Legislation has changed, this option is no longer available. It is much more strict now. I think from memory you now have evidence of living in (and working) that country for a minimum of 2 years, eg. evidence is rental agreement etc. Read the ATO for more info. on the new legislation, offshore oil & gas workers earning a hefty income are the ones being targeted hear.
Beating the Taxman - strategies for traders to minimise tax
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Legislation has changed, this option is no longer available. It is much more strict now. I think from memory you now have evidence of living in (and working) that country for a minimum of 2 years, eg. evidence is rental agreement etc. Read the ATO for more info. on the new legislation, offshore oil & gas workers earning a hefty income are the ones being targeted hear.
Just a quick question about this one - it says there that profits need to be withheld to keep the tax rate at 30%. So if I wanted to actually take profits from the "company", would I then just end up getting taxed at my marginal rate? In other words, the company is the "employer" and if it is paying me, the "employee", there is payroll tax implications and marginal tax rate issues?
OR are there "franking credits" here for any profit distribution? E.g. company gets taxed at 30%, my marginal rate is at 8%, so after profit taking, I still am taxed at 8%?
Sorry couldn't find anything on that (read the ATO website also), thanks
Krusty the Klown
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As a shareholder of the company there is no payroll tax implications as profits from a company are distributed as dividends and not wages or salary.
When tax is paid by the company on profit before dividend, then you get a franking credit, which reduces your tax payable after your marginal tax is calculated because you have already paid it on the dividend if your marginal rate is under 30%.
It is never a cut and dried issue, but different for every individual depending on the individual circumstances.
When tax is paid by the company on profit before dividend, then you get a franking credit, which reduces your tax payable after your marginal tax is calculated because you have already paid it on the dividend if your marginal rate is under 30%.
It is never a cut and dried issue, but different for every individual depending on the individual circumstances.
In other words, trading through a company has very little benefit in terms of reducing tax payable if you actually intend on taking profits (at least in the short term)??
And it is definitely the case that you are a "shareholder" not an "employee" if you trade through a company??
Krusty the Klown
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If you are the only person involved that's correct.
You can be an employee if you want and pay yourself a salary or director's fees, but then you are just complicating things with extra admin and forms for the ATO etc..
If you are trading on your own it is easier and cheaper to trade as an individual.
The benefit of using a company structure is that you can retain profit inside the company and get a greater compound return by paying less tax each year if you are on a higher marginal rate.
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Whilst never keen to pay more tax than is necessary I firmly believe that if you're paying tax you know you must be making a profit.
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Isn't The Republic of Venuatu a grey listed economy by the OECD? They do generate revenue through Value Added Tax, stamp duty and numerous indirect taxes. Australia has circumvented the secrecy laws of Venuatu, note project Wickerby.
Australian tax authorities have a right to treat a person who has left Australia, for up to 2 years, as still being a resident for tax purposes if they feel the person intends to return to Australia.
Depends.
If you trade through a discretionary trust, and you have used all the individuals upto 30%, then you may distribute some to a company. The company then holds the funds.
This structure proves successfuly for many SME
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If you invest you money in gold or silver bullion and sell it through 3rd party (ebay), would it be traceable?
Julia
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Dowdy, why are you so anxious to avoid paying tax?
How do you think our society would function if we all found ways to avoid it?
Have you ever considered that one day you may unexpectedly need to draw some government support, e.g. ill health, loss of job etc?
I don't mean to necessarily be judgemental, but am interested in members' views about tax.
Yes, I know much of our taxpayer dollars are horribly wasted by governments, but I'm thinking more of the need to provide support and essential services.
Sorry, if this seems to be off topic. Maybe it should be separate thread.
How do you think our society would function if we all found ways to avoid it?
Have you ever considered that one day you may unexpectedly need to draw some government support, e.g. ill health, loss of job etc?
I don't mean to necessarily be judgemental, but am interested in members' views about tax.
Yes, I know much of our taxpayer dollars are horribly wasted by governments, but I'm thinking more of the need to provide support and essential services.
Sorry, if this seems to be off topic. Maybe it should be separate thread.
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Not until the taxman decides you are living beyond your means and takes a sticky inside your place of abode. He will ask you where you got the money for the DB9, the Linn deck, those lovely crystal wine glasses, all that Dom in the beer fridge, and he won't be happy unless you can account for all of it. If you can't he will assign a value to all items you own and work backwards to generate a plausible income which he will tax you on with penalties.
Pay some tax and be happy you are making money.
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Oh I forgot to mention if you put the same amount of time and effort into making money as you do into avoiding tax on the lesser amount you actually make then chances are you will make much more money.
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Transactions above $10,000 are automatically logged apparently ....
Have to buy/sell smaller but more often.
Just something i heard down the pub as i am happy to pay any taxes i am LEGALLY obliged to
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So, how did Kerry Packer manage to only pay $100 tax most years? When he was questioned my a senate inquiry, he said something along the lines of, "Why should l pay tax to a government that is just going to waste my money"
http://www.abc.net.au/7.30/content/2005/s1538560.htm
http://www.smh.com.au/news/business/like-father-like-son--james-packer-weaves-that-old-tax-magic/2007/08/22/1187462357171.html
http://www.abc.net.au/7.30/content/2005/s1538560.htm
http://www.smh.com.au/news/business/like-father-like-son--james-packer-weaves-that-old-tax-magic/2007/08/22/1187462357171.html
Krusty the Klown
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Most probably through the use of companies and deductions.
Retain profits inside a company structure.
What profits he did take as income, the tax can be reduced through deductions.
One simple way is to just buy some negative geared property. Not immediately profitable but works if you want to really reduce tax payable out of principle.
Retain profits inside a company structure.
What profits he did take as income, the tax can be reduced through deductions.
One simple way is to just buy some negative geared property. Not immediately profitable but works if you want to really reduce tax payable out of principle.
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I pay tax, just curious that's all.
The private sector will take care of it. Sure the private sector sometimes runs a lousy job - only if it's a monopoly but if there is competition, it will always do a good job
The private sector will take care of it but we will be left with a health system like America. Cost you a arm and a leg to see a doctor.
What like the US and European banks......
Im a private sector advocate for a lot of things but, the private sector still needs to be regulated / observed, and no they dont always do a better job...
They definitely do a more economically efficient job in most cases, but that is not always better....
Its easy for business
Personal tax structure
Gross income - income tax = disposable income
Business Structure
Income - deductable expenses = taxable income
Just invest more in other assets and write them off as expenses = no tax payable.... Get your business to pay all your private expenses and you dont need any income... its that simple...
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I view a reduced taxation rate as an increase in ROI, or even direct savings!
Therefore the best tax strategy is to invest in a SMSF pension phase, if possible, and pay personal tax 0-5% depending on age, no CGT.
Otherwise earn over $110,000pa in FF dividends, pay no income tax!
add some negative gearing on IP or 2..voila, pay minimal or no tax
Avoid indirect GST by buying private 2nd hand goods.
Negotiate to pay cash for services wherever possible, no receipt needed
On another note, I am not keen on pokies and fags, but must admit to be slightly pleased when I see those fools, subsidising my tax..let them pay for my services i say
:survival of the fittest in the tax world
note: there is legislative risk with all tax reduction strategy, also any investment should stack up on fundamentals imo, with tax enhancements the alpha only.
