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I am a New Zealander working in Australia and wondering if I can claim back my tax

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Q. Hi Josie, I was sitting on the tractor working away the other night and I was listening to you on the radio. I am from NZ, currently working here for a while.

I was wondering how I go about claiming tax back? I have also worked here in the past (a couple of years ago) and am wondering if I can claim anything from that work?

Please help as it is hard to find information on this. Your time is very much appreciated.

A. Thanks for the question and what an interesting job?   Questions on taxation of non-residents should really be directed to an accountant as they just love interpreting the Tax Act.   Nevertheless, I have done a little bit of research on the internet and sourced the following information from the Australian Taxation Office website :Non-residents - lodging an Australian income tax return and it states:-

If I am a working holidaymaker, do I have to lodge a return?

Most working holidaymakers visiting Australia for only a short time are tourists or travellers and are not Australian residents for tax purposes. If you have been paid a salary or wages in Australia, you are required to lodge an income tax return.

The Australian tax year ends on 30 June. You should lodge your tax return by 31 October, unless you have been granted an extension to lodge until a later date. You will have to pay more tax if you didn’t pay enough while you were working. If too much tax was withheld from your pay, you will get a refund.

It can take up to six weeks to process your tax return, so make sure you write an address on your tax return where we can send your notice of assessment.

If you are leaving Australia before the end of our tax year, refer to Leaving Australia - lodging your return to find out whether you can lodge your tax return before you leave.

What is the effect of being a non-resident?

Non-residents pay tax differently from residents. As a non-resident you will:

• pay tax on all salary and wage income earned in Australia. The non-resident tax rates are different from resident tax rates. See Individual income tax rates for details of non-resident tax rates
• have 10% of any interest earned from your Australian bank accounts withheld for tax. This interest is not included as assessable income. You need to advise the Australian financial institution of your overseas address so that this tax can be withheld otherwise tax will be withheld at the higher rate of 46.5%
• not pay the Medicare levy. You also may not be entitled to claim Medicare benefits
• not be entitled to the tax-free threshold
• have tax withheld from unfranked dividends. These dividends are not included as assessable income. You need to advise the Australian company of your overseas address so that this tax can be withheld otherwise tax will be withheld at the higher rate of 46.5%. Where you receive franked dividends, no tax is withheld as the company has already paid tax on your behalf. These dividends and franking credits are also not included in assessable income
• not be entitled to claim certain tax offsets or tax credits which are available to residents, and
• be required to show any Australian rental income in your tax return.

What tax rates apply?

The tax rates that apply to both resident and non-residents are detailed in Individual income tax rates.

Non-residents

If you are a non-resident for the full year, the following rates apply:

Tax rates 2007-08

Taxable income	Tax on this income
$0 - $30,000	29c for each $1
$30,001 - $75,000	$8,700 plus 30c for each $1 over $30,000
$75,001 - $150,000	$22,200 plus 40c for each $1 over $75,000
$150,001 and over	$52,200 plus 45c for each $1 over $150,000

Non-residents are not required to pay the Medicare levy.

With regards to your question on claiming tax back, you will receive a refund if your employers withheld more than what you are required pay and obviously you will need to lodge a tax return in Australia to find out if this is the case.

As I mentioned earlier, you will need to contact an accountant or tax agent to organise this.   If you are fee conscious, there are plenty around that cost less than $100, assuming your financial life is simple.

If you don’t want to pay anyone, you can do it yourself.  If you are still confused, I recommend you contact the Australian Taxation Office on 13 28 61.   Hope you are having a wonderful time in Australia.

Happy money organisation.  Josie Kay

Don’t forget that the above information is general in nature and not specific to your goals and objectives. It is recommended that you seek personal financial advice specific to your needs.

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