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Many Chinese students and immigrants who come to Australia now often receive overseas remittances due to their financial needs for life and home ownership. Most of these remittances come from relatives, friends, or remittance companies. How should these revenues be explained?

Since the beginning of last year, the Australian Taxation Office has begun to inspect overseas remittance projects on a large scale. If a Chinese person with a bank account in Australia has received overseas remittances in the past few years but has not filed tax returns, they may receive an Australian Taxation Office’s The notice requires taxpayers to give a reasonable explanation within 28 days. If a reasonable explanation is not given within the prescribed time limit, these remittances will be recognized as the taxpayer’s personal income, and will be required to make up the tax, interest penalties for delayed tax payment, and dereliction of duty penalties for incorrect tax payment.

So, when you receive a notice from the tax bureau requesting an explanation of overseas remittances, how should you respond? Here, this article gives some professional opinions for reference in different situations (different classifications of overseas remitters) (the following materials are usually required by the tax bureau):

When your overseas remittance is directly remitted by relatives, please prepare the following materials:

1. The bank statement of the sender. It can clearly show that the money is sent from your relative account, and the time and amount are consistent with the time and amount you received the money;

2. Proof of kinship and a notarized copy with English translation. If it is a parent's remittance, then the household register plus the notarized translation of the household register is enough; in other cases, it needs to be issued by the government agency where the relative is located, and the notarized translation shall be issued by the notary agency.

3. Personal declarations from relatives. The content of the statement mainly states that the nature of the remittance is a gift or interest-free loan to you, signed by relatives, and a valid translation produced by an Australian translator with level 3 translation qualifications.

When your overseas remittance is remitted by your relatives through others (due to foreign exchange amount restrictions), please prepare the following materials:

1. The bank statement of the sender. It can clearly show that the money is remitted from the account of another person, and the time and amount are consistent with the time and amount you received the remittance;

2. The bank statement of your relative. It can be clearly shown that the money is sent from your relative account to others, and the time and amount are consistent with the time and amount of the money received by others;

3. Proof of kinship and a notarized copy with English translation. If it is a parent's remittance, then the household register plus the notarized translation of the household register is enough; in other cases, it needs to be issued by the government agency where the relative is located, and the notarized translation shall be issued by the notary agency.

4. Personal declarations from relatives. The content of the statement mainly states that the nature of the remittance is a gift or interest-free loan to you, signed by relatives, and a valid translation produced by an Australian translator with level 3 translation qualifications.

When your overseas remittance is remitted by your relatives through a foreign exchange company (such as: Zhonghui International, Huitong Finance, etc.), please prepare the following materials:

1. Your relative's bank statement. It can clearly show that the money is sent from your relatives account to the account designated by the exchange company, and the time and amount are consistent with the time and amount of the exchange company receiving the money;

2. Ask the exchange company for exchange statements and other exchange materials, which can clearly show that the exchange company will remit the money to your account in Australia within 48 hours after receiving the remittance;

3. Proof of kinship and a notarized copy with English translation. If it is a parent's remittance, then the household register plus the notarized translation of the household register is enough; in other cases, it needs to be issued by the government agency where the relative is located, and the notarized translation shall be issued by the notary agency.

4. Personal declarations from relatives. The content of the statement mainly states that the nature of the remittance is a gift or interest-free loan to you, signed by relatives, and a valid translation produced by an Australian translator with level 3 translation qualifications.

Information submission time:

The tax bureau will require you to submit relevant documents within 28 days. If you think that the time is not enough, you can call the tax bureau to apply for an extension to submit the documents. The tax bureau will generally approve and give you grace time for submission. If you still think there is not enough time after an extension, you can apply to the tax office for an extension again.

The above is the information that needs to be prepared in response to the tax bureau’s inspection of overseas remittances. Regardless of the probability of being spot-checked, all the information is to clearly prove that the source of the remittance you received is a gift or loan from your relatives rather than Your income from overseas investment. In view of the fact that some information will not be easy to prepare and obtain due to a long time, in order to protect your personal tax interests in Australia, we recommend that you collect and keep the above information in time after receiving the remittance for inspection by the tax bureau.

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