If you live in Australia, you will be expected to pay tax and complete an annual tax return unless you declare yourself a non-tax resident. If you declare yourself as tax resident in Australia, then any income you earn anywhere else in the world may be taken into consideration when completing your annual tax return. Australia has tax agreements with several other countries, including the U.K., the U.S. and New Zealand that mean you have to decide which country you are tax resident in. If you earn an income in Australia, for instance, but have declared yourself tax resident in the U.K., then your Australian income should be included in your U.K. tax return and vice versa.
Taxation Document Translation may be Necessary if you Earn an Income Outside of your Tax Residence
Although preparing your financial records every year if you are completing a tax return in any country can be a chore, it is made more difficult if some of your declarable income is earned in a country where a different language is spoken. This added challenge arises because inevitably you will be asked to provide documentation that shows what you have earned, how it was earned and what you may be trying to use as deductions for tax to be paid. Any documentation will have to be translated into the official language of the country where you are expected to complete a tax return.
To give a concrete example, say you have a property in Thailand, but you have become a resident of Australia, any income you receive from your Thai property may have to be declared in your annual ATO (Australian Tax Office) tax return. If receipts and other documents you have that show how much you have earned are not in English, but are in Thai, they will need to be translated into English by a tax document translator.
Every country has its own tax system, so there is little point in providing details of exactly what documents need to be translated as this depends on the country you are tax resident in. For the majority of people who just go to work and pay their tax through some sort of P.A.Y.E system, there is little to do concerning tax as it is automatically deducted from one’s wages or salary. The only reason why you might need to have your documents translated is if you earn income elsewhere and these earnings are included in your overall income for taxation purposes.
Typical Documents that may have to be Translated for your Tax Return
Here are some examples of typical documents that might need to be translated and supplied with your tax return. If you are not sure whether income or payments you have made or earned outside your tax resident country are needed, you may need to refer to a tax specialist.
● All interest from bank accounts, investments, trust accounts and shares should be recorded
● Any earnings from rent if you own rental property overseas
● Earnings from work you have done for an employer overseas
● Money received from the sale of property or other goods overseas
● Gifts or inheritance you have received from individual family members or friends overseas
The full list is likely to be far longer than these limited examples shown above. There may be penalties for not declaring income earned outside of the boundaries of your tax resident country if you are audited. Most countries, including Australia, allow you to offset your tax responsibilities with a large number of possible deductions. For example, if you go overseas to do some temporary work, e.g. you are an entertainer or professional sportsperson, whatever earnings you receive will be considered together with costs involved with the overseas trip e.g. accommodation, transport and meals as well as things like work related equipment and clothing.
Many countries take into consideration your whole world income for tax purposes, not just the earnings you have made in the country you ordinarily live in. Tax laws are quite complex and if you have property or regularly go overseas to do some work, even if it is temporary, you may have tax obligations in the countries you have property or visit for work as well as your own country.
Penalties for evasion or avoidance of tax can be severe. Generally, most countries insist that you understand your obligations and ignorance of tax responsibilities is not an excuse. There may be several documents that you need to provide to show how much tax you need to pay or have deducted overall. If these are not in the language of the country you are tax resident in, then you will need to have them translated professionally.