Australian expats should prepare for a new round of ATO review
and audit activity. The ATO has announced a list of overseas banks
it will request information from. The list includes key banks such
as the ANZ, HSBC, Citibank, Deutsche Bank, Bank of China and Credit
This information will be used in identifying Australian tax
residents receiving income in offshore bank accounts.
I'm an expat – why am I affected?
In our experience, expatriate Australians living and working
overseas, but with some residual connections to Australia, are
often targeted in ATO review and audit activity. This has become
increasingly common as the ATO's data matching capabilities
In recent years the ATO has applied an expansive meaning to its
interpretation of the word 'resides' in tax law, often
arguing that a person who has sufficient connections (or
'continuity of association') with Australia remains a tax
resident despite living and working overseas: see our previous
We were recently involved in the successful AAT application in
Dempsey (see our alert
here) where the AAT rejected an expansive interpretation of
However, the ATO's
Decision Impact Statement from Dempsey indicates that
the ATO will continue to pursue Australians working overseas who
retain connections with Australia.
How do I manage a response to the ATO?
If you are contacted by the ATO, it is important that you
organise a detailed response and provide relevant evidence. The
first impression is the most important.
In addition to providing evidence, the response needs to include
explanations for why you are a non-resident, based on the four
residency tests in the Australian domestic tax law and any
'tie-breaker' tests if you were living in a country with a
double tax agreement with Australia.
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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