ATO Payment: A Guide To Paying a Debt from Overseas
If you’re an Australian citizen or resident heading overseas to live or work, you may still be liable to lodge your tax return, and pay any owed tax to the Australian Taxation Office (ATO). The exact rules which apply will depend on whether you remain an Australian resident, and the types of taxes or repayments you may owe.
More information about scenarios, payment options and plans, below.
Do I need to pay taxes in Australia if I live abroad?
Tax is never completely straightforward, so it’ll be no surprise that there are quite a range of situations in which you may need to make payments to the ATO, even if you’re not living in Australia. The ATO advises that any Australian citizen or resident moving abroad should make sure they’re clear on their tax and super obligations before leaving.
It’s worth taking professional advice if you’re unsure how your taxes and other ATO payments may change once you leave the country. However, some common scenarios in which ATO payments may still apply include:
Individuals:
- Australians that have moved to New Zealand and make HELP/HECS payments (Student Loans)
- People who own assets or property in Australia and are required to pay Capital Gains tax
- People who live overseas but with Australian sourced taxable income
- Child Support which is payable in Australia
Businesses:
- New Zealand companies with assets or accounts in Australia may be required to pay tax and/or GST
- New Zealand and international companies which are expanding into Australia will need to register and pay ATO taxes
Can I pay my taxes in Australia if I live overseas?
Yes. Once you’re overseas you can use ATO online services to check your tax status and manage your accounts, and pay any money owed using a direct bank transfer. One option is to make payments to the ATO through currency expert OFX. This is handy if you’re getting paid in a currency other than AUD and need to convert your funds back to dollars to make a payment. OFX transfers to the ATO use your PRN (payment reference number) to reconcile your transfer with the ATO’s records, so you’ll know your payment is properly registered by the authorities.
OFX payments to the ATO are fee free and use the OFX exchange rate – which is usually better than the rate you’ll get with a normal bank.
If you need to make an OFX payment to ATO, here’s what to do:
- Register a new OFX account online or by phone
- Log into your account, and select the ATO at the money transfer recipient for your payment
- Add details of the currency and amount you need to send
- Enter your PRN which is available by logging into the ATO website and viewing your statement
- Send your payment to OFX
- Once it’s cleared, OFX will pass the payment directly to the ATO in AUD
Using a specialist service rather than your bank will usually mean you get a lower overall cost and better exchange rate when you send a payment internationally. However, it’s still worth shopping around as the rates and fees available from specialist services do still vary. To see if OFX is the best value for your ATO payment, compare their fees and rates with a few other providers using this comparison calculator.
How can I find out the amount I owe to ATO?
If you want to find out more about how much you owe the ATO as an individual, you’ll need to log into myGov online. Here you can see the amount owed and also the due date, covering payments such as income tax and PAYG instalments.
Businesses can also find out all they need to know about payments, by logging into the ATO’s online services for business. Here you’ll be able to see due dates for lodging, owed amounts and the relevant payment reference numbers for making your transfer to the ATO.
What is a payment arrangement?
The ATO offers support for individuals and businesses which may face financial difficulties and struggle to pay their tax bills. A payment arrangement can be set up to break down the costs of repaying into smaller instalments which are then covered over an agreed period of time.
Payment arrangements can be set up online if you owe less than 100,000 AUD, and can afford the proposed repayments. There are also handy tools online to help calculate the costs of a payment arrangement from the ATO so you can plan your budget.
Can I do a payment plan on my taxes if I live abroad?
Whether or not you can set up a payment arrangement will depend on your individual situation, including your residency status, how much you owe, and how much you can afford to repay.
Can I pay my tax in instalments in Australia?
Usually you’ll be notified of your individual income tax repayment schedule by the ATO, and will need to make any payment by the due date. However, if you find you can not meet your ATO obligations you may be able to set up a payment plan which splits the cost of your personal or business tax into instalments. These can then be repaid over a set period of time, using a direct debit or automatic credit card payment schedule for example.
Is there a one time tax forgiveness?
The ATO may consider releasing an individual from some tax debts if their payment would leave them unable to provide for themselves or their family. This release process involves making a formal application which is then assessed against ATO rules. You’ll be able to find out more – and see if the release process may apply to you – on the ATO website.
How to make a payment to the ATO?
To make a payment to the ATO you’ll need your PRN which can be found by logging into your myGov account or looking at a statement. If you’re paying from an AUD denominated account you have a few different payment options, including BPAY, debit or credit card, or internet banking. However, if you’re paying from a foreign currency you’ll need to convert your funds to AUD before you can deposit them with the ATO.
From foreign currency accounts you could choose to make a payment directly from your bank, or use a third party service – like currency specialist OFX. Using a specialist service can often mean you get a better exchange rate and lower overall fees compared to using your bank – although it’s still worth shopping around to make sure you’re getting the very best deal available. If you choose to pay the ATO using OFX you’ll be able to transfer your funds in AUD directly to the ATO using your payment reference number to identify the transfer as your own.
FAQ
Do I have to pay tax in Australia if I live overseas?
If you’re an Australian resident or citizen and move overseas, you may still be liable for some ATO taxes depending on your circumstances.
How long does the ATO give you to pay a tax debt?
You’ll be notified of the payment due date by the ATO – it may vary depending on the type of tax or other payment you’re making.
How do you pay taxes internationally?
Pay your taxes from overseas using a bank transfer or specialist service which can convert your funds to AUD before depositing them with the ATO.
