Home – New Forums Money matters Off shore bank account, expenses, and taxes

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  • #972520
    perla
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    I’d like to get general advices on the financial accounting. I will definitely seek advices from an accountant but I would like to hear what you think of this. I’m just starting up a business and some of my investment funds are depositing in an off-shore bank account. If I use those funds to pay off some of the business expenses that incurred overseas, would that complicated the taxes calculation? When the expenses incurred, can I just record them as if they are incurred in Australia (providing that I have supporting documents)? I’m not sure if my question even makes sense but thanks so much in advance!

    #1056578
    Past-Member
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    Hi – I am not an accountant, so this is just what is on the ATO website
    http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/00243030.htm

    Some taxpayers don’t realise that as Australian residents they must include overseas income and the profits from sale of any assets in their Australian income tax returns. Immigrants may be unaware of these rules because the income tax laws in their country of origin may be different.

    All income has to be declared to the ATO. For example, if I purchase something overseas to use in or onsell in my business, it is a deduction. GST or otherwise is the only other issue or import duties. I have a PayPal account and had some monies paid in that were in US dollars – I spent the US dollars and had to take a record of the conversion rate to Australian Dollars at the same time (it can be weekly, monthly but must be consistent) and you must make a record somewhere about it so it can be included in your tax return. Of course this applies to both buying and selling in currency other than your own. Hopefully your accountant will be able to help you sort it out so that your expenses are valid.

    The ATO can be very helpful if you give them a call and the website has extensive information also. http://www.ato.gov.au

    Good luck with your new business.

    #1056579
    bridiej
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    I have an offshore bank account that I use to pay for some business services and also receive payment from clients and I convert the whole lot to AU$ as it makes it much easier for the accountant to figure out!

    #1056580
    perla
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    Thank you for clarifying that for me. I wasn’t sure about the legitimacy of the money spending off-shores particularly on very small items; whether or not they can be deducted as business expenses. Thanks again!

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