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Moving from HK to Australia but work remotely for HK office

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  1. #11

    Hi there, thanks for the reply, this is sounding like a real possibility now.

    According to http://taxsummaries.pwc.com/ID/Hong-...ersonal-income


    The Hong Kong Inland Revenue Department (HKIRD) will generally accept that employment is a non-Hong Kong employment if all of the following three conditions are met:


    The contract of employment was negotiated and entered into, and is enforceable outside Hong Kong. (Does this mean I have to end my existing contract and enter into a new contract stating that I will be working remotely in Australia?)
    The employer is a resident outside Hong Kong. (I have a Hong Kong passport and ID, I assume this means living outside HK?)
    The employer’s remuneration is paid outside Hong Kong. (They pay into an Aus bank account.)



    Quote Originally Posted by er2:
    HK income tax is based on your tax return - the employer information used for verifying the latter (or estimate it if you fail to file one). And you can state in your return that you weren't resident in Hong Kong. Pretty standard procedure.

  2. #12

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    The FAQs you describe target a classification of the employment - you might want to look for some information on people who are resident outside of Hong Kong and therefore nor subject to taxation in general, if they can show that they pay taxes elsewhere. I'm afraid I don't know the details, but I do know of people who had such arrangements.


  3. #13

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    Quote Originally Posted by Vodkaluver:
    Hi James, thanks for the quick reply.
    Do you know if this true even if I am working for the HK branch office but just working remotely? i.e. if the Hong Kong office can pay my salary into an Australia bank account, then can I avoid paying HK tax?

    I'm not sure if 'working in HK' equals being paid by a HK company.
    You don't pay Hk tax under this scenario. We have an employee in NZ who did exactly this.

  4. #14

    Thanks for this! Do you know if they are paid MPF or any type of pension benefits?
    And did they have to sign a new contract?

    Thanks again!

    Quote Originally Posted by HK_Katherine:
    You don't pay Hk tax under this scenario. We have an employee in NZ who did exactly this.

  5. #15

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    Quote Originally Posted by Vodkaluver:
    Thanks for this! Do you know if they are paid MPF or any type of pension benefits?
    And did they have to sign a new contract?

    Thanks again!
    They are paid the employer contribution to MPF which they then use for their own pension. No separate contract.
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  6. #16

    I have been doing exactly this for the last 3 years.

    You will have to pay Australian tax.

    You won't have to pay HK tax on any income on which you are already paying Australian tax, which I assume is all of it. However, this is a PITA if you have to prove it, as the Australian and Hong Kong tax departments don't talk so you have to convince them. Also, the IRD will want you to pay the tax until you've proven you're exempt. I paid them and then got a full refund 15 months later.

    An easier option - you don't have to pay HK tax if you spend less than 60 days a year physically in Hong Kong. They will check your immigration records and they won't even send you a tax return if you haven't been in HK enough. Your employer will file the normal records showing they paid you but the IRD knows you're exempt.

    There's no point in your employer paying straight into an Australian bank account, my employer pays me into a HK bank account and it makes no difference. Better they pay you into a HK account, then you can shop around for the best exchange rate when you transfer the money into AUD.

    Keeping records so you can work out how much to declare on your Australian tax return takes some doing. The ATO has official exchange rates on its website.

    Your employer just needs to comply with HK laws. They don't pay you Australian super, they keep paying into a HK MPF.

    Last edited by LionelHutz; 26-07-2017 at 01:53 PM.
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  7. #17

    Hi there,
    This is incredibly helpful! Thank you so much!
    I have postponed my plans a bit.
    I'm trying to ease into the situation of working in Australia on and off over the next few months.
    If I spend less than 6 months in Australia from Jul 17 - Jun 18, do you know if I still have to pay Australian tax if I technically will not have "moved" yet?
    I am having some trouble understanding what means I have "moved" to Australia vs. "visiting" Australia.

    Really good to know someone is doing the same thing!

    Thank you for your help!



    Quote Originally Posted by LionelHutz:
    I have been doing exactly this for the last 3 years.

    You will have to pay Australian tax.

    You won't have to pay HK tax on any income on which you are already paying Australian tax, which I assume is all of it. However, this is a PITA if you have to prove it, as the Australian and Hong Kong tax departments don't talk so you have to convince them. Also, the IRD will want you to pay the tax until you've proven you're exempt. I paid them and then got a full refund 15 months later.

    An easier option - you don't have to pay HK tax if you spend less than 60 days a year physically in Hong Kong. They will check your immigration records and they won't even send you a tax return if you haven't been in HK enough. Your employer will file the normal records showing they paid you but the IRD knows you're exempt.

    There's no point in your employer paying straight into an Australian bank account, my employer pays me into a HK bank account and it makes no difference. Better they pay you into a HK account, then you can shop around for the best exchange rate when you transfer the money into AUD.

    Keeping records so you can work out how much to declare on your Australian tax return takes some doing. The ATO has official exchange rates on its website.

    Your employer just needs to comply with HK laws. They don't pay you Australian super, they keep paying into a HK MPF.

  8. #18
    Quote Originally Posted by Vodkaluver:
    If I spend less than 6 months in Australia from Jul 17 - Jun 18, do you know if I still have to pay Australian tax if I technically will not have "moved" yet? I am having some trouble understanding what means I have "moved" to Australia vs. "visiting" Australia.
    It's a complicated question! You need to spend a bit of time reading the guidance on the ATO website. Start here: https://www.ato.gov.au/individuals/i...tax-residency/

    You aren't a resident until you move permanently to Australia - i.e. you arrive in Australia with the intent to live here permanently. There's a range of factors that contribute to that - how much time you spend in Australia, where's your main residence, where's your family, how permanent is your accommodation, what you say on your immigration card etc. So if you are here for a week or two at a time and you're staying in your friends spare room or in a serviced apartment, you're probably not a resident. But if you buy a house and your kids start attending school and you are living in hotels when you are back in HK, it starts to look like you might be permanent. There is a 183 day rule which says if you spend more than half the year in Australia, you are a resident. But you can still be a resident if you spend less than half the year here, if you treat Australia as your permanent base.

    If you start to base yourself in Australia during a tax year, then you're an Australian resident from that date. You pay tax as a non-resident for the part of the year you were a non-resident and as a resident for the part of the year you were a resident.

    The main consequence is that while you are a non-resident, you only pay tax on income you generate in Australia. Once you are a resident, you pay tax on income you generate anywhere. Also as a resident, you get to take advantage of tax free thresholds and other benefits.

    As an illustration, I had a six month period before I left Hong Kong where my family went back to Australia. I stayed in Hong Kong in my regular apartment and did my regular work there. I visited my family in Australia every couple of months for a week at a time, but I was staying with my in-laws in their spare room, so there was no permanence to it at all. So during that time I was a non-resident. At the end of the six months, I returned to Australia and started working remotely from Australia. I still visited HK after that but from then on, I was staying in hotels in Hong Kong and started looking to buy a house in Australia. So from the date my flight arrived I was a resident. I formed my own view and made sure that I filled out immigration cards and my tax returns consistently with that view. It was never challenged.
    Last edited by LionelHutz; 26-07-2017 at 02:51 PM.
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  9. #19

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    Someone deliberately wanting to pay Australian tax instead of HK tax? Bizarre.

    Just form a HK company and use that to do consulting work for your current employer. Keep the money in the HK company and don't distribute to yourself and then you don't need to pay Aus tax. Even better, don't spend more than 183 days a year in Australia and avoid being considered an Aussie resident.


  10. #20
    Quote Originally Posted by Paxbritannia:
    Just form a HK company and use that to do consulting work for your current employer. Keep the money in the HK company and don't distribute to yourself and then you don't need to pay Aus tax.
    I'm not a tax lawyer but I doubt this would work. How do you get the money out of the HK company to you in Australia without triggering Australian tax laws?

    Quote Originally Posted by Paxbritannia:
    Even better, don't spend more than 183 days a year in Australia and avoid being considered an Aussie resident.
    Good solution: just don't live in Australia! Wish I'd thought of that. Some people might consider that there are other benefits to living in Australia that outweigh paying more tax.

    If you do decide to do this, it's not just a matter of spending less than 183 days. There was a case last year where a guy spending around 100 days a year in Australia was considered a resident. He was filling out his arrival and departure cards as if he were a resident and he had his main residence here.