Australian Resident Doing Work for US Company in Australia

Discussion in 'Accounting & Tax' started by Camoz, 25th Jan, 2020.

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  1. Camoz

    Camoz Member

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    Sorry I did not know where to put this. I am looking to get assistance on the best setup for a US Company to employ and pay an Australian resident who is doing work in Australia consulting.
     
  2. Ross Forrester

    Ross Forrester Perth business advisor and founder

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    You should make sure your US tax advisor is comfortable with the Australian advisor. So the vest starting points is to ask your current US accountant.

    The fights between advisors in different countries can be huge. So getting the one position from the same team is critical.
     
    Mike A likes this.
  3. Camoz

    Camoz Member

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  4. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The US employer needs legal and tax advice in both countries. The employment of a person in Australia may create a complex tax problem where the Australian office is deemed a permanent establishment. Locally derived income may be subject to AU tax and GST.
     
  5. Camoz

    Camoz Member

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    Thanks Paul,
    In regards to the US company it will not be making money in Australia, all it will involve is hiring a few staff that are doing consulting work on the ground.
     
  6. Ross Forrester

    Ross Forrester Perth business advisor and founder

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    If the us company has staff working in Australia it is more likely than not to have a permanent establishment in Australia. This will likely be a foreign branch company operating in Australia. Getting an ARBN takes a while as the us directors will need to show proof of identity at an embassy.

    also take care with the Australian audit obligation.

    Get the single opinion from one advisory firm covering both jurisdictions otherwise the advisors dive for cover when bad things happen. So use a network.

    If the us company applies a tax equalisation regime you can look at a payg w exemption so that the us company pays the employees tax after the return is lodged. This is often needed when staff are paid is US dollars.

    If you hire consultants with abn/gst only you might not have a permanent establishment. This is preferred as oz franking credits are not generally recognised
     
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  7. Camoz

    Camoz Member

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    Thank you for the reply, any recommendations on a firm? I have been researching a lot.
     
  8. Ross Forrester

    Ross Forrester Perth business advisor and founder

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    Where in the us is the employer?
     
  9. Ross Forrester

    Ross Forrester Perth business advisor and founder

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    And where is the main aus operations?
     
  10. Camoz

    Camoz Member

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    The US employer is based in South Dakota. The operations in Australia are only 1-3 employees who are being paid to do research for a potential upcoming project.
     

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