ATO urges taxpayers to report foreign income this tax time

The ATO has warned taxpayers that it holds data on more than $100 billion held in offshore accounts and uses sophisticated analyses to identify the taxpayers with unreported foreign income.

It is urging taxpayers to report any foreign income whether from investments, family members or overseas employment, no matter how small, and even if tax has been paid overseas. The data shows many Australians with financial dealings in China, the United Kingdom, Switzerland, Singapore and the United States. The ATO encourages taxpayers who have not declared their foreign income to make a voluntary disclosure as soon as possible.

If you are a tax resident of Australia, you need to include all your income from global sources and lodge your tax return in Australia. The tax you paid overseas can be claimed as tax credits to reduce your tax payable.

Please note the rules for tax residency is different from Department of Home Affairs (formerly known as the Department of Immigration and Border Protection). You can be an Australian tax resident without being an Australian citizen or permanent resident, such us overseas students or 188/457 visa holders who are living, working or studying in Australia.