Aside from the abundance of great food to try, safety on the streets, and endless travel destinations just a short flight away, one of the greatest benefits for Australian expats living and working in Singapore is the TAX SAVINGS.
To put this into perspective, let’s assume that you are earning $200,000 per year. As an Australian resident, this would result in a net income of approximately $132,000. As a tax resident of Singapore, your net income would be approximately $180,000. That is just short of a staggering $50,000 saving, EVERY year!
Many people make the unfortunate mistake of assuming that as soon as they’re no longer working in Australia, they automatically cease being a tax resident. This unfortunately is rarely the case. There are a number of key steps, which I’ve highlighted below that you can follow to support your status as a non-resident of Australia for tax purposes.
Before we begin, you can also take the ATO’s Tax Residency test here – https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/Residency-tests/
- Driver’s License
It is often a wise move to allow your Australian driver’s license to expire and to obtain a new license in your country of residence, Singapore.
- Immigration Card
Now that you are no longer residing in Australia, it’s important that you fill in your immigration card correctly when entering and exiting Australia.
- Health Insurance
It is worthwhile suspending your domestic (Australian) private health insurance and taking out cover in your country of residence, Singapore.
- Update Your Address with Share Registries
Do you currently hold shares? It’s important that you update your residential address with the relevant share registries.
- Updating your Mailing Address with Key Providers
It’s important that you update key Australian providers with your new overseas residential address.
- Cancel Australian Memberships
As a non-resident of Australia, it could be difficult to justify why you’ve kept your West Coast Eagles membership (for example). It would be wise to cancel these and take out new sporting memberships overseas.
- Sell / Lease Your Australian Property
For many expats, when leaving Australia, they will rent out their Australian property. This highlights that you don’t have an intention of returning in the short-term and it is simply an investment asset.
- Advise Australian Banks of Change of Address
It is a good idea to advise your Australian banks of your new non-resident address, to ensure that withholding tax on your interest is correct.
- File Non-Resident Tax Returns in Australia (where necessary)
If you still have Australian property with Australian taxable income that you must declare, it’s important that you file your Australian tax return as a non-resident.
- Set Up Your New Home Overseas
Sign a long-term lease, purchase a property, take out life insurance and club memberships, send your kids to overseas schools, and ensure that it’s clear that Singapore is your new home.
These are just some of the steps that you can take to show that you are a non-resident of Australia for tax purposes. I hope you find them helpful.
*Please note that these are just general tips and it is not tax advice. For professional advice you should consult a qualified accountant or tax agent.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.