat being expenditure of a private, capital, or domestic nature). Entitlement toa deduction for certain mator vehicles or ravel ‘expenses wil, however, dopend on ealtying the partcular record Keuping requirements ofthe substation provsions. Capital gains ‘Capital gains tax (CGT) applies to assets acquired on or after 20 September 1985. Capital gains made upon the realisation of such assets are included in assessable income and are taxed at ordinary rates o tax. Capital losses are offset only against capital gains and are applied to any ‘capital gains before discounting) and carat be offset against other income, Ifthe asset was acquired on or after 11:45 am AEST on 21 September 1999 and has been held fora least 12 months, a iscount applies such that 50% of the nominal gain (with no indexing of costs for iain) is included in the individual's taxable income. The C&T discount for resident individuals who invest n qualifying affordable Rousing is 60%. Anon-residentinaividual is not enttled tothe discount on capital gins accrued ater 7:30 pm AEST on 8 May 2012. the asset was acquied before 11:45 am AEST on 21 September 1999 and was held for at least 12 months, an individual has a choice of calculating the assessable captal gain using the discount method or te indexation method (Le. 100% af the gain calculated ater allowing for iefation based on the OPI of costs incurad up to 30 September 1998, but not beyond that date). In calculating capital losses, there is no indexation. Rosidents of Australia, except temporary residents, are liable forthe tax on gains trom the disposal of assots wherever situated, subject to a tax offset for foreign tax pai. Non-residents are subject to Australan CGT only where the asset is taxable Australian propery’, thats broadly, Australian real property, ofthe business assets of Ausralan branches ofa non-resident. Australian CGT also applies to inlvect Australian real property intrest .e.non-portfolo interests in interposed enties (nclucing foreign interposed entities}, where the value of such an interest is wholly or principally atibutable to ‘Australian real property. eal propery’ Yor these purposes is consistent with Australan veaty practice, extending to other Australian assets with a physleal connection with Austala, such as mining rights and other Irterests related to Australian real propery. A"non-portolio interest’ isan interest hele alone or with associates of 10% or more in the interposed entity. Net capital gains are calculated inthe same way for non-residents as itis for residents (except forthe 50% discount that is not avalabe for capital ‘gains accrued after 7:80 pm AEST on 8 May 2012 as noted above) and areinchided in the assessable income of the non-resident ‘Altmough a non-resident isnot aquired ta natily the Australian revenue authortles of a disposal at the time the asset sol, a non-tinal 12.5% WHT ‘applies tothe gross proceeds of the sale of taxable Australian property by non-residents (other than fora real property transaction under AUD 750,000), Disclosure is made upon lodgement of the tx return and any amounts withheld are creditable against any actual income tax lability: Where a non-resident becomes an Australian resident, capital assets owned by the non-resident (ther than assets acquired before 20 September 1985 and taxable Australian propery) are deemed to have been acquired by the non-resident for a consideration aqual to the market value of the assats at the timo residence commences, Special provsions also apoly where a osident individual coases tobe a resident, so that assets which are not taxable Australian property are deemed tobe disposed o, unless an election to the contrary is made. An exception to this rule applies for temporary residents. The GGT main residence exemption does not apply to foreign residents. However, in cases where the residence is sold as a result of a'ife event" relating mainly to health and family matters, the exemption can apply where the indhvidual has been a tax non-resident of Austala for a period of sx years or less. Dividend income A. cividend imputation system designed to prevent the double taxation of Australian corporate profits distribvted to shareholders, applies to ‘ividends paid out of Australian-taxed profs of resident corporations (ranked dividends). Resident individual shareholders receiving tranked ‘ividends are entitled to a ranking ose’ of Australian corporate tax paid onthe profits reflecting the dividends. Ifa tanking offset exceeds the tax payable by a resident individual, the excess is refuncable tothe individual CCortain paymonts, loans, and debts forgiven by private companies to sharaholders (or their associat) may be treated as an assossablo (unfrarkble} dividend to the extent that tne company has realised or unrealized profits (itributable surplus, In dition, these deemed dividend rules cover citcumstances where a shareholder (or associate) fs permitted to se an asset owned by a private company, such as realestate, a car oF boat for no fee or ata dscounted rate, Fsident individuals are generally taxable on foreign-source dividend income but ar eligible fora tax offset for freigh taxes paid on such income (800 the Foreign tax rt and tax treaties section for more information), Non-resident individuals recelving franked dvidends are generally not entitled to a franking ost but are exempt from WHT on the dividends, anc {are exempt from WHT on unfranked eividends tothe extant that tne dividends are paid ot of certain forsign-source income and gains, andthe ‘company has made a condult foreign income (CF declaration in relation to the dividend. WIHT atthe rate of 30% falthough this rate may be reduced (usual to 15%) where a tax treaty plies) i imposed as a fnal tax on unranked ‘ividends paid to non-residents. WHT f usualy withheld by the payer on behalf of the payee on the grass amount ofthe dividend and remted to ‘the Australan revenue authorkies Interest income Resident incividuals are subject to Australian taxon interest income from both Australian and foreign sources. A WHT on domestic interest payments by fnancial institutions and certain other investment bodies wil apply to investors who fllto quote thelr tax fle number to the financial institution in ‘the manner requtred by the Commissioner of Taxation In relation to foreign-sourced intrest Income, resident indviduals are generally elle fra tax ofa for foreign taxes paid on such income (sae the Foreign tax rele and tax treaties section for more information), \WHT is imposed on interest paid to a non-resident tothe extent that the interes ie ald by a resident ors an expense of an Australian permanent ‘stabshment (PE) carried on by a non-resident. WHT isnot imposed if the interest derived by the non-resident in carrying on business tough a PE in Australia. In that case, the interest wil be subject to the orginary rates of income tax ‘The ate of WHT s 10% ofthe gross amount of interest paid although this rate may be reduced in imited circumstances where certain tax weatios apply. The taxis usually witiheld by the payer on behalf ofthe payee and remitted tothe revenue authorties, WHT represents a final tax in Australia (nthe intrest income. Rental income Resident incivcuals ae subject to Australian tax on the rental income derived ftom both Australian an foreign property. Non-fesdent incvcuals are ‘subject to Australian tax on rental income dervved from an Australian source, Gross rental receipts are inchided as assessable income inthe individu’ tax return, A deducton for expenses incurred in deriving such Income wil be allowed, Whare the deductions exceed the rental income, the resultant loss may be offset agains the individual's other income,|A deduction isnot allowed for rave costs in connection with a residential investment property, including costs incurred to inspect and maintain the property, colect rent, or visit the real estate agent, even If that isthe sole purpose ofthe travel. In adltion, for any residential ental property ‘acquired under contracts entered into ater 7:30 pm AEST an 9 May 2017, depreciation deduction for items of plant and equipment .3 ‘ishwashors,coling fas, carpet, and hot water systems} in residential investment properties aro hited to those assets that have not previously ‘Tax deductions are denied for expenses related to the holding of certain vacant land that isnot used in carying an a business forthe purpose of producing assessable income, Vacant land does not inchide lang an which there i a substantial and permanent structure of residential promises that 's being constructe, or substantaly renovated, But only where its lawfuly able to be occupied and is leased, hired, or icensed. There are ‘oxcoptions to onsire that a land owner isnot denied deductions when strictures on the ld are affects by natural dsasters or exceptional ‘croumstances, or when the land i ovmed by a primary producer orf subject to an arm's-length lease arrangement to an entity who carries on a business on the land. Foreign income Resident ncivuals are generally subject to Australian ax on foreign-souree income while non-resident are exempt from Australian taxon freign= In action, cartain foreign non-comparably taxed income, which is generally sheltered in lov-tax countries through foreign companies controled {directly or indirectly) by Australian residents may be attributed to Austalan-rescent controllers and taxed in Australia. Ary ncome subject to taxation on altrbution willbe exempt from Australian tax when repatriated to Australia, Under the controled foreign company (CFC) rules, non-active income of foreign companies controled by Austalan residents (determined by reterence to voting rights and dvidend and captal entitlements) may be attbuted to those residents under rules whieh distinguish between ‘comparies residentin listed countries (e.g. Canada, France, Germary, Japan, New Zealand, the United Kingdom, and the United States) and in ‘other ‘unisted" counties. In general i the OFC is resident n an unsted country an it fas te ‘active Income test (typically because teams 5% or ‘more ois income from passive or ‘ain sources), the CPC's ‘tained income’ Nery broadly, passive income and gains, ahd sales and services income that has a connection with Austral) is attributable. Ha CFCs resident a lsted country, @ narrower range of tanted income is atibuted ‘even f the CFC fails the ative income test. Foreign exchange gains and losses Foreign currency gains and losses ar recognised when realised regardless of whather there is conversion into Australian dois, ard are included in or deducted from assessable income, subject to limited exceptions. There ae exceptions lo the timing and charactarsation aspects of the realisation approach where the foreign currency gan or loss is closely linked fo capital asset, ‘To reduce compliance costs with foreigh currency denominated bank accounts caused by the frstin,fstout FIFO) approach manciatd in the rules, taxpayers may elect to disregard gain or losses on certain low balance transaction accounts that saisly a de minimis exemption, or may elect for revvansiaton by estating the balance ofthe account annually by reference to deposits, witherawal, and exchange rates atthe beginning and end ‘of each year. Financial arrangements ‘Tho taxation of financial arrangements (TOFA) rues, which generally apply to financial avrangomants that star to be eld on orator 1 July 2010, do not apply ‘individual taxpayers, other than those who elect to have the rules apply and to certain deferred intrest securities. Where the rules apply, ‘gains and losses trom financial aangements are generally recognised for tax purposes on an accruals basis or on a realisation basis, Exempt income Exemp income that is not subject to Australian tx includes: + Cortain salary and wages directly atvibutable to alimited class of activites (usually government ald programs and defance force personnel serving overseas), which were earned overseas, that re subject to tax in the courty of derivation, ‘+ Non-cash ringe benefits provided by an employer to an employee (such as use of a car, accommodation, low interest loans, ete). These Denis are ge FBT system. lly exemet rom income taxi the har ofthe employee, but the value ofthe bereft is taxed t the employer under the ‘+ Certain government pensions, scholarships, and bursaries. The exempt income rules interact with other rules so that tx losses are offset against certain types of exempt income, and in some very limited ‘cases the exempt income is aggregated with taxable income to determine the rato of tax on that taxable income. Individual - Deductions Employment expenses ‘To the extent that expenses are not reimbursed, residents and non-residents can deduct properly substantiated expenses incurred in earring ‘employment and other income, for example, business-connected travel expenses, automobile expenses, subscriptions to professional or ade ‘organsations catsin nome offce expenses, and protective clothing, [As aresulof the COVID-19 pandemic, the ATO temporarily allowed a shorteut method to simplity how to calculate a deduction for working trom home forthe period 1 March 2020 to 30 June 2022, This shortcut method cover all work from home expenses, such as phone, Intemet, the decline in valieof equipment and furiture, ang electricity and gas for heating, cooling, and igting. A new method is proposed trom 1 July 2022 for working ‘rom home deductions covering energy expansas, nteret expenses, mobile and/or home telophone expenses, stationery and computor ‘consumables using a revised fixed rate method based on the number af hours worked fram home during the itcame year based on records, ‘COVID.12 tests (nclusing polymerase chain reaction and rap antigen tess) are tax decuctiola where thay are purchased for work-related purposes (0. for testing for COVID-'8 to determine whether the ndlvidual can attend or remain at tho place of wor), ‘An employes isnot entitled to tax deduction forthe following expenses: + Costs of raveling to and from the place of work to home. + Exponses ofa private or domestic nature. + Enterinment expenses, Prepaid expenditures are generally only deductible over the period to which the expencitue relates, subject to certain limited exceptions ‘Alowances provided to an employee fr lving-away-from-home are curently subject to FBT that is payable by the employer. A portion of iving- ‘away-from-home allowances in elation to the provision of accommodation and excess food costs is exempt trom FBT, provided certain corsitions {are me The concessional tax treatment of lving-away-fram-home allowances and benefits provided to employees islirited to 12 months forCertain relocation tinge benefits are exemat from FBT. To the extent hat afinge benafitis exempt rom FAT, wil also usually be exempt from income tax. Employer-provided cars ae taxed concessionally under the FBT rules Relocation costs are typically not deductible tothe indvcual ‘employee, Personal deductions Deductions canbe claimed for losses and outgoings incured in the gaining or producing of assessable income. For example, othe extent that an individual owns a rertal propery, deductions would be available for any interest incurred in respect of borowings to fund the acquision of the property, property rates, insurance, repairs and maintenance, and, for Some properties, depreciation on items such as carpets, curtains, and any furisure acquire for te rental property. “Tax deductions are not available for expenses of a private or domestic nature, for example, the cost of personal medlcal expenses, private heath insurance premiums, tho costs of child care (see the Other tax credits and incentives section for more information, almory,Ife surance premiums ‘or iterest incurred in respect of borrowings 10 fund the acquisition of an individual's place of residence. ‘Superannuation contributions Individuals (aged up to 75 yeers) can claim a deduction for contributions mace to complying superannuation funds, regardless ofthe extent of thelr ‘emoloyment-related actives. The additional fax that may apply tothe extent thatthe total ofa superannuation contibutions made in a year for the individual (nclading contibutions made by an employe) exceed the annual ‘concess:onal contrbutons 620" of AUD 27,500 has Been removed with tft from 1 daly 2021 An sncvdual with a total superannuation balanes of es than AUD 600,000 atthe end of 29 June ofthe previous financial year may be entitled to ‘carry forward the amounts ofthe unused concessional contributions cap ona rling basis for five years s0 as to contribute more than the ‘concessional contnibutions cap in Inter years, Charitable contributions Charitable contrbutions of AUD 2 or more are generally decuctibe Whee they are made ta erties that are specifically named inthe tax la oF ‘endorsed by the Commissioner of Taxation as ‘deductible git recipents". However, deductions for such ge cant generate tax losses. That is, ‘generally the deduction i ited to the amount of assessable income remaining after deducting from assessable income al other deductions. Personal allowances Residents receive the fst AUD 18,200 of taxable income tax-free, Non-residents generally do not benef from a taxes threshold, nor do they ‘ua forthe various tax rebates and tax offsets (see the Taxes on personal income section for mare informatio), Family Tax Benefits Provided family income is below certain thresholds, resident individuals (or inividuals in Australia witha special category visa or an approved visa {or family tax benefit purposes) may be entiles to Fanily Tax Benefit payments they have a dependent child ora secondary school student under the age of 20 (who isnot receiving a pension, payment, or other government allowance for whom one cares for atleast 35% ofthe time ‘The limits, rates, and nature of Family Tax Benefit payments (.e. Family Tax Benefit Part A andlor Family Tax Benefit Part 8) vary depending upon family income, numberof children, and ages of chilen, and charge ftom year to year, - Business deductions ‘An individual wil be able to claim a deduction for expenditure incured in gaining or producing assessable income or which is necessarily incued in Carrying on a business forthe purpose of gaining or producing assessabio Income (not boing expenditure ofa private, capital, or domestic natu). Enttlement to a decuction for certain motor vehicles or travel expenses wil, However, depend on satisfying the particular record keeping requirements ofthe substantiation provisions, ‘Asolt-employed individuals ented to a tax deduction for personal contributions made toa complying superannuation fund. See Persona! ‘deductions above for further detail, [A deduction is sllowable for costs ineured in managing tax atts. Losses ‘Subject to some limits and exceptions, where deductions exceed assessable income, an inavidualis able to cary forward tax losses for oeet ‘against assessable income derived in future income years Inividuals are not permitted to canryback losses for Australian tax purposes, ‘The non-commercial los rules prevent losses from non-commercial business activities carried out by an individual from being offset against other assessable income i te year the loss i curred, The rules operate to defer a deduction for the loss, so that it may be offset in ater years against ‘assessable profits from the acti. There ara tests to determine i a business activity is ron-commarcial, Tse rules do not apply ta losses on passive investments such as realestate held for rental, or stocks and shares. There are rules iting the abily to claim losses in respect of boats land eisire facilites’ hich neues holiday houses}, although a bost owner may be able to claim deductions up to the amount of income eamed ‘rom tho boat hing actvty. Non-commercial losses of individuals with ‘adjusted taxable income! of AUD 260,000 or more, ave automaticaly ‘Quarantined for use only against Income from the non-commercial business actvty in future years Capital losses are offset only against capital gain (and are applied to any capital gains before discounting) and cannot be offset against other income. In caleuating capa losses, there fs no indexation of the cost base (see Capital gains inthe Income determination section for more information, Individual - Foreign tax relief and tax treaties Foreign tax relief ‘Australian-resdentincivduals (who are not temporary residents) are subject to Australian tax on thelr worldwide Income, wih a foreign income tax ‘offset (FITO) allowed for most foeigh income taxes paid tothe extent of Australian tax payable an foreign sourced and foreign taxed amounts. Such offsets are, subject to some additonal restriction, also avalable to non-residents Tax treaties ‘Australia ha tax treaties with many counties throughout the work, Under the treaties some forms of income are exempt from tax or qualify for reduced rates. Thase include royalties, ividends, and capital gains. Below s alist of countries with whicn Australia curently has atx tealusta Ine of Man | Romania Belgium laa! Rusia ‘British Vg ands ~ ay Samoa’ canada Japan Singapore cena Kiba sou Ati Cook sands * Korea Spain Denman ate Sweden Fi oral ands * Switzerland France Moxeo Tals Guernsey New Zealand nes Kongo Hungary Norway Unies States * Lited to allocation of taxing rights in respect of certain income derived by specified individuals, such as retirees, goverment employees, and ‘students The Australian government plans to enter into new and update tax treaties in the coming year. I has signed & new treaty with Iceland on 12 October 2022 yet to enter into fore) ‘Australia has also entered into bilateral agreements with a numberof counts in elation tothe exchange of information in relation to taxes, ‘Australla has enacted the Organisation for Economic Co-operation and Development (OECD) Multilateral Convention to Implement Tax Tresty Related Measures to Provent Sase Erosion and Profi Shing (ML). which was signed by Australia on 7 June 2017. The ML! has been ratified, which means that it applies to ‘covered courives’, such as Belgium, Canada, France, Ina, Indonesia, eland, Japan, Korea, New Zealand, Singapore, and the United Kinggom, Individual - Other tax credits and incentives “There are no spectic income tax incentives applicable to an individual working in Australia, However, there area numberof personal tax offsets that may have the effect of reducing tax payable or, in some Instances, the cost of health insurance or childcare - Personal offsets Personal offsets generally take the form of tax rebetes or tax offsets, which are, in most cases, a bls only to resents, Dependant invalid and carer tax offset ‘The dependant invalis and carer tax offset is only availabe to taxpayers who maintain a dependant who is unable to work due to invaliity or care ‘bigations, For the year ended 30 June 2022, the invalid and carr tax ofa is capped at AUD 2,833 and is subject to abatement for the ‘adjusted texable income! of the dependant, cutting out if ths exceeds AUD 11,614, This offstis only avalable where the taxpayer's adjusted taxable income is no more than AUD 100,900. Other personal tax offsets ‘Other tax offsets include offsets for those residing in isolated areas, a Seniors and Pensioners Tax Ose, and rebates for certain lump sums received In adation, i taxable income is below AUD 66,667 a Low Income Tax Offset also applies fr the 2020/21 and ater income years at a maximum of ‘AUD 700 if taxable income is less than AUD 87.501. The Low and Middle Income Tax Otfset last applied to the 2021/22 income year. Medical expenses ‘Atax deduction is alowed for COVID.19 tests (including polymerase chain reaction and rapid antigen tests) where they ae purchased for ‘work-related purposes, There is no tax elie! for any ther medical expenses Health insurance premiums A tax offset (or a rebate provided directly against the premium) is available for the cost of private health insurance premiums (which covers hospital treatment), provided cran eighty ertera are met ‘The applicable tax offset is income tested and depends an the age ofthe incvidual. For the period trom 1 April2019 through 81 March 2023, thee is no entitlement where adjusted taxable income exceeds AUD 140,000 for singles or AUD 280,000 fo familes,regarcless ofthe incvidual's age. For ‘an individual under the age of 65, the offset forthe period from 1 April 2019 trough 31 March 2023 ranges from + 8.202% whore adjusted taxable income is between AUD 195,001 and AUD 140,000 for singles or between AUD 210,001 and AUD 280,000 for families, + 16.405% where adjusted taxable income Is between AUD 90,001 and AUD 105,600 for singles or between AUD 180,001 and AUD 210,000 for+ 25,608% where adjusted taxable Income Is AUD 90,000 o lass for singles or AUD 180,000 oF less for famies, For indlviduals aged 65 years or over, higher offet entitlements are avaiable and can be as high as 52.812% for those aged 70 years and over with _agjusted taxable neome of AUD 90,000 o less for singles or AUD 180,000 or les fr famiies, ‘The offset entitlements are indexed annually Child care subsidy ‘Acid care subsidy is avaiable to assist aligible families with the east of ehilé care (0. long day care, family day care, occasional care, outside ‘school hours care, vacation cae, and registered care). The chil care subsidy Is not administered through the tax system. Spouse contribution tax offset Warresident spouse's assessable income (and reportable fringe benefits and employer superannuation contibutions) does not exceed AUD 40,000, @ resident may make a maximum rebatable contribution of AUD 3,000 for the spouse including a defacto spouse) to a complying superanauation fund ‘or retirement savings account (RSA) and obtain a spouse contributions tax offset. Its also a requirement thatthe spouse did not have a total ‘superannuation balance in excess af the balance cap, .e. AUD 1.7 milion at 30 Jure 2021 for contributions made from 1 July 2022, or exceed the non-coneessionsl coriution eap, The maximum offet fs AUD 540 (the tax offset Is the amount of the contribution x 18%) ang applies the ‘spouse's assessable income (including reportable fringe Benefits and employer superannuation contributions) fs not more than AUD 37,000. Innovation investment offset Investors in an Australian Eary Stage Innovation Company (ESIC) (broadly, a compary that's at an early stage of establishment fo develop new oF ‘ignfcartly improved innovations wth the purpose of commercial sation to generate an economic return are provided witha non-refundable ccaryforward tax offset equal to 20% of the amount pad forthe Investment, subject fo an annua feat cap oF AUD 200,000 (nclucing afitates) Exploration offset ‘Australian resident sharcholders (ther than corporates) who have Invested in certain Australian resident companies that undertake grecnels minerals exploration in Australia may receive ‘exploration credits that entitle them to a refundable tax offset equal o the amount of the cre In prose terms, an exploration credits a conversion ofthe company’s tax loss attributed tothe company’s exploration or prospecting expenditure into a distbutabe tax benetitin the form ofthe offset available to the investor. ‘The Junior Minerals Exploration Incentive (JMED apples in relation to newly issued shaves ineligible exploration companies made in the 2017/18 through to the 2024/25 income years Small business income tax offset ‘Amal business income tax offset applies to incivcuals who run smal businesoes (businesses with an aggregate annul turnover of lass than AUD S millon or who pay income tax on a share of the income ofa smal usiness partnership ots The offset is limited to a maximum of AUD 1,000 and for the 2021/22 and later income yaars equates to 16% ofthe income tax payable on the portion of an inalvidua's income thats small Business income. Individual - Tax administration Taxable period ‘The Australian income year for tax purposes consists ofthe 12-month period from 1 July to 30 June Tax returns and assessments ‘A resicent individual i required to file an income tax return where taxable income exceeds the tate teshold of AUD 18,200 (800 the Taxes on ‘personal income section for more infomation) A non-resident easing AUD 1 or more of Australan-sourced income must flea return. Theres no Joint assessment or joint fing in Australi. The income tax return is due fr fling by the folowing 81 October, unless an extension is avallable for tax agent lodged rotums, The Australian Taxation Otfice (ATO) wilissue an income tax assessment of taxable incomeltax loss and tax payable itary) o the invidual based ‘on the income tax return. The Commissioner of Taxation wil also issue individual taxpayers who have ataxlabilty of at least AUD 100 witha tax receipt, which wil set out details of how thelr tax money fs spent by government. Payment of tax When salaries are paid by an Australian employer or by a nor~resient employer from a base in Australia, amounts are required to be withheld from ‘such payments under the pay as you go (PAYG) withholding regime. PAYG withholding tax must also be withheld from payments to contractors if an ‘Australian Business Number (ABN) s not provided by the contractor and the payment amount cisregerding GST exceeds AUD 75. Employees and holders of certain investments must quote theirincome tax fle numer to their employer and/or relevat fnancalinstituton if they wish to prevent tax fom being withheld (tthe top marginal ate) on income paid to thor. In alton, a tax ie umber is aquired to be quoted to ‘employers to prevent tax from being withheld in respect of discounts rece-ved with respact to shares and ight/ontions acquired under an employee ‘hae scheme (S00 Equity compensation under the Income determination section for more information. ‘Anon-fnal WHT applies to the gross proceeds ofthe sale of Australian real property or indirect Australian real property interests (broadly, interests of ‘atleast 10% held in an Australian ently, whose majorty of assets consist of Australian real propery, subject to certain exceptions. The current rats ‘of withholding is 12.5%. One ofthe main exceptions isin relation tothe sale of real property with a market value of less than AUD 750,000 or when the transaction occurs on an approved stock exchange. There is also no witnholaing wnen the vendor disposes of ether: + Australian real property and provides the purchaser with a clesrance certificate relating to Australian residency) from the ATO, oF ‘+ any other asset where the purchaser is gven a vendor declaration stating that the vendor sa resident or the assets not an Iniect Australian real propery interest ‘The rate of withholding can also be vatieg [A PAYG withholeing regime apples to require the deduction and remittance of taxes on behalf of foreign resident indviduals and entties that ae in receipt ofthe following types of payments\eracpent a company, 20 Pyents or perfoming arts, portsparson,inciding payments to suppot sa sich asa rectors, bodyguorss, coaches, hakeresor, and peranal nore ‘recent san inéviual thsapplable no resort marginal at PAYG quarter instalments of tax calculated on certain income derived during the previous quarter are payable by certain incviduals. The due dates for these quarterly payments are normally 28 October, 28 February, 28 Apri and 28 July The tax instalments are based on the total of certain gross income such a fo0s for services, sales in carrying on a business, intros, dividends, ana royalties derved during the previous quarter (out not slaty or wages), multiple by an instalment rate provided by the Commissioner of Taxation to ‘termine te tax payable, The inciviual may vary this instalment rate, but this i less than B5% of the rate thal should have applied, an interest ‘charge wil be payable Indiviguals (and some other enttes satisfying cerain tests) may choose to pay quarterly instalments based on their ‘GOP ‘adjusted notional tax. if hss method is chosen, the instalment payable vil be based on the tax of a previous year adjusted for movements in ‘Australia's GDP and the choice will continue until atleast the frst instalment quarter ofthe following year. Indviduals whose notional tax amount is. less than AUD 8,000 and who are not registered, nor requred to be reqsteed forthe GST, may, in mast cases, choose to pay a single annual instalment. Tax audit process ‘The ATO will ssue an assessment of income tax for each income year and wil ely on information and statements made by the taxpayer in the income tax return in making the assessment. However, the ATO car alt the affairs ofthe taxpayer folowing the making of the assessment or seek ‘itional information as 200s fi Statute of limitations {A standard two-year amendment period generally apples to an individual who does not carry on a business (unless the Individuals smal business entity) is nota partner ina partnership, ard is nota beneficiary ofa rust. Otherwise, a four-year ime limit applies for amending an income tax assessment. Whore an amoncied assossmont increases the taxpayor'sHabily to tax, an administrative penalty and interest on any underpaid “amounts may be levied in adction tothe adstional ex laity Topics of focus for tax authorities ‘The ATO currently has a privately owed and wealthy groups tax performance programme (‘Next 5,000), which covers Australian resident individuals who, together with ther associates, control wealth of mare than AUD 50 milion. The ATO will usa sophisteated data matching and analytic models {identity wealthy individuals and link them to associated enites. The am of ths programme isto provide greater assurance tothe community that high wealth private groups are paying the right amount of tax. During the year, the ATO periocally releases its specific compliance focus areas that ae attracting its attention The folowing are curent areas ot focus fr the ATO for india + Worlerelated expense claims (2.9. working om home expenses, overnight travel, motor vehicle expenses for travel between home and work ‘work-related proportion of use for computers, hones and electronic devices) + Rental property income and expenses (e.g. excessive deductions for holiday homes, inappropriate spliting of income and deduction fr jointly ‘owned properties, interest deductions being claimed forthe private proportion of loans) ‘+ Capital gains from exypto assets, property, and shares. + Record-Keeping Individual - Sample personal income tax calculation Assumptions + Year ended 90 ne 2028 + Resident ncvdval ering both Austalan and foreign sourced income, ‘+ During the income year, the individual sold an investment property which had been held for greater than 12 months ard realised a capital gan. “There were no net capital losses cared forward from por years. Prior‘ gisposal, the individual derved rental income trom the property, ard incured interest cost in connection with borrowings to acquire the property, ‘+ The inlvidual has fll private patent hospital cover forthe entire income year, and therefore isnot lable forthe Meclcare levy surcharge. Tax calculation Assessable income ‘usalan source interest come 00 Fully tarkea (nt) 00 ross up frank crests (700 x 3070) 00 1.000 Foreign sourced evden income (grass of WHT of AUD 200) 2000 Net capa gan on eeposalo propery:Ccontbase (150,000) ‘ross capa gain (proceeds ess cost base) 30.00 50% CT dlsount (15,000) 15.000 140200 Precve clathing (200) Interest a repairs on invstent property 6250) (Charabe contibaions (59) Total allowable dedvctions (5700 texabe income 134.500 Tex on totale income (29.457 + 37% x 14,500) mew Meare ley (194,500 2%) 2.690 Foreign income tax ols (200) ranking cea (909) Individual - Other issues Tax equalisation ‘tax equalsaton plan ensures that an employee's total tx burden wl remaln the same asin the rome county. the akin the overseas country is ‘eater han that whieh would have ben nce nthe hore county (isualy refered to as te "hypotetcal tx labiy), the employer remburses {he excess. the toxin the overseas couriry is ss than th hypothetical tax tabi, the employer elaine the Benet This plan requires the calculation of the employee's hypothetical home county tax. The hypothetical tax is generally calculated on a base salary and ‘other base remuneration, asin the home county - Residential property vacancy fee for foreign persons |A property vacancy fee and annual reporting is applied to certain foreign owners of Australian residential property who submit a Foreign Investment Review Board (FIRB) notice or application (r would be so required had an exemption not apple) to acquire a res'dential dwoling or residential and {a any time from 7:20 pm AEST on 9 May 2017. An individual who is rot ‘orca residert in Australia (with certain exceptions, such as Australian ‘’chzens), nchiing a holder of a visa that permit the indviual 0 remain n Australa for only ined perio, e subject to these rules, In summary + the foreign owner of Australian residential realestate witha Gweling is required to give the Commissioner of Taxation an annual ‘vacancy fee return’, within 30 days after the end ofa vacancy year’, even if there is no lilly toa vacancy fee, and + a vacancy esis imposed on the foreign owner where the property is not residentially accupiedin the specified manner (Le. occupied as the residence ofthe owner [or ther relatives] or genuinely ccupied, or available fr accusation [ata market rent) asa residence under lease or leence wit ater of 30 days or moc) ora least 185 days inthe ‘vacancy year, on cases where the annual vacancy fee return fs not lodged The relevant vacancy year’ broadly bated on the fist and each successive 12-month period commencing from the owner's inal right to ceupy the dweling Australia contacts Lynda Bramm Principal Pw Aural Kevin Lung Tax Pana Pac Austral(©2017 -2028 PwC. Argh resawved, Puc tees tothe PwC network anlar one or more of ts member fms, each of wich sa sepurate legal nt. Please seo uy cs comfsnucia for turer deal