Home – New Forums Money matters Tax implications of using overseas freelancers ?

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  • #991091
    Dragan201
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    Hi,

    I have a startup company (pty ltd) providing IT services to Australian based clients. I have voulonteraly registered for GST, revenue is still below 75k pa. At this stage I am trying to reduce the cost so I am doing all accounting my self.
    As part of my business I am using overseas freelancers. I am wondering what are tax implications. Ie I am paying them using bank transfer, what type of invoice/receipts I need to have from them, are there any restrictions who I can use/pay etc.

    Regards,

    Dragan

    #1179947
    Dave Gillen – Former FS Concierge
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    Hi Dragan,

    Welcome to Flying Solo!

    Personally I treat this as a business expense just as you would for any other business purchase, and keep your receipts (showing the cost and the service rendered).

    But I’m no accountant, so more specific advice might follow from our members.

    See you around. :)

    Dave

    #1179948
    ShellysBookkeeping
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    Hi Dragan,
    If the freelancers are used for business purposes you can claim the cost as a business expense. Just remember if they are overseas contractors, you can’t claim any GST credits for the expense. Just make sure you obtain a receipt.
    Shelly

    #1179949
    Dragan201
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    ShellysBookkeeping, post: 209812 wrote:
    Hi Dragan,
    If the freelancers are used for business purposes you can claim the cost as a business expense. Just remember if they are overseas contractors, you can’t claim any GST credits for the expense. Just make sure you obtain a receipt.
    Shelly

    Thanks Shelly! Is there any minimum requirement on what shall be on their receipt?

    Regards,

    Dragan

    #1179950
    ThexArm
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    Dragan201, post: 209814 wrote:
    Is there any minimum requirement on what shall be on their receipt?

    I don’t think there is any minimum requirements. As Dave said it is a business expense and obtain the invoice or receipt for the expenses.

    I would steed clear of dodgy transactions. Because if the expenses look too high for your kind of operations then Tax man can pick you up for an Audit. This happens only when your are filing your annual tax return.

    As mentioned, you can’t claim any GST on these expenses.

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