NZ work from home. Aussie job. illegal?

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kingdragonfly

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#295846 28-Apr-2022 16:43

I'm a New Zealand citizen.

I sent my CV to Australia for an exclusively work-from-home position.

He was trying to get me to move to Melbourne, and argued that he couldn't use Filipinos to work-from-home because it was illegal. (I'm not from the Philippines, so didn't see the relevance.)

His argument this is illegal:

a Kiwi living outside Australia
but earning money in Australia

He stated you have to be a tax-citizen of Australia you have to live Australia, due to a "recent law change"

I did a Google search, but I don't see anything like that.

I could understand that someone from the Philippines could have trouble being an Australia tax citizen, but I assume a Kiwi would be OK (???)

Does that sound right?

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#2907968 28-Apr-2022 16:50

Tax Resident is the term, enrolled in AU Medicare etc, and pay into Australian Super etc

Any views expressed on these forums are my own and don't necessarily reflect those of my employer.

SirHumphreyAppleby

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#2907969 28-Apr-2022 16:54

Most likely they just can't be bothered. Here is a recent article from a law firm which talks about the issue and there certainly is no mention of any illegality (which I very much doubt is the case).

wellygary

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#2907971 28-Apr-2022 16:58

You can certainly have non resident tax status in OZ...

but It sounds like the employer simply doesn't want to deal with non OZ domiciled employees...

Did they advertise it as a global position??

Handsomedan

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#2907972 28-Apr-2022 16:58

I had a friend who was working from both AU and NZ, commuting once a month.

He ended up moving to AU as there were tax implications for working in NZ while being paid in AU/by an AU company - it was to do with tax residency, but also had some sort of implication that if he worked in NZ for an AU company, being paid as an AU employee, he'd need to pay tax in both countries...I didn't quite understand and largely lost the will to live when he was telling me all about it, but it sounded legit.

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kingdragonfly

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#2907973 28-Apr-2022 17:01

Excellent article @SirHumphreyAppleby

I think there's a risk to the Australian company, if large portions of the company worked from New Zealand.

He might be referring to this bit of text:

"There are a number of tax issues which arise when an employee of an Australian entity is working outside Australia, both for the employer and the employee. In particular, by allowing an employee to perform work in a foreign country, there is a risk of creating a permanent establishment for corporate tax purposes. This may cause the employer to have to register and pay tax in the foreign jurisdictions.

As with any remote working arrangement, employers should ensure that they clarify that any arrangement is temporary
(where intended) and that they have the ability to bring any overseas working arrangement to and end at any time. In this
way, employers can avoid triggering any potential termination or other types of claims in the employee's location in
circumstances where it looks to return employees to the office or bring any overseas arrangements to an end."

Note it doesn't say anything about New Zealand, just "a foreign country."

kingdragonfly

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#2907977 28-Apr-2022 17:04

wellygary: Did they advertise it as a global position??

They did not, but I assumed a New Zealand right-to-work in Australia covered it.

I made it clear in the first sentence of my CV I was a Kiwi, looking for a work-at-home position from New Zealand, and not interested in moving.

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surfisup1000

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#2907978 28-Apr-2022 17:05

If Australia really had this rule, their economy is about to end!

Imagine a manufacturing plant that needs an update to their plant from Germany... bad luck, the germans all have to move to australia and become residents first.

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#2907979 28-Apr-2022 17:08

Can be done, know someone who does it now, but is registered in AU for taxes. So no issue long as you're honest. And I'm pretty sure the employer will want it all to be legit as well so they don't get stung.

XPD / Gavin

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kingdragonfly

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#2907980 28-Apr-2022 17:08

Handsomedan:
I had a friend who was working from both AU and NZ, commuting once a month.

He ended up moving to AU as there were tax implications for working in NZ while being paid in AU/by an AU company - it was to do with tax residency, but also had some sort of implication that if he worked in NZ for an AU company, being paid as an AU employee, he'd need to pay tax in both countries...I didn't quite understand and largely lost the will to live when he was telling me all about it, but it sounded legit.

I thought the rule of thumb throughout the world was wherever you live for 6 months and a day (183 days) was your tax residency.

So he might be correct in that the Australian company would have to pay New Zealand taxes, and couldn't be bothered.

kingdragonfly

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#2907981 28-Apr-2022 17:11

xpd:
Can be done, know someone who does it now, but is registered in AU for taxes. So no issue long as you're honest. And I'm pretty sure the employer will want it all to be legit as well so they don't get stung.

@xpd, that makes sense. I suppose it similar to being a sole trader here.

roobarb

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#2908038 28-Apr-2022 21:34

surfisup1000:

If Australia really had this rule, their economy is about to end!

Imagine a manufacturing plant that needs an update to their plant from Germany... bad luck, the germans all have to move to australia and become residents first

My reading is that if the German employees are employed by a German company and the Australian company pays the German company for the work then the employees require work visas as they are "providing a service". If their registered home address is in Germany and paid in Germany by the German employer then they would not need an Australian tax number. Where it might get interesting is if the German employee is not a permanent resident of Germany then absence from Germany for 6 months may invalidate their residency there.

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kingdragonfly

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#2908049 28-Apr-2022 22:12

I found this website talking about registering as a sole trader in Australia. Sounds simple (at least when compared to the US tax system)

https://www.quicklaws.com.au/news/structure-your-business

Tzoi

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#2908067 28-Apr-2022 22:51

Depending on your role, the potential for creating a permanent establishment for the AU company in NZ should be low. It's probably more likely to do with the annoyance of having to run a shadow payroll and related complications. While you could rearrange into an independent contractor type arrangement, that is fact specific because it may be that while the contract you sign says you are a contractor, you are actually still an employee, creating potential liabilities

Tzoi

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#2908069 28-Apr-2022 22:55

You can be tax resident in more than one country - NZ and AU both have "permanent place of abode" tests as well as the 183 day tests from what I understand so you can have a permanent place of abode in one country, while being present in the other for more than 183 days. Also, if you are tax resident through the 183 day test, you only lose that once you have been absent from the country for 325 days, so there can be overlap. But the double tax agreement between the two countries means you don't get double taxed, it just creates annoyances and complexities. But in this situation you wouldn't be Australian tax resident, its just the systems required to handle a NZ employee can be annoying

kingdragonfly

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#2908104 29-Apr-2022 08:32

Thanks for the great advice @Tzoi

Because it's free, and makes me sound more serious, I applied for an Australian tax number.

I don't think I'll need it, but it doesn't hurt to have one.

People living outside Australia - Apply for an Australian tax file number (TFN) "TFN"

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