Implications - working in USA as Australian employee

A job opportunity came up recently where I could potentially work for an extended period in the USA, either as an Australian employee (or US employee if the visa requirements dictate that as necessary).

When the time is right I will seek appropriate tax advice, but is my rough understanding below accurate?

• If I remain as a AUS employee...
  • I can maintain the 6 year CGT exemption rule on my sole IP (was previously my PPOR)
  • Domestic (Aus) shares and investments (crypto/super) are subject to Aus tax law only
  • Income - this one I am not so sure about - would it be subject to Aus tax law only? Would the US want a cut?
• If I become a US employee (e.g. non Aus tax resident)
  
  • I immediately lose the 6 years CGT exemption rule on my IP?
    
  • Domestic (Aus) shares and investments (crypto/super) - really fuzzy about this one - would these be subject to much harsher taxation (on both income and CGT events)?
    
  • Income - not sure here - would Australia want their cut of tax on my US income if I become a non AU tax resident?

It's such a complex matter to get my head around - I'm not event sure I know what questions I need to be asking! If anyone has any suggested reading on tax treatment between USA an AUS then I would be very grateful.

 

I’m def not expert but do know that there is a tax agreement between the two countries so don’t get taxed twice - eg if you do your Australian tax return (and have an Australian tax liability) you’d get tax credits for tax paid in the USA to offset this liability.

 

Its not based on whether you are an Australian employee or not, but on whether you are are tax resident or not.

 

Can you be an Australian employee but not an Australian tax resident at the same time?

 

Make sure you speak to a US tax accountant and Australian accountant who understands US tax laws. Its incredibly complicated

If you plan to invest while in US, structure is important and we do have a tax treaty, but if you get the structure wrong you could be up for double tax

 

It will depend on what your definition of 'australian employee' is.

 

Are australian employee or non australian employee terms used In the tax law?

 

Tax law doesnt define where you are a employee.

 

Hi @MTR and @Terry_w,

On a tangential but related topic: If I were to hypothetically open a US account (eg. with Airwallex), move funds there from Australia, and then trade US stock from that US account, would gains be liable for tax in Australia, US, or both?

I am interested in opening an Airwallex account plus an E*Trade account, and do some US options trading. I would continue to live and work in Australia.

Not looking for specific advice of course, just a general sense of the landscape. I know I will have to start looking for an accountant with US tax knowledge

Thanks for your insights

 

You don't say where you are a tax resident of but it could be both

 

I would be seeking an Australian tax adviser first. Merely moving or flying to the USA doesnt make someone a tax resident (alien) of the USA. The basis of your permission to enter the USA will be a factor as will the term of the arrangement.

 

Thanks @Paul@PAS, I am an Australian resident, not moving to the US

 

100% of worldwide income is subject to Australian tax. The location of where you produce income is not relevant other than for how your record and calculate what is assessable.

 

where you produce income can be extremely important if you are an Australian tax resident where the source of that income is in an overseas country. It might be subject to Australian tax, tax in the foreign country and subject to relevant DTAs

 

Yes - But the DTA doesnt change Australias assertion to tax residents on their worldwide income. It may affect for example how much of a foreign credit is allowed. My comment was specific with regard to "I am interested in opening an Airwallex account plus an E*Trade account, and do some US options trading. I would continue to live and work in Australia"

 

I was in this situation a few years ago.

The tax situation is complicated and frustrating. Remember, every state in the USA levies its own taxes... in addition to federal tax. This is a complete headf*** if you're working across multiple states.

Opening an account with a US bank was (relatively) straightforward, but CLOSING the account once I returned to Australia was literally impossible. I ended up emptying the balance and waiting 3 years with $0 balance and no transactions until it was closed automatically.