International Family Business Blog

Australian Tax Office tax residency determination tools released

The Australian Taxation Office recently published interactive “residency tools” to assist in determining whether a person arriving in or leaving from Australia, will be “resident” for tax purposes. The “tools” can be found at-

https://www.ato.gov.au/Tax-professionals/News-and-updates/Income-tax/Are-your-clients-residents-for-tax-purposes-/?tpissue-32-2014

Random “testing” of the “residency tools” indicates that the Tax Office is likely to regard non-citizens coming to Australia to take up contracts of 2 or more years to be resident for tax purposes. This can have serious outcomes for senior executives coming to Australia.

Being regarded as an Australian resident for tax purposes means that being exposed to Australian tax on your world-wide income AND having all of your non-Australian assets drawn into the Australian capital gains tax net. Double tax agreements might absorb some of the pain, but Australian marginal tax rates on executive income over AUD180,000 are an effective 49%. Accordingly, the Australian Tax Office is likely to reap a significant “arbitrage” benefit!

Those intending to come to Australia either as a “visiting” senior executive or to take advantage of Australian Residency Visa Schemes should take independent specialist advice concerning their likely taxation exposures before moving to Australia.

Australian Tax Office adopts “voiceprint” technology

The ATO has adopted voiceprint technology as an option for identification of callers. Members of the community who use a telephone to interact with the ATO can elect to have a short "voiceprint" recorded. This will be used to verify the person's identity for subsequent calls.

Second Commissioner Geoff Leeper disclosed that “In the last fortnight, over 30,000 Australians have already chosen to use our voice verification technology." The ATO believes that the "voiceprint" identification will allow it to provide a more efficient and secure service. This is in the context of a call rate of some 8 million per year.

The ATO's "voiceprint" technology creates a digital representation of the sound, rhythm, physical characteristics and patterns of speech.

It is expected that the technology will not only limit the scope for identity theft, but will just as importantly, "speed up the authentication process and cut the time" that people who call regularly need to spend on the phone. This will be welcomed by Tax Agents (preparers) who often complain about the delays involved in the "interrogation" process previously used for identification.

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