There’s so much media hype about Australians taking money or business overseas.
This can make it especially scary to think about structuring your business offshore, or moving your business outside Australia.
“Is it legal? Is it not legal? Will I go to jail?”
These are all questions we ask.
That is why it is so important to get the right advice.
Indeed, finding the right consultant to help you with offshore tax planning is a real challenge.
Clients ask me all the time how to find someone to give me good solid offshore tax planning advice.
There are not many experts outside the big firms who provide international tax services to Australians. And those who do charge you a small fortune.
As taxes continue to increase and small business compliance burdens get worse, more and more small businesses are looking to move offshore.
Take these facts for instance …
When you consider medicare levy, GST, fringe benefits tax, luxury tax, fuel tax, excise duties, and all the other taxes, it isn’t hard to pay more than 50% tax …
The big question is … are you willing to live outside Australia?
If you live in Australia, your options for offshore tax planning are far more limited. Under Australian tax laws, residents are taxed on all income, whether earned in Australia or overseas. Whereas non-residents (who live outside Australia) are only taxable on income sourced in Australia.
So although there are some opportunities to do offshore structuring for Australian residents, such as running an international business, these are very limited.
The fact is, the government are really targeting offshore tax planning. You just need to look at the media and all the hype going on. It ultimately comes down to the fact the government is running out of money, and don’t want to lose their power. Understandable, but remember … someone who is scared is a deadly enemy.
That’s why it’s CRITICAL to only use international tax consultants who keep you within the law while getting you the maximum amount of tax and privacy benefits for the profits in your international business.
To give you an example of poor international tax advice I have often heard it said …
This is a myth many Australian have. Unfortunately this is not only incorrect, but can get you into a lot of trouble.
If you use many international tax services providers they’ll say something like …
“ … just set up an overseas structure, use a nominee director, and you won’t have to declare the income”
or
“ … unless you bring it into Australia, it won’t be taxable”.
From there, if you go ahead and set up an overseas structure based on their advice, you are breaking the law.
By choosing to live in Australia, you’ve chosen to accept limitations in what you can do about your tax and structuring. You have to take responsibility for your choices.
Until 1991, income in offshore structures was exempt from Australian tax. Since that time, the controlled foreign company (CFC) and transferor trust rules have put a stop to that. The Tax Office introduced these laws to protect their revenue, and make Australians pay tax on their overseas income.
This is all being driven by the OECD, who are bullying and pressuring the smaller countries in the world.
Yes it does.
The first thing is to ensure you’re a non-resident.
As well as case law on the topic, the ATO have released Income Tax Ruling IT 2650 on the issue of residency. What it says is if you go overseas thinking you’re a non-resident, and it turns out you’re not a non-resident in the eyes of the ATO, you’ll get a rude shock down the track. You won’t only have to pay a huge amount of tax, but you’ll end up with heavy penalties.
This is where it’s critical having quality international tax advice and an international tax consultant who really understands Australian and international tax.
What we recommend is you have a written opinion confirming you’re a non-resident … ideally from an Australian international tax specialist. This will be your salvation if the ATO audits you and hits you with back taxes. It removes the risk of penalties.
If you really want to be safe, you can always get an ATO Private Ruling.
The second thing is, once your residency is sorted out, you want the best possible advice on offshore jurisdictions and the most appropriate way to structure. There are many choices, and you want to ensure you make a goodone.
There are many options … if you want to read more about good jurisdictions, or ways to structure yourself,
If you’re willing to move offshore and be a non-resident, need good offshore tax planning, and can generate income from multiple sources, our international tax consultants can set you up to pay little or no tax 100% legally.
If not, we can’t promise that … but we can show you how to structure offshore to protect your wealth and have privacy.
If you have an international business, it’s possible through tax treaties to lower or defer your tax liabilities, similar to what Apple, Google and multinationals have done.
Before doing this however, you need to have the right international tax consultant to give you the best international tax planning advice as an Australian resident.
How Do I Get in Contact With You?
Call us on 1300 669 336 or click here to organise a free no-obligation chat with an international tax specialist about your offshore tax planning.
We won’t charge you unless we’re confident we can assist.
Written by Warren Black head of the Wealth Safe , offshore tax planning specialist.
Warren Black is the head of the Wealth Safe international tax planning solutions division. With over 26 years experience in tax planning, including 10 years at the Australian Tax Office, and being the ONLY recommended specialist in Australia on Lance Spicer’s list of highly recommended international tax planning experts (Lance Spicer is a top authority on offshore structuring and planning, and going under the radar), Warren knows the tricks of the trade to ensure you only pay the tax you legally have to, and use offshore structures in an effective way to get results and not have any trouble.
Using international tax planning makes a significant difference to build your wealth faster and be financially independent. All my high net worth clients know this. It’s why they spend hundreds of thousands, even millions of dollars, on top tax planners!
Let’s take a look at the impact of tax rates on your wealth by an example …
Let’s say you invest $100,000 at 20%. Depending on the rate of tax, this is your net balance after 20 years.
48.5% tax $ 841,920.58
30% tax $1,618,027.01
15% tax $2,925,766.91
0% tax $5,282,753.06
If the balance is $1 million, you can see the exponential difference. Imagine investing $1 million at 20% growth for 20 years with no tax! Over $52 million.
It isn’t hard to see why you need offshore tax planning.
I see it as almost impossible to become financially independent living in Australia paying taxes like the masses. You have to know how to minimise your tax and work with the best experts to get out of the rat race. The rich all know this.
Every day you waste is a further erosion in your net worth.
Contact us today and start your journey to financial independence!
Copyright © 2024. Wealth Safe Ltd. All Rights Reserved. ABN 34 435 319 557
