HECS Reporting Obligations for Non-Residents

Please be aware that if you relocate overseas with a HECS debt and you are a non-resident of Australia, you will still have a HECS reporting obligation to the ATO.

It is important to make the distinction between income tax reporting and HECS reporting. In case you’re not an Australian resident for tax matters, you won’t face taxation on your income earned abroad. Nevertheless, if you carry a HECS debt, you’ll still need to file an Australian tax return and disclose your foreign earnings to the ATO for HECS-related reasons.

From 1 July 2017, non-residents of Australia will be required to report their overseas income on a Non-Resident Foreign Income Schedule of the tax return. The ATO provides various methods for reporting overseas income. We can assist with the best method depending on your individual circumstances.

Following lodgement of a tax return, the ATO will issue a Notice of Overseas Levy which will specify if in fact you have a repayment obligation, and how much.  Please note that if you are not able to make your payment obligations, you may be eligible to setup a payment plan with the ATO to assist in managing your repayments and cash flow.

Overseas Travel Notification Form

Kindly note that apart from filing your income tax return, you will also need to complete an Overseas Travel Notification Form for the ATO. This form is necessary to notify the ATO of your overseas residence and the duration of your stay abroad.

Record Keeping

Please also note that when you report your overseas income, you will be required to retain adequate records of your foreign income- normally payslips or payment reporting summaries from your employer.

Penalties

Be aware that if you fail to lodge a non-lodgement advice or tax return, the ATO may impose penalties and interest. The ATO now has advanced data matching capabilities which means Australian expats need to comply with their HECS obligations when going overseas.

The annual penalty can be up to $3,600.

We would be happy to assist you manage your HECS obligations when you decide to relocate overseas.

Please do not hesitate to get in touch with us.

Have a great week everyone!