The Australian Taxation Office warns: Don't want to be troubled? You must remember these 3 rules (with a complete guide to practical tax filing in Australia)

Introduction to the Australian Taxation System

Practical common sense of taxation and tax refund in Australia

1. Tax number application

When you arrive in Australia, whether you are working or studying abroad, you should apply for a personal tax file number (Tax File Number) as soon as possible. I want to remind everyone that the personal tax number is confidential information, do not disclose it to others at will! Only banks and other institutions can ask you to provide a tax number.

2. What is "Financial Year"

刚来澳洲的华人可能都不明白过：为什麼每年的7月1日到来年6月30叫做Financial Year。一个Year不是从1月1日到12月31日吗？

It turns out that in Australia, from July 7st to June 1th of the following year, it is the calculation cycle of personal annual income. Therefore, how much income you have in Australia, and how much tax should be called, is not calculated in natural years, but in the fiscal year period mentioned here.

3. Annual tax filing time

每年的7月1日到10月31日就是法定的报税期，如果你委托会计师报税的话，可以延长到次年的3月31日。您必须在此期间向 ATO 申报上一财年的个人收入税。

4. Main taxes

Australia is a country with a tax-sharing system, and its tax revenue is divided into central tax revenue and local tax revenue. among them,

• Federal taxes include: personal income tax, corporate income tax, sales tax, welfare insurance tax, customs duty, consumption tax and other taxes, as well as the profits paid by federal state-owned enterprises, etc.

• State government taxes include: payroll tax, stamp tax, financial institution tax, land tax, debt tax and other taxes

Australia is different from other tax-sharing countries in that the main tax is different: Australia's main tax is direct tax, and personal income tax in direct tax is the most important. Personal income tax accounts for approximately 60% of the entire federal tax revenue.

5. Personal requirements for submitting tax returns

Australian tax law stipulates that anyAustralian tax residents, Regardless of whether the income is derived from within or outside Australia, you need to declare income tax to the Australian Taxation Office (ATO).

Generally speaking, as long as the individual lives in Australia orThose who have lived in Australia for more than 183 days may be deemed to be an Australian tax resident and be liable for taxation.

Individuals who do not have permanent residency or citizenship status do not mean that they can be exempted from taxation obligations. When the Australian Taxation Office assesses whether an individual is a tax resident, it will consider other factors, such as individuals, in addition to the residence and number of days of residence. International students are also tax residents in terms of where their main business is located and whether they intend to live in Australia for a long time.

remind: Many international students have an option when applying for a tax file number. Ask you if you are “Resident on Tax Purpose”. Don’t mistake it for asking if you are an Australian resident or PR, but if you areAustralian tax residentIf you meet this condition, you should choose Yes.

6. Preparation of tax filing materials

There are many kinds of documents for tax filing, mainly including:

• Tax return or assessment notice
• Payroll
• All other income records, such as pensions, welfare payments, stocks sold, rents received
• All expenditure vouchers related to work, business, financial investment (receipts, invoices, air tickets, bills, private health insurance numbers, income and expenditure documents for spouses and children, valid notes, etc.)
• Company or small business account book details

If you have undocumented expenses, such as train tickets, as long as there is a reasonable calculation method, the tax bureau will also approve it. All tax returns must be kept for 5 years because the tax bureau conducts random checks every year. During the spot check, all vouchers are based on statements, but occasionally reasonable "forgot" may be accepted by tax officials. If it is verified that the wrong report or overreport is not reported, the fine will be a lot, at least 13% of the annual income. Generally speaking, work-related expenses below $300 generally do not need proofs, and you can get a tax refund based on your own records.

7. e-tax submission method

One of the easiest ways to submit online tax returns is to use online e-tax (electronic tax filing software). E-tax is a free electronic tax filing system available on the Australian Taxation Office website, which can be used 7 hours a day, 24 days a week.

As long as you search for E-tax on the ATO official website, you can download E-tax. The biggest advantage of using E-tax is that you can immediately see how much tax can be refunded or how much you need to pay, but the premise is that you must have basic tax knowledge, so as not to get the amount you deserve because you don’t know how much you can claim, or Too many claims were reviewed by ATO.

Use E-tax to file your own tax, the materials to be prepared include:

• PAYG Payment Summary provided by the employer,
• Tax number
• Bank account number (if you choose directdebit)
• Medicare card number (if any)
• Annual bank interest
• Investment (if any) stock dividends
• Rental income and expenses of investment housing (if any)

If it is the first tax filing and there is no Notice of Assessment, ATO will ask you to provide some information that only you know, such as the annual pre-tax salary on the PAYG summary. If you have a spouse (couple/cohabiting), you may need to fill in each other's information.

Finally, fill in the bank account number. ATO will automatically transfer money to this account. Make sure that the BSB and Account Number are correct. After completing these, enter the income and work expenses section, which depends on your personal circumstances.

Current Australian personal income tax rate

From the above table, it is not difficult to find that nearly half of the money of high-income people has to be handed over to the tax bureau, so everyone should study carefully and do a good job in investment, financial management, and tax refunds.

Reasonable and legal tax avoidance

1. Are willing to spend money to hire an accountant. If you have your own business, or have a house, car, or family, and you have multiple sources of income and expenses, generally speaking, don’t file your own taxes. You should find a good accountant. He can not only help you with the accounting, but also professionally answer inquiries from the tax bureau on your behalf.

2. Keep the proof of reasonable expenditure. Many reasonable expenses can be used for tax refunds. Because they are likely to be able to declare tax refunds reasonably. For example, computer upgrades, repairs, batteries, car repairs, insurance, gasoline, entertaining customers, travel expenses, etc.;

If there is an invoice for investment housing, purchase of furniture, housing loss, Internet access, cleaning, telephone costs, etc., it can also be provided.

3. If the couple’s income is one high and one low, or one has nothing, the high-income party can purchase a spouse’s pension for the low-income party, up to a tax concession of $540. Of course, there are other ways, such as changing the average property owned by both parties to a higher proportion of the high-income party, or the high-income party paying housework wages to the low-income party (with written proof).

4. Investing in Australian real estate has become a popular tax refund method in recent years. Especially in the past few years, taxes can be deducted on depreciation, mortgage interest, and maintenance.

5. If you have several properties, try to live in the property with the greatest value-added. If you need to sell, it is best to be at least one year later, so you can enjoy a 50% value-added discount. If you want to sell your investment house in the future, try to sell your investment house when your annual income decreases, such as when you retire, quit your job, or get sick (do not want), so that you can pay less VAT. If you have an investment house and want to get a pension, remember to transfer your assets 5 years before you retire, otherwise it will still be included in your retirement assets.

6. Register a small business. This method can also help you get a tax refund. Generally speaking, ordinary migrant workers do not have many items for tax refund, but if they participate in business, there is plenty of room for tax refund. For example, after working in stocks, trading more than 40 times a year is the best way to make money, but if you lose money, you can report the loss and combine it as a negative number in your annual income, so you can pay less tax.

7. In Australia, there are some other tax avoidance methods. If you are a business operator, you can set up a family fund to distribute the profits from the business to each family member;