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  • Overseas obligations when repaying loans

    If you plan to live and work overseas and have a study or training support loan, you are required 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
    • lodge your worldwide income or a non-lodgment 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).

    You can report your worldwide income online by accessing ATO online services through myGov, or through an Australian registered tax agent.

    The deadline for you to report for the Australian income year (1 July to 30 June) is 31 October. It's important you lodge on time, even if you can't pay straight away, as you'll avoid a penalty for lodging late.

    You can use an Australian registered tax agent to lodge on your behalf. They can lodge after the usual 31 October deadline. The due date will depend on your personal circumstance. You should contact your tax agent for advice.

    After you have reported your worldwide income, you will receive a notice confirming:

    • how much you owe or will be refunded
    • the due date for payment.

    Your student or training loan will continue to be indexed each year until it is paid. You can make additional voluntary repayments from overseas at any time to reduce the balance. These will not reduce any compulsory repayment or overseas levy obligations you may have.

    Find out about:

    See also:

    Accessing ATO online services through myGov

    You can manage your tax and super obligations whilst overseas with a myGov account linked to the ATO.

    To access ATO online services you can sign-in to myGov using:

    • SMS codes, if you have access to your Australian mobile number
    • codes created by the myGov Access app if you don’t have access to your Australian mobile number – download the app and update your sign-in option before you travel
    • answers to secret questions, if you already have a myGov account linked to the ATO using this sign-in option.

    See also:

    Completing an overseas travel notification

    You need to notify us, within seven days of leaving Australia, if you intend to move or already reside overseas for 183 days or more in any 12-month period.

    To notify us, complete an overseas travel notification and update your contact details, including your mobile, international residential, postal and email addresses.

    You can submit your overseas travel notification through ATO online services via myGov or through an Australian registered tax agent. If you notify us online, you only need to update your details on ATO online services, not on your myGov account.

    Once you have logged in to ATO online services, follow these menu options to complete your overseas travel notification:

    • Tax>Manage>Overseas travel notifications

    To complete your overseas travel notification you 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, either through our online services or an Australian registered tax agent.

    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).

    Sign in to myGov

    Reporting your worldwide income

    Your worldwide income is your repayment income and your non-resident foreign sourced income. Your non-resident foreign sourced income is any income you earned from sources outside of Australia while you were a non-resident.

    To determine the next steps in reporting your worldwide income, you will first need to work out if you are an:

    Note: If you have a study or training loan, you will have an ongoing obligation to report your worldwide income, or lodge a non-lodgment advice.

    Australian resident

    If you reside outside Australia for less than 183 days in any 12-month period the below table applies to you.

    If you have a HELP, TSL or VSL loan and are an Australian resident for tax purposes for the full year

    Your worldwide income

    What you need to do

    If you earn worldwide income, including repayment income and foreign sourced income in the income year.

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    If you do not need to lodge a tax return, you may need to lodge a non-lodgment advice form.

     

    To complete the non-lodgment advice form, lodge through ATO online services Tax>Lodgments>Non-lodgment advice or through an Australian registered tax agent.

    Non-resident

    If you reside outside Australia for 183 days or more in any 12-month period the below table applies to you.

    If you have a HELP, TSL or VSL loan and are a non-resident (full or part year)

    Your worldwide income

    What you need to do

    If your worldwide income for the 2018–19 year is at or below $12,989 (AUD).

     

    This is 25% of the minimum repayment threshold.

    You need to lodge a non-lodgment advice form.

     

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    To complete the non-lodgment advice form, lodge through ATO online services Tax>Lodgments>Non-lodgment advice or through an Australian registered tax agent.

    If your worldwide income for the 2018–19 year is above $12,989 (AUD).

    You need to report your worldwide income.

     

    Do you also need to lodge a tax return? Check Do you need to lodge a tax return?

     

    To report your worldwide income, you can lodge through ATO online services Tax>Lodgments>Report worldwide income or through an Australian registered tax agent.

    Note: When declaring your foreign sourced income earned as a non-resident you will have the option of choosing between one of three assessment methods.

    See also:

    How to report your worldwide income

    If you're a non-resident for tax purposes, you can report your worldwide income through either:

    • myTax within ATO online services
    • an Australian registered tax agent.

    If your worldwide income (converted into Australian dollars) exceeds the minimum repayment thresholds, you will be required to make a repayment of your study or training loan liability. Repayments may be in the form of a compulsory repayment or an overseas levy depending on how your worldwide income is made up.

    Note: You can access myTax through ATO online services linked to myGov. Once you've logged in to ATO online services, follow these menu items options: Tax>Lodgments>Report worldwide income.

    When reporting your income you will be asked to confirm if your contact and financial details are up to date – myTax only accepts Australian financial institution details. If you don't have an Australian account you may bypass this step. The bypass is triggered when you have a study or training loan, and an international residential address recorded.

    Example 1: How repayments are calculated

    This example explains how a compulsory repayment and overseas levy may be raised on your reported worldwide income.

    In the relevant Australian income year, Emily earns Australian-sourced repayment income as well as non-resident foreign-sourced income. These two amounts form her total worldwide income.

    The total repayment obligation on Emily’s worldwide income is her worldwide income × the applicable repayment rate.

    As Emily has earned over the minimum repayment rate in Australia, the compulsory repayment component of Emily’s repayment is determined as follows:

    • Repayment income × the applicable repayment rate = compulsory repayment.

    The overseas levy raised on Emily’s worldwide income is calculated as follows:

    • Total repayment obligation − compulsory repayment = Emily’s overseas levy.
    End of example

     

    Example 2: How an overseas levy may be raised

    This example explains how an overseas levy may be raised on your reported worldwide income.

    In the relevant Australian income year, Emily earns only non-resident foreign-sourced income. This amount will form her total worldwide income.

    The total repayment obligation on Emily's worldwide income is her worldwide income × the applicable repayment rate.

    As Emily has earned over the minimum repayment rate in Australian, an overseas levy is raised based on Emily's worldwide income which is calculated as follows:

    Total repayment obligation = Emily’s overseas levy.

    End of example

    See also:

    Information you need to report

    To assist in determining your worldwide income, you may need to refer to notices or statements you have received in your country of residence, or country you earned worldwide income. These may include, but are not limited to:

    • tax assessment or summary from a foreign tax authority (for example, those issued from HMRC, IRS, National Tax Agency)
    • payment summaries or income statements, or payment slips from employers
    • bank statements
    • notices showing amount of government benefits received
    • dividend and interest certificates
    • rental income statements
    • receipts to claim deductions for expenses incurred in earning non-resident foreign sourced income, for example, work-related expenses you incurred while performing your job as an employee.

    Converting your currency

    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.

    Our foreign income conversion calculator will help you convert your foreign currency. If you require a foreign exchange rate for a currency that is not listed within the conversion calculator, you may use any reasonable externally sourced exchange rate for that currency, for example from a bank. The rate of conversion must be the average exchange rate for the Australian income year.

    Next step:

    Completing a non-lodgment advice

    If you did not earn more than 25% of the minimum repayment threshold for the income year you will need to submit a non-lodgment advice.

    Note: You can access myTax through ATO online services and link to myGov. Once you've logged in to ATO online services, follow these menu items options: Tax>Lodgments>Non-lodgment advice.

    A non-lodgment advice is a document lodged instead of a tax return. This document tells us that you will not be lodging a return as you:

    • are not above 25% of the minimum repayment threshold
    • have made a determination that you have no requirement to report your worldwide income which includes lodging an individual tax return.

    Note: If you had previously submitted a non-lodgment advice and your situation has changed, you are still able to report your worldwide income. You can lodge using our online services through myGov or through an Australian registered tax agent.

    Example: Non-lodgment advice

    Harriet has a HELP loan from her undergraduate studies. She moves to the United Kingdom to undertake her postgraduate degree. In the UK, she studies full-time and works casually as a tutor.

    For the relevant income year, Harriet earns the equivalent of $10,500 AUD. This is below the 25% minimum repayment threshold.

    Harriet has made the determination that she does not need to lodge an Australian individual income tax return. She will lodge a non-lodgment advice using our online services through myGov or through an Australian registered tax agent.

    End of example

    See also:

    Assessment methods

    When you declare your worldwide income to us, you may choose one of the following three income assessment methods to calculate your non-resident foreign sourced income.

    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.

    Find out about:

    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.

    Depending on your personal circumstances, you may wish to use a different assessment method to determine the non-resident foreign-sourced income component of your worldwide income. For example, if you have deductions that would be allowable under Australian tax laws.

    Example: Simple self-assessment method

    Anita has been living in New Zealand for two years, working as an occupational therapist. To calculate her non-resident foreign-sourced income, Anita chooses the simple self-assessment method.

    Anita declares her total gross foreign income for the income year and reports her occupation.

    As part of the simple self-assessment method, a standard deduction is then automatically subtracted from her gross foreign income. This works out her net non-resident foreign-sourced income, which is used to calculate her overseas levy.

    End of example

    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.

    There are limitations to using this method. You cannot use this method if:

    • you did not receive a tax assessment from a foreign tax authority
    • you received a tax assessment that does not cover a 12-month period
    • the period of the assessment does not overlap the relevant Australian income year (1 July to 30 June)
    • you received multiple assessments for the income year from tax authorities of different foreign countries
    • you have previously used that income assessment to calculate your foreign income.

    Example: Overseas assessed method

    Lee is living overseas and working as a lawyer. In working out his non-resident foreign-sourced income for the Australian income year, Lee chooses the overseas assessed method.

    Lee has an overseas tax assessment for the period 1 April to 31 March (this overlaps the relevant Australian income year). Lee has not received any other income assessments from other countries. He has not previously used his income assessment to calculate his foreign-sourced income.

    When using the overseas assessed method, Lee reports the foreign income amount he was assessed for as shown on his foreign income assessment. He then converts this to Australian dollars to calculate his non-resident foreign-sourced income.

    End of example

    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 must provide the gross amount (pre-tax amount) of your foreign income. You must do this even if tax was taken out in the country where you earned the income.

    Example: Comprehensive tax-based assessment method

    Nadia is a small business owner in Canada. When working out her foreign-sourced income for the Australian income year, Nadia chooses the comprehensive tax-based assessment method.

    Nadia determines her gross foreign income from her salary and business income. She then works out her allowable deductions related to her employment. Nadia subtracts her allowable deductions from her gross foreign income to work out her non-resident foreign-sourced income.

    End of example

    See also:

    Contacting us from overseas

    You can contact us from overseas for more information. We will need to establish your proof of identity before we can discuss details of your account.

    Ensure you have the right proof of identity documents with you before you contact us, including your Australian passport or Australian birth certificate.

    See also:

    Authorised by the Australian Government, Canberra

    You must repay your Higher Education Loan Program (HELP, formerly known as HECS), Trade Support Loan (TSL) and VET Student Loan (VSL) if you live overseas and are not an Australian resident for tax purposes.
    Last modified: 04 Jul 2019QC 47358