As is often the case with many personal finance issues for Australian expats, there are many myths floating around when it comes to the implications of transferring funds back from Singapore to Australia. In this week’s article, we’re going to separate the fact from the fiction and outline what you actually need to pay attention to when it comes to FX transfers to Australia.
Below we’ve outlined the key considerations that you need to be aware of as an Australian expat in Singapore, and included are some of the common myths that we hear through the expat circles.
- Double Taxation Agreement with Singapore
As many Australian expats living in Singapore will be aware, there is a Double Tax Agreement (DTA) between the two countries, which among other factors means that no ‘double tax’ rate will be applied to your income. This also means that as a tax resident of Singapore, once you have already paid tax on your income, you generally would not need to pay tax again should you decide to repatriate those funds to Australia. The same would apply if the funds were derived from a capital gain on shares or managed funds that were bought and sold while you’re living offshore if these funds were repatriated back to Australia.
It’s important in this case to determine the source of funds, any tax exposure to Australia that does exist such as if the shares were purchased while you were living in Australia before you moved offshore, as well as your tax residency status.
- Your Tax Residency Status
If you are deemed to be an Australian tax resident, which you can read more about in my recent post here, then you will need to be declaring your overseas income in your Australian tax return to ensure that you’re paying the appropriate amount of tax. This also applies to anyone living in Australia with assets offshore that should be disclosed to the Australian Tax Office (ATO). If you are not deemed to be a resident of Australia for tax purposes, and you safely meet the criteria to be a Singapore tax resident, then you would not need to be declaring your income or other assets (excluding Australian Taxable Property) in your Australian tax return and can rest assured that this will remain taxable in Singapore only.
If you’re unsure about your tax residency status, it’s important to speak with a professional financial planner and/or accountant to discuss and review your situation. It’s important that you don’t simply assume that because you’ve been out of the country for many years, that you won’t be deemed a tax resident of Australia.
- Size of Your Currency Transfer
One of the more common myths that we hear is that as long as the amount transferred is below A$10,000, then this will go unnoticed and won’t raise any red flags. Once upon a time, this may have been the case, however it could not be further from the truth now. AUSTRAC is the Australian Government intelligence agency that monitors all transactions and specifically looks to identify issues of money laundering, tax evasion and terrorist financing. If you make any transfer to Australia from Singapore, then it will be noticed, so you do not need to be too concerned about the size of the transfer, but rather the purpose, your tax residency and the source of the funds.
- Source of Your Funds
For most Australian expats living in Singapore, the most common source of funds sent back to Australia is simply from salaries. In most cases, tax will have already been paid in Singapore and these funds can be transferred back to Australia without too much cause for concern. As long as you are abiding by the relevant laws, understand the Double Tax Agreement between the two countries, and the relevant tax has been or will be paid, then these types of transfers are unlikely to raise issues.
There are many licensed FX transfer companies operating in Singapore now, and we’ve highlighted a few of these below:
Remember that it’s important to consider both the flat fee and the FX margins applied to the exchange rates when comparing your options for your transfer. For small amounts of $10,000 and below, then the rate difference can often be quite insignificant, however when this is larger, spending a small amount of time upfront can lead to hundreds or even thousands of dollars in savings.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group, specialist division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian expats in Singapore.
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Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.