Hi I have made a couple of large investments in the United States and was wondering when it comes to taxes do I have to pay taxes in both countries or do i just have to pay taxes in Australia? Also if only in australia do i only pay taxes when i move the money into my account or when it is made offshore?
Pay tax in the country that have the lowest rates.
Make sure you claim as many expenses as you can.
Charge your USA account for Australian IP investment. You made no gains then in USA, zero tax. You'll pay tax in Australia on this IP investment. But if you're rich, just set up a Cayman Islands account like the Coalition does and charge from that as Cayman Islands IP instead.
What, are you too poor to do this? Haha!
You're supposed to get someone else to set it up on your behalf, that way you can claim ignorance when questioned about the morality of it.
But if you're rich, just set up a Cayman Islands account like the politicians does and charge from that as Cayman Islands IP instead.
FTFY.
Politicians do?
Yes that's even better.
Contact Euro Pacific Bank and they will help you with this small tax issue to your fullest satisfaction. Seems to be the go to place these days for a lot of high wealth Aussies.
Australia and USA have a Tax agreement.
If you pay tax in the USA, then you can claim the amount of tax paid off your tax here in Australia.
A very very simple search will lead you to the ATO website
https://www.ato.gov.au/Individuals/Income-and-deductions/In-…
and this then links to this.
https://www.ato.gov.au/Individuals/Tax-return/2014/In-detail…
And in general, if you are an AU tax resident, all the usual local laws apply for when tax is liable. So if you sell in the USA and make a capital gain, you must pay tax, even if the profit remains in USD.
I have US domiciled ETFs and my GF has US based shares. Neither of us have bothered with W8BEN-e forms yet and in both cases the issuer (Vanguard in my case) or share registry (Meryll Lynch I believe) retains 30% tax for the US gov't. If you lodge a W8BEN-e form the USA tax is reduced to 15%.
When you fill out your my-tax form it will ask if you received any foreign dividends at step 1. Later it will ask you what these dividends were.
IIRC at:
20E you put the "Assessable Foreign Source Income" (the dividend for that FY)
20M is "Other Foreign Source income which for some odd reason is always the same figure as 20E on my form
20O is the "Foreign Income tax Offset" which is the tax retained in the USA
To be honest, they are a pain in the khyber and I'll be glad when we don't have to deal with them anymore.
Would you not look into this before you start?
I would get professional taxation advice on this one