Receiving money in Australia
Receiving money in Australia can incur taxation depending on the amount sent and the reason for the transfer.
The Australian Taxation Office (ATO) is the regulatory body responsible for collecting taxes on behalf of the country.
Monitoring money transfers to Australia falls to the Australian Transaction Reports and Analysis Centre (AUSTRAC), the regulatory body to contact when declaring transfers sent to the country.
In general, these factors will affect whether your money transfer is taxed:
The source of the funds: Are the funds from a pension, overseas gift, selling your home abroad, or inheritance fund?
Your residency status: Are you an Australian resident?
The amount of money transferred: Does the amount you send exceed that country's tax limit?
When you need to pay taxes for receiving money in Australia from abroad
In general, if you receive any income from abroad while in Australia and fall within the AU tax brackets, you will need to pay tax.
Listed below are a number of scenarios where you may be asked to pay tax on your money transfer:
Personal income
Money sent to you as payment from overseas, for work conducted, is taxable. This includes part-time or full-time work, as well as freelancing
Business
Income generated from your business is taxable, regardless of where in the world the company is operating
Pension or superannuation
Money received as part of a pension plan will need to be declared on your next tax return
Real estate
If you own a property abroad that is generating rental income you will need to pay taxes on any profits made
Money transfers exceeding 10,000 AUD
Any transfers exceeding 10,000 AUD must be reported regardless of the currency, number of transactions, and your citizenship status.
Tax-free money transfers to Australia from Abroad
Certain types of money transfers are exempt from taxation, according to Australian law, and listed below are the most notable:
Moving to Australia
If you are moving to Australia funds that you bring with you are not taxable, but must be declared
Inheritance
Receiving an inheritance from abroad is not taxable in Australia, depending on how the money is used. For example, if you decide to invest the inheritance money, then it might be liable for taxation
One-time gift
In many cases, a monetary gift will not qualify as a taxable transaction, but this will depend on the reason for the transfer. For instance, if the money is related to business activity or employment, then taxation may well apply
The examples above are generalized instances that require further breakdown.
The best way to know if you need to pay taxes is by consulting a tax specialist who can explain the specifications of Australian tax law and outline the amount you might have to pay.
Reporting money transfers in Australia
We understand that you might be having trouble figuring out when you need to report money transfers made to Australia.
Regardless of your citizenship, you must declare the receipt of any amount exceeding $10,000 AUD ($6,987 USD).
*Confirm any guidelines or changes based on your needs with official AUSTRACT guide here.
Any foreign money transfers made to Australia must be reported within 10 days as part of an International funds transfer instruction (IFTI-E) report.
This type of report will be submitted to the regulatory body AUSTRAC which is the government agency responsible for combating terrorism and money laundering in Australia.
Australian laws require the following details to be included in an international money transfer report:
Full name and contact information of both sender and receiver
Recipient bank details including SWIFT code and account number
Total transfer amount and currency used
For business transfers, details such as company name, type of business, and Australian Business Number (ABN) should be included
One of the benefits of using a money transfer company is the fact some providers automatically file a report on your behalf as is expected by the Australian government.
Each money transfer company will employ its international remittance threshold when it comes to filing a report.
Reducing Your Tax Bill
To reduce your tax bill, you must ensure that all funds transferred from overseas to Australia have been accurately declared.
Even if you're not necessarily expecting to have to pay tax on those sums.
Working with an accountant is one of the best ways to ensure you are always in keeping with your country's tax regulations, but it will also allow you to figure out any exemptions.
A bit more on taxes in Australia
Can you send money to Australia without paying taxes?
What happens if you do not pay taxes for international transfers?
What steps can I take to avoid tax or legal problems?
Help & FAQ
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Let's recap: Tax implications on transfers to Australia
There are several instances where you have to pay taxes when sending money to Australia.
Understanding the circumstances when taxation may apply is a crucial part of upholding the relevant laws and regulations applicable to your transfer.
We suggest speaking to local authorities if you're unsure about taxes for your transfer.
Many specialized money transfer brokers offer support and advice on taxes in specific circumstances.
Use our form below to find the best money transfer broker for your transfer.
