Absolutely wrong!!!!I went to the tax office and asked and was told I didn't need to declare income from Australia.
Finnish tax law clearly states that you must declare all foreign income. The tax agreement between Australia and Finland and the differing tax systems will result in the following:
1. Foreign employment income (during the time you are resident in Finland): Added to your income in Finland, tax at the Finnish rates, credit is given for tax paid in Australia. As you are resident in Finland, Australia will tax you at the non-resident rates starting at 30c in the dollar (tax threshold does NOT apply to non-residents).
2. Interest income from Australian Banks: Taxed at source in Australia at 10% for non-residents. Interest income is taxed at 28% in Finland. Credit is given for the 10% paid to Australia, so you pay 18% to Finland.
3. Rental Income: Taxed as normal income in Australia, so as a non-resident you will pay non-resident rates starting at 30c in the dollar. Taxed in Finland at 28%, so no further tax is paid to Finland. Special note: Land tax is a state tax and is not subject to the taxation agreement between Australia and Finland.
4. Dividend income: Australia is rather unique in having a system of franked & partially franked dividends. Finnish law does not recognize franking of dividends but does tax dividend income at lower rates than the standard 28%.
The Finnish tax office can and does communicate closely with the ATO. In some circumstances you may be able to delay filing your Finnish tax return (normally due in mid May) for a few weeks until the Australian tax year closes on 30th June so that you know exactly how much income & therefore tax you will be paying in Australia.
Hope this helps!
