Hello
I recently became an Australian citizen and have a full time employment in I.T software. If I do some freelancing work for overseas companies do I have to pay tax on the money I get paid

Hi Vlad,

Yes, you will be required to pay tax on the freelancing work that you do for overseas companies. Note that as an Australian Citizen, your world wide income is going to be taxed in Australia.

Though against your freelancing work, you could be eligible for some deductions against that work.

Hope this helps.

Kind regards,
Anuraag

Dear Vlad

Any money earnt while you are a tax resident here needs to be declared in your foreign income section if earnt overseas. You can talk to your accountant, and check if the payment is being made after tax being deducted at source overseas. and if they have any dual treaty with Australia.

This is quite a common thing nowadays., no need for concern.

Regards

Madhu

Hi guys, there is a difference between Australian RESIDENT and Australian CITIZEN for tax purposes........

and for TAX purposes, it is residency that determines how you are taxed. If you are NOT an Australian resident then you will be taxed on your Australian sourced income only.

now the million dollar question for you is "what is the source of my income from IT services provided to an overseas company"??

If your freelancing work involves you staying up late and dialling into your clients server from your lounge-room, then there is a pretty strong argument that the income is generated in Australia, and will be assessable as Australian income.

If your freelancing work involves you jumping on a plane and shooting off to Germany and you earn your money there, then its probably not Australian income........but then if you are an Australian resident you are going to pay tax on it regardless....

then you will probably have to look at claiming tax credits for tax paid on that income in the foreign country.....and double tax agreements and whatnot.......

so the BEST thing you can do is talk to your accountant BEFORE you start, and get advice on what your tax obligations are......it gets complicated pretty quickly and you can very easily shoot yourself in the foot if you are not careful:)

good luck