Can un-paid taxes affect sponsorship?

[damo]

Hi guys, nice site!

The title pretty much says it all but i'll go into a little bit more detail. My employer is considering sponsoring me but as i came here originally as a backpacker (18months ago) and i was working with an ABN instead of tax file number i was told by lots of people that i wouldn't really have to worry about paying my taxes but now im thinking of staying long term, im worried that this is going to be a major problem. If it comes down to it, im happy to pay the taxes but i have no records of how much i earned and how much tax i would owe. Im hopeful that i'll also be able to pay it off in installments as opposed to one large sum but im just not sure? All help appreciated

[Sheelagh Blanckenberg]

Thanks for the compliment damo, we're slowly working on it.

I am not a tax specialist and cannot give any advice on the law in this regard. Please consult a tax expert if you are worried - they will be able to give you proper advice regarding your situation.

From a migration perspective however, you will be asked somewhere on the visa application you make whether you have a debt owing to the Commonwealth of Australia. It is how you answer this question which poses the problem for you.

Our immigration department collaborates and exchanges information with a number of other government departments, the tax office being one of them.

So if you answer no, and you actually do have a tax debt, this may get picked up and from a migration perspective, may raise character questions about you, which if sufficiently dire, could result in you being denied the visa or, if the visa is granted, having the visa cancelled some time in the future.

If you answer yes, you will need to explain what the debt is and usually the visa will not be granted until this debt is sorted out.

If it were me, and I was happy to pay whatever taxes I might have incurred, I would be inclined to just contact the Australian Taxation Office (ATO), present them with my ABN number and ask them if I have any outstanding tax returns to make or outstanding tax liabilities to pay and then take it from there.

I would imagine the ATO comes across this type of thing a lot with backpackers and will be able to clearly advise you of your situation and what you should do next if you need to file a return or pay back taxes, etc etc.

Get advice from a tax lawyer if you are worried. This will give you peace of mind you are doing the right thing.

Kind regards

Sheelagh

[nvoorst]

Hi Damo,

I completely agree with Sheelagh's answer. While ignorance of the law is no excuse, many Australians are also forced onto these "contractor with ABN" agreements, without fully understanding the consequences.

I imagine that you could come to some sort of an understanding with the tax office, if you explained your circumstances. To be on the safe side, it certainly would not hurt to talk to a taxation expert first.

I definitely would not start a visa application with an unresolved tax issue.

Best of luck,

Nick van Voorst

[damo]

Thanks guys for the replies, i shall keep you updated on my progress. This is such a helpful site. Im now on the look out for a taxation expert, i really hope that i can come to an agreement where i can pay the tax of in installments rather than in one big lump sum