I have had many discussions with Australian Expats who worry that AUSTRAC will report their money transfers to Australia to the Australian government. Many Australian expats also incorrectly believe that by only transferring amounts less than A$10,000 their transfers won’t get reported to the Australian government. So what are the rules and should you be worried?
Should You Be Worried?
As my mother always told me, “Craig, the best thing to do is always tell the truth”. As an Australian Expat you will have more complicated financial affairs than most people. Whether your money transfers to Australia are being reported to the Australian government or not – obtain good tax and financial advice, file your tax returns in accordance with your obligations both in Australia and your foreign country of residence, keep good financial records and you should have nothing to be concerned about. Trying to avoid reporting thresholds will only get you into more trouble as you will read below…
Australian Transaction Reports and Analysis Centre (AUSTRAC)
AUSTRAC is an Australian government agency and is Australia’s anti-money laundering and counter terrorism financing regulator and specialist financial intelligence unit.
According to AUSTRAC’s website, “AUSTRAC collects and analyses financial information provided by regulated entities to assist Australian law enforcement, national security, social justice and revenue agencies and certain international counterparts, in the investigation and prosecution of serious criminal activity, including money laundering, terrorism financing, organised crime and tax evasion”.
Regulated entities include over 16,000 businesses in Australia across financial services providers, the gambling industry, bullion dealers and remittance service providers.
What gets reported to AUSTRAC?
Regulated entities have obligations to report certain activities to AUSTRAC, including:
- currency transactions of $10,000 or more,
- foreign currency transactions equivalent to A$10,000 or more
- money transfers to Australia and money transfers from Australia of any amount
- suspicious transactions of any kind that the regulated entity may suspect of being part of tax evasion or a crime
You are also obliged to report to AUSTRAC if you are carrying more than $10,000 (or equivalent in foreign currency) in cash into or out of Australia.
Splitting your transaction (or often referred to as “structuring”) is referred to the practice of arranging your transactions in such a way to avoid triggering reporting requirements (for example, rather than depositing $18,000 in one transaction it is split into two deposits of $9000). Many money launderers rely on this technique because numerous deposits can be made in this way, without triggering reporting requirements.
It is an offence in Australia to split your transactions if the dominant purpose of splitting the transaction is to avoid the reporting rules and thresholds. The penalty for structuring transactions can be as much as imprisonment for up to 5 years or a fine of up to A$165,000 for companies or A$33,000 for individuals. If a regulated entity believes that structuring has taken place, they are obligated to report it to AUSTRAC.
What have your experiences been with your money transfers to Australia? Has it triggered questions from the Australian Tax Office, AUSTRAC or other authorities? How was it resolved? Share your experience in the comments below.
What is the best way to transfer money to Australia?
Want to get the best exchange rate when making money transfers to Australia? Read about why I use companies like OFX (and no longer use a bank) for making international money transfers. Read the article here.
Unsure of the tax implications for Australians working abroad?
Understanding your tax residency and being able to answer Am I an Australian Resident for taxation purposes? is critical if you work abroad. Check out some tax and financial advisors that specialise in working with Australians living abroad.
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way.