This is really confusing. Are you being paid a salary or invoicing them as a company would?
If you are paid a salary - you will probably pay Aussie taxes but may claim some of it back if you can prove alternative tax residence (but may need to pay there to get the Aussie money back).
If you are paid as a corporation. The corporation pays tax wherever it is based. Any salary payments made to you from that corporation may be taxable wherever you are currently tax resident. That depends on the rules of wherever you are tax resident.
I reread my post, and it’s not very clear. Sorry about that.
I will be invoicing them.
My question was more to do with the fact that their company is based in Australia, and whether this would cause me to be taxed there (regardless of my tax residency).
You don't get tax based on where the company is based, you get taxed where YOU are a resident. i.e. if you work for a US company remotely and if you spend most of your time in Australia doing work, your income is basically declared in Australia. Likewise, if you are working for an Australian company and are based in the US, you pay tax to the US government.
Obviously there are a few caveats to the rules but that's basically the general guideline - you pay tax based on your residency.
Disclaimer: Please do not take this as legal counsel and seek an accountant for more appropriate advice.
Here are a link regarding taxation in Australia for foreign companies:
https://www.ato.gov.au/Business/International-tax-for-business/In-detail/residency/residency-requirements-for-companies,-corporate-limited-partnerships-and-trusts/
Basically: A foreign company is a resident of Australia if:
.."it carries on business in Australia and has either
- its central management and control in Australia
or its voting power controlled by shareholders who are residents of Australia."
Regarding Singapore vs HK; if your company is also resident in Australia, then you can possible use the Aus-Sin double tax treaty to avoid paying income tax in Singapore. In HK you would have to go through offshore claim process in HK.
If your company would not be resident in Australia, then the tax double treaty treaty doesn't apply, except for payments like interest, royalties (need to study actual treaty in details).
I would get good accounting advice, but this is what I would take them as a first draft based on my understanding of a few things (which may be wrong):
I would set up my company in Hong Kong - assuming you can get over there and set up the necessary bank accounts etc. Territorial corporate tax system means your HK company would owe no tax on Australian-sourced income.
I would move somewhere with a territorial based personal tax system long enough to establish residency there. If you remain an Australian resident for tax purposes, it doesn't matter where the company is incorporated - you will owe tax in Australia. And the ATO is going to do its darndest to keep your local residency - I'd prefer to be able to tell them "I'm a tax resident here" rather than argue I'm not tax resident anywhere.
And then with my travels, I'd be careful not to accidentally establish tax residency somewhere else (eg, by spending too long in the UK where I'm also a citizen).
Then based on my accountant's advice, I'd determine whether it would be worth the effort. I ran some figures a while ago, and we needed to be earning $200K+ per annum for some of the stuff to really make a difference. Paying no tax is nice (and I realise that wasn't your question), but maximising the amount in my pocket at the end of the year is really the goal.
Regarding Australia, here is a link:
https://www.ato.gov.au/Business/International-tax-for-business/In-detail/residency/residency-requirements-for-companies,-corporate-limited-partnerships-and-trusts/
This is really confusing. Are you being paid a salary or invoicing them as a company would? If you are paid a salary - you will probably pay Aussie taxes but may claim some of it back if you can prove alternative tax residence (but may need to pay there to get the Aussie money back). If you are paid as a corporation. The corporation pays tax wherever it is based. Any salary payments made to you from that corporation may be taxable wherever you are currently tax resident. That depends on the rules of wherever you are tax resident.
I reread my post, and it’s not very clear. Sorry about that. I will be invoicing them. My question was more to do with the fact that their company is based in Australia, and whether this would cause me to be taxed there (regardless of my tax residency).
When you say "me", do you mean yourself or the corporation?
Sorry, yes the company.
You don't get tax based on where the company is based, you get taxed where YOU are a resident. i.e. if you work for a US company remotely and if you spend most of your time in Australia doing work, your income is basically declared in Australia. Likewise, if you are working for an Australian company and are based in the US, you pay tax to the US government. Obviously there are a few caveats to the rules but that's basically the general guideline - you pay tax based on your residency. Disclaimer: Please do not take this as legal counsel and seek an accountant for more appropriate advice.
Here are a link regarding taxation in Australia for foreign companies: https://www.ato.gov.au/Business/International-tax-for-business/In-detail/residency/residency-requirements-for-companies,-corporate-limited-partnerships-and-trusts/ Basically: A foreign company is a resident of Australia if: .."it carries on business in Australia and has either - its central management and control in Australia or its voting power controlled by shareholders who are residents of Australia." Regarding Singapore vs HK; if your company is also resident in Australia, then you can possible use the Aus-Sin double tax treaty to avoid paying income tax in Singapore. In HK you would have to go through offshore claim process in HK. If your company would not be resident in Australia, then the tax double treaty treaty doesn't apply, except for payments like interest, royalties (need to study actual treaty in details).
I would get good accounting advice, but this is what I would take them as a first draft based on my understanding of a few things (which may be wrong): I would set up my company in Hong Kong - assuming you can get over there and set up the necessary bank accounts etc. Territorial corporate tax system means your HK company would owe no tax on Australian-sourced income. I would move somewhere with a territorial based personal tax system long enough to establish residency there. If you remain an Australian resident for tax purposes, it doesn't matter where the company is incorporated - you will owe tax in Australia. And the ATO is going to do its darndest to keep your local residency - I'd prefer to be able to tell them "I'm a tax resident here" rather than argue I'm not tax resident anywhere. And then with my travels, I'd be careful not to accidentally establish tax residency somewhere else (eg, by spending too long in the UK where I'm also a citizen). Then based on my accountant's advice, I'd determine whether it would be worth the effort. I ran some figures a while ago, and we needed to be earning $200K+ per annum for some of the stuff to really make a difference. Paying no tax is nice (and I realise that wasn't your question), but maximising the amount in my pocket at the end of the year is really the goal.
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The corporation should pay taxes where it is tax resident, not necessarily the same as where it is Incorporated.
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Regarding Australia, here is a link: https://www.ato.gov.au/Business/International-tax-for-business/In-detail/residency/residency-requirements-for-companies,-corporate-limited-partnerships-and-trusts/