Non-residents for tax purposes (e.g. people living and working overseas) with study and training support loans have a number of obligations to the ATO from the 2017 financial year onward:
To update your contact details and submit an ‘Overseas travel notification’ within seven days of leaving Australia. This is if you have an intention to (or already) reside overseas for 183 days or more in any 12 months.
To lodge your worldwide income in a ‘Non-resident foreign income schedule’, or lodge a ‘Non-lodgement advice’.
This applies to people with the following types of loans:
Higher Education Loan Program (HELP) – formerly known as HECS
VET Student Loan (VSL)
Trade Support Loan (TSL)
Non-resident foreign income schedule
If your worldwide income for the 2018–19 year is below AUD$12,990 you need to lodge a non-lodgement advice form. If above that threshold, you need to report your worldwide income in a non-resident foreign income schedule.
When you declare your worldwide income to the ATO, you can choose one of the following three income assessment methods to calculate your non-resident foreign sourced income:
1. Simple self-assessment method
This method requires you to provide your gross amount of non-resident foreign income for the income year and state the occupation from which you derived most of your foreign-sourced income. A standard deduction will automatically be applied to reduce your foreign income based on your occupation.
2. Overseas assessed method
This method allows you to enter the foreign income amount you were assessed for on your most recent income assessment from your foreign country of residence. The assessment must cover a 12-month period, even if you did not earn income for the whole 12 months.
3. Comprehensive tax-based assessment method
This method will require you to declare your gross foreign income and enter allowable deductions, similar to how you would complete an Australian income tax return.
You can only choose one method to assess your foreign income for the income year. However, you may choose another assessment method in a later year.
You must convert all foreign income, deductions and foreign tax paid into Australian dollars before you include this in your tax return. The rate of conversion will be the average exchange rate for the Australian income year.
After you have reported your worldwide income, you will receive a ‘Notice of Overseas Levy’ confirming:
how much you owe based on the applicable study and training loan repayment thresholds and rates
the due date for payment.
Overseas Travel Notification
To complete your overseas travel notification, you’ll need:
Your Australian or foreign passport
Your travel information including:
the country you are planning to reside in while overseas
your expected or actual departure date from Australia
your expected or actual date of return to Australia.
You must continue to update your contact details as long as you reside overseas.
You will only need to lodge a subsequent overseas travel notification if you come back to Australia, or your residency changes and you meet the requirements to notify again.
You do not need to complete another notification if you are only returning to Australia for a short period (for example, a holiday).
If you need any assistance meeting these obligations, please contact our office to discuss your situation further.