Declaring income from overseas

[Cloudberry]

I'm just wondering if whilst we are living in Finland I also need to declare any casual earnings from Australia? I imagined that I could just declare any earnings in Finland in Finland and any earnings from Australia in Australia? (lodge a tax return in both countries) Or would it be best to declare all earnings in Finland? I am an Australian and Finnish citizen. I have a business that I can continue to operate online who's registered main office will remain here in Australia for the few years that we are in Finland. I am guessing that the earnings would be under a few thousand dollars per year. Anyone have any thoughts or experience?

[Pursuivant]

the tax orifice wants it all as always... www.vero.fi has a guide

[TampereOwl]

I'm just wondering if whilst we are living in Finland I also need to declare any casual earnings from Australia? I imagined that I could just declare any earnings in Finland in Finland and any earnings from Australia in Australia? (lodge a tax return in both countries) Or would it be best to declare all earnings in Finland? I am an Australian and Finnish citizen. I have a business that I can continue to operate online who's registered main office will remain here in Australia for the few years that we are in Finland. I am guessing that the earnings would be under a few thousand dollars per year. Anyone have any thoughts or experience?

You shouldn't pay tax twice, but should declare it in Finland too (as well as the tax you paid or expect to pay in Australia). Then they charge you double what you ought to pay and give it back about a year later.

[rinso]

It depends if there is a tax treaty between Australia and Finland.
If there is no treaty, it is not impossible you have to pay tax twice.
And getting it back is a long process.

[Desundial]

There is a tax treaty between Australia and Finland, at least there was one in effect in 2006, unlikely to have changed. You should see if your national tax administration authority has a copy online. The tax treaties will say on what types of income/taxation something has been agreed, and what type of system of credits or relief has been agreed to reduce double taxation. The most important item of interest with the existence of a tax treaty is that the sharing of information between tax authorities is always included.

Even if you decide it's too much trouble for the level of income, you should know the legal context and your potential liability! All sorts of messy details come into play - how this venture is set up, if you are the owner, if the income is a "salary" or a dividend...etc. For that matter, have you checked for complications on the Australian side? Do they reserve a claim to tax your income earned here, at least for a certain period of time? Often countries reserve the right to claim something on your income for the first 6 months to 2 years of you living abroad.

also try looking at the vero site, although I never have much luck with what I want there myself.

[Oombongo]

I wouldn't declare any foreign earnings in Finland. They won't mind taking it. However, getting it back is a nasty headache.

[Cod]

You shouldn't pay tax twice

A bit of history..the a architect of Sydney Opera, Joern Utzon, house was double taxed .

Denmark and Oz took %95 of his fee between them ... thieves.

[Cloudberry]

You shouldn't pay tax twice

A bit of history..the a architect of Sydney Opera, Joern Utzon, house was double taxed .

Denmark and Oz took %95 of his fee between them ... thieves.

Wow I didn't know that - that's terrible. I guess I was afraid of being taxed twice which is why I wanted to check out the legalities of declaring the income separately in each country. Like I said, the earnings are miniscule but I do like to do things by the book. I think I may have to find an accountant who has experience with situations like these (wish me luck - it's hard enough finding a regular accountant that knows what he's doing!). The only other alternative is moving the business to Finland completely which means losing the business name here in Australia and my right to trade. It would be a major pain in the butt to have to go through all the red tape it takes to establish the business here again when we return, not to mention the loss of work in the meantime since I'd be no longer seen to be Australian based.

[Cloudberry]

Oh, and thanks Pursuivant and Desundial for the Vero link - I'll have a sift through there to see if any of it makes sense

[Pursuivant]

don't worry - it doesn't

BTW Tax argeement between Finland and Australia http://www.vm.fi/vm/en/04_publications_ ... a/name.jsp

[Cloudberry]

Duplicate post

[Cloudberry]

Duplicate post

[Cloudberry]

don't worry - it doesn't

yeah you're right - it didn't

BTW Tax argeement between Finland and Australia http://www.vm.fi/vm/en/04_publications_ ... a/name.jsp

Fantastic, thanks for that - a little easier to understand. I think it is saying that I can declare the income in Finland and be taxed equally as if it were earned in Australia? I don't know if that means that I can only claim deductions allowable/equal to those I would in Australia or not but I assume so. It's great that this Agreement exists though Now I won't end up like Joern Utzon


Relief from Double Taxation

1. Subject to the provisions of the law of Australia from time to time in force which relate
to the allowance of a credit against Australian tax of tax paid in a country outside Australia
(which shall not affect the general principle of this Article), Finnish tax paid under the law of
Finland and in accordance with this Agreement, whether directly or by deduction, in respect
of income derived by a person who is a resident of Australia from sources in Finland shall be
allowed as a credit against Australian tax payable in respect of that income.

2. Subject to the provisions of Finnish law regarding the elimination of international
double taxation (which shall not affect the general principle hereof), double taxation shall be
eliminated in Finland as follows:

a) where a resident of Finland derives income which, in accordance with the
provisions of this Agreement, may be taxed in Australia, Finland shall, subject to
the provisions of subparagraph b), allow as a deduction from the Finnish tax of
that person, an amount equal to the Australian tax paid under Australian law and
in accordance with the Agreement, as computed by reference to the same income
by reference to which the Finnish tax is computed;

b) dividends paid by a company being a resident of Australia to a company which is
a resident of Finland and which controls directly at least 10 per cent of the voting
power in the company paying the dividends shall be exempt from Finnish tax;

c) where in accordance with any provision of this Agreement any income derived by
a resident of Finland is exempt from tax in Finland, Finland may nevertheless, in
calculating the amount of tax on any other income of such resident, take into
account the exempted income.

Oh, and when I find an Accountant who can read, I will be able to pass this document onto them (apologies to any Accountants on here but I've had such a bad run with incompetent Accountants the past few years!)

[Jazqas]

I'm just wondering if whilst we are living in Finland I also need to declare any casual earnings from Australia? I imagined that I could just declare any earnings in Finland in Finland and any earnings from Australia in Australia? (lodge a tax return in both countries) Or would it be best to declare all earnings in Finland? I am an Australian and Finnish citizen. I have a business that I can continue to operate online who's registered main office will remain here in Australia for the few years that we are in Finland. I am guessing that the earnings would be under a few thousand dollars per year. Anyone have any thoughts or experience?

I went to the tax office and asked and was told I didn't need to declare income from Australia. My advice is to go in person with all your details and ask, they can be nice people there.

Jazqas.

[Cloudberry]

I went to the tax office and asked and was told I didn't need to declare income from Australia. My advice is to go in person with all your details and ask, they can be nice people there.

Jazqas.

Thanks for that Jazqas - it's always good to hear from people who have first hand experience. I think so long as I'm up front with them it will all work out okay