From July 01, 2017, the Australian Taxation Office (ATO) will receive information on holders of a visa from the Department of Immigration and Border Protection, and the data items that will be obtained are:
- address history for visa applicants and sponsors
- contact history for visa applicants and sponsors
- all visa grants
- visa grant status by point in time
- migration agents (visa application preparer who assisted or facilitated the processing of the visa)
- address history for migration agents
- contact history for migration agents
- all international travel movements undertaken by visa holders (arrivals and departures)
- sponsor details
- education providers (educational institution where a student visa holder intends to undertake their study), and
- visa subclass name.
Of particular importance will be the arrival and departure dates for individuals who are not Australian citizens. This can be matched against income tax returns in order to determine the correct tax treatment between residency and non-residency. Also, capital gains tax transactions may be affected, including taxation of CGT assets on ceasing residency.
Directors of private companies
Individuals with these types of visa situations may be directors of private companies. While there is no restriction when a director is a foreign resident, all proprietary companies in Australia must have at least one company director who ordinarily resides in Australia. Therefore, sole director companies need to be aware of the residency requirements of being a director.
A company will also need to be aware of the dates in which a director was a foreign resident as withholding tax may be applicable to the fees.
Risk mitigation steps
The onus is on the taxpayer to make sure they are operating within income tax, superannuation and company law. It is best practice to ensure that you inform your tax agent of your movements throughout the income year. That way your tax agent can advise you properly on the best course of action for your individual circumstances to avoid any potential liabilities or non-compliance down the track.
In particular, individuals who are travelling between countries may want to ensure the CGT assets are not captured by CGT event I1. Making an appropriate election in the tax return is essential to ensure the ATO does not look to issue an amended assessment.
