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Why do non-residents pay significantly more tax than residents?

Discussion in 'General Chat' started by So_Cynical, Jan 10, 2011.

  1. So_Cynical

    So_Cynical The Contrarian Averager

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    I've been looking into over seas retirement and was rather shocked to find out that Non-residents don't get the tax free threshold and are taxed at 29 cents in the dollar for all Aussie income under 35K. :eek: that's almost twice the normal rate!

    Seems a little bizarre since a Non-resident wouldn't be actually using any Govt services etc and thus costing tax payers money, wouldn't it make more sense to tax Non-residents less...its seems like there penalising people for leaving when they should be encouraging them.

    Am i missing something here? what do people do to get around this..i figure its cheaper to pretend like your still living here, do the ATO check immigration status?

    http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm
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  2. poverty

    poverty

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    I'm pretty sure those Non-Residents tax rates apply to people earning money inside australia who are not residents. IE/ People on working holidays, Student Visas etc.

    If you no longer live in Australia and have basically severed ties do you even have to pay the ATO anything. Maybe CGT if you sell some shares? Any income you earn from investments your new country might need you to pay income tax on there, you don't want to be paying it twice.
     
  3. bellenuit

    bellenuit

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    I believe if your are a resident who permanently leaves Australia, your assets are deemed to have been sold at the date of departure and you are subject to CGT on the gains thereon. So be careful......
     
  4. So_Cynical

    So_Cynical The Contrarian Averager

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    Those rates apply to Australian citizens no longer living in Aust but still generating an income here, like dividends and or rental income etc....that's the way i understand it to be so far, seems a bit silly but there you go.

    There are a few countrys where you can live as a type of permanent resident and pay no tax on income generated out side of that country.
     
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