Australian crew on a superyacht based in a port offshore may still be liable to pay tax in Australia, even though the yacht never sails to Australia.
Liability to pay tax in Australia depends upon whether they are a resident or non-resident of Australia for tax purposes. In turn, this depends upon a large number of factors. These factors have to be balanced against each other to determine whether a person is a non-resident.
One of the biggest hurdles for a yachtie on an offshore yacht is showing that they have what is called a “permanent place of abode” outside Australia.
In some cases a yachtie may have offshore accommodation when they take shore leave. Although not certain, this would assist in making a case that he or she has a permanent place of abode outside Australia. However in many instances the only accommodation they have is a cabin where they store all their personal possessions. This makes their case for being a non-resident of Australia particularly difficult. However, it is not a lost cause and there are many other factors to be taken into account.
If you obtain legal advice now that it is reasonably arguable that you are a non-resident, this will assist you in the future if you are audited. If you have obtained written legal advice, the ATO will consider the arguments in the advice which may well persuade them you are a non-resident. If, after considering the advice, they decide that you are a resident, you will not be liable for substantial penalties which could be double the total tax payable.
If you require certainty about whether you are considered a non-resident, you can request a Private Binding Ruling from the ATO. Such a request needs comprehensive legal reasoning as it is a very difficult area of law and there are many relevant cases.
Get legal advice now if you are an Australian crewing on a superyacht crew to make sure you are not going to be hit with a big tax bill and penalties if you are audited.