Taxation of international executives
A person’s liability to Australian tax is determined by their residence status for taxation purposes and the source of income derived by them.
The general rule is that a person who is a resident of Australia is assessable on worldwide income (except to the extent that it is exempt income). Non-residents and temporary residents are generally only assessable on income derived directly or indirectly from sources in Australia.
Net taxable income is taxed at graduated rates ranging from 19 percent to 45 percent. Different rates apply to non-residents. Generally, all non-cash fringe benefits provided to employees are subject to fringe benefits tax (FBT), a tax payable by the employer, with the value of such benefits being exempt from income tax in the hands of the employee.
Australian residents (although not all expatriates) are also subject to a health care levy (Medicare Levy).
The official currency of Australia is the Australian Dollar (AUD).
Herein, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.
All information contained in this publication is summarized by KPMG Australia Pty Limited, an Australian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on the Australian Income Tax Rates Act 1986, Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992, Medicare Levy Act 1986 and Income Tax Assessment Act 1936 Part VIIB, Australian Income Tax Assessment Act 1936 and Australian Income Tax Assessment Act 1997, the Australian Fringe Benefits Tax Assessment Act 1986, Australian Taxation Administration Act 1953, Part 2-5, Australian Income Tax Assessment Act 1997 Division 102 (section 102-5 is the operative provision which includes net capital gain in assessable income), Australian Taxation Office web site ATO assist at www.ato.gov.au or Tax Pack.
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