Day: March 18, 2013

Greek expats in Australia concerned about potential tax changes

In a move which is certainly a sign of the times, and shows the Greek economy is still under major pressure, the Greek government has this week floated the idea of charging additional tax on Greek property income, either from rental or sale, for expats living in Australia. This is despite the fact that the Australian government and the Greek authorities have in place a “double taxation” agreement which should in practice avoid any such issues.

If you take a step back and look at the situation, there is no doubt that the Greek economy is under pressure, the Greek government is now in the pocket of the European Union and something needs to be done to claw back lost revenue. However, critics of the Greek government blame the fact that potentially hundreds of millions of Euros in taxes have yet to be collected, many of these debts have been written off and suggest this is the area in which regulatory changes should be made.

The Greek community in Australia

The 2006 Australian census states that there were 260,000 people of Greek nationality living Australia with 126,000 actually born in Greece. Therefore, it goes without saying that the Greek expat community in Australia is certainly a significant force and already the Australian government has confirmed that it is “monitoring the situation” with regards to potential issues of double taxation.

The fear is that the Greek government is to effectively deem all people from Greece as “living in Greece” for taxation purposes although they have stated point-blank that they will not tax income earned in Australia. For some reason the Greek expat community does not trust or believe what it is been told at the moment and there is growing anxiety amongst this expat community. There is a potential “get out clause” because the Greek government has suggested that the implementation of the recently confirmed property tax could effectively be delayed or cancelled if the Greek economy improves. How likely is this under the significant financial pressure at the moment?

The future of Greece

It is no surprise to learn that there is a significant Greek expat community in Australia especially when you bear in mind the ongoing economic difficulties. The figure of 260,000 expats gleaned from the consensus of 2006 is likely to be significantly higher especially when you bear in mind recent events. It will be interesting to see how the Australian government supports the Greek expat community because in effect by allowing them to stay in Australia they are under the stewardship of the Australian government.

Quote from AustraliaForum.com : “The Greek government has this week confirmed it is looking at introducing a property tax for Greek expats in Australia, and other areas of the world, earning rental income and sales income on properly held in Greece.”

The short to medium-term outlook for the Greek economy is not good, the Greek government is effectively at the beck and call of the European Union and many experts predict significant budget problems for many years to come. Against this backdrop, it is difficult to see the so-called “get out clause” brought up by the Greek authorities ever being activated. To all intents and purposes, this is something of a red herring to potentially take the edge off the proposed property tax.

Conclusion

While the Greek government has been talking about austerity measures and increased taxation in the same breath, looking towards those who have moved overseas, it is difficult to see how the Greek government can justify pushing this too far. Income on rental property and property sales in Greece has been suggested although so far the legislation has been held back for further discussions. Concerns about potential double taxation problems on income earned in Australia seems to be well wide of the mark but when you bear in mind the precarious position of the Greek government perhaps anything can happen?

It will be interesting to see how far the Australian government is prepared to go to protect the assets and the wealth of Greek expats living under their stewardship. This could well be a major test of the rights of expats when moving to Australia and whether indeed the federal government will look to protect these?

Thousands of Greek Australians face paying higher taxes on their properties in Greece and fear their Australian earnings are also under threat of being doubly taxed.

Greece’s Deputy Foreign Minister, Konstantinos Tsiaras, has responded to those concerns during a visit to Sydney, assuring Greek Australians his government will not tax them on income they earn in Australia.

But Mr Tsiaras said taxes on property owned in Greece and any rental income – or potential income – would be taxed at a higher rate as part of that government’s tough austerity measures.

Introduction of the new taxes has been temporarily postponed and Mr Tsiaras said it was possible they might be revised if the Greek economy improved by the end of this year.

”We believe the stabilisation program that we have followed for about five months now will give us much better economic indicators,” Mr Tsiaras said. ”By the end of the year, we are going to turn the corner.”

Australian officials are expecting the new Greek tax arrangements to be finalised by May.

A spokesman for the Department of Foreign Affairs and Trade said the Australian government was keeping ”possible double taxation agreements under constant review”.

”We have not yet been briefed on new Greek government tax measures,” the spokesman said.

”Once details are clearer, the government will be able to determine the possible impact of the new measures on Australians of Greek descent.”

There are more than 260,000 people of Greek nationality in Australia, with almost 126,000 born in Greece, according to data from the 2006 census.

Mr Tsiaras said the Greek government was also reviewing the need for complicated paper work Greek Australians have been asked to fill out to register their Australian citizenship.

Costa Potiris, a journalist at Sydney’s Greek Herald has written about the proposed tax law changes and said Australia’s Greek community was very concerned about the possibility of paying taxes on income earned in Australia.

”I am considered to be Greek living in Greece therefore all my income is subject to Greek taxation,” he said. ”People are very worried.”

The Greek ambassador to Australia, Charalambos Dafaranos, said there was no risk Greek Australians would be taxed on the income they earned in Australia.

”We want people to know that if they have income from rented properties in Greece or if they have property, they need to declare it,” he said.

”Nobody needs to know how much they earn or pay tax in Australia.

”They will not be required to pay a double tax. What interests us is if they are residents of a foreign land.”

A spokesman for the Australian Tax Office said there had been no talks between Greece and the ATO in relation to Australian residents being taxed for the work they do in Australia.

Australia is also negotiating with Greece on a reciprocal work and holiday visa program between Australia and Greece.

The current draft agreement proposes a cap of 500 visas a year.

The cosmetics guru now has his products available in select Neiman Marcus stores and is the first Australian beauty brand to be carried by the department store since Helena Rubinstein.

“I’ve long admired Neiman Marcus as one of the most luxurious retailers in the world. I believe my brand belongs in that classic department store setting and Neiman’s is the perfect home,” Perdis said.

He started out in Leichhardt in the early `90s before working in Drummoyne, which he describes as an amazing experience.

“I love the people and the cosmopolitan feeling of it, and how my clients were of all different ethnicities. I had a very large, loyal customer base in the inner west of Sydney.”

He said his biggest challenge has been staying consistent and true to his ambition. He sees his company evolving to everything from bath and body to skincare, make-up and nails.

HIS TOP TIPS

* 1 Creating any makeup look is all about priming – not to prime is a crime! That prepares the skin and allows for a great reactivation of the foundation
* 2 I then always do mascara first, because you may not need much more beyond that
* 3 At the moment, I love the pretty preppy make-up look – that classic Ivy League look. It’s all about natural skin, a hint of blush, a subtle mascara application and pretty pink lip

HIGHLIGHT
* Opening up my flagship Makeup Academy and Concept Store on Hollywood Boulevard in the US

Senator Xenophon, a lawyer, met with the residents last week to offer support and discuss possible legal remedies available to them.

“There is a potential legal case,” he told the Guardian Messenger after the meeting.

“We need to get all of the facts on the table and get advice from a barrister so my job now is to collate all the information.”

Mr Xenophon said the legal issues were complicated, and he would again speak with the tenants this weekend to garner more information, before deciding how to proceed.

Senator Xenophon hoped the council and the tenants could reach a compromise which would rule out legal action.

“I really want there to be a negotiated outcome,” he said.

About 40 permanent residents of the seafront park were told by the council in January their leases, which expire on July 1, would not be renewed, to make way for a $3 million redevelopment of the park.

Mr Xenophon also met Holdfast Bay chief executive Justin Lynch and deputy mayor Rosemary Clancy.

“It was a constructive meeting that shows the council is willing to talk,” Senator Xenophon said.

Cr Clancy said the council had informed Mr Xenophon about the council’s offer of help to relocate the tenants.

“It was a very good meeting which recognised the need for the redevelopment,” she said.

“We assured him of our flexibility with arrangements for each individual affected by the change.”

Australia is a vibrant multicultural society according to the findings of the Migration Committee report tabled in the Parliament today (March 18). The report received bi-partisan support and made 32 recommendations after receiving over 500 submissions and holding 27 public hearings over a two year period.

The report found that Australian multiculturalism is a success story, and stands as a good example to the world on how to build a cohesive society.

Member for Parliament Maria Vamvakinou

Chair of the Migration Committee Maria Vamvakinou said: “immigration and settlement in Australia has always been a nation building exercise. The committee believes that access to Australian citizenship has been at the heart of the success and cohesion of Australian society. Settlement is a long term and intergenerational process, and we need a whole of government approach and better coordination between all three tiers of Australian government”.

The committee’s recommendations include: rebuilding Australia’s research capacity in this field, especially in qualitative research; factoring cultural and linguistic diversity into the Government’s Social Inclusion Agenda, greater flexibility in English language training and support for micro enterprises, especially for women. The Committee found Job Services Australia needs to improve its delivery of services to people of diverse backgrounds, including refugees.

Deputy Chair Louise Markus said the committee welcomed meeting people at the grass roots where business and local communities were collaborating to improve relationships, and build skills and opportunities for people from different backgrounds.

“In Dandenong, the South East Melbourne Manufacturers Alliance is bringing employers and young refugees together; the National Australia Bank’s African Inclusion Program is exemplary; and social enterprises, like The Studio, are inspirational. These initiatives deserve special mention and prove that cooperation, cross-cultural awareness, and commitment provide tangible results,” Mrs Markus said.

Mrs Markus said there was “no doubt that immigration has enriched the social, economic and cultural life of our country”.

Ms Vamvakinou said every society is dynamic and open to the influences of globalisation, wars, and economic crises. We are a resilient society and well placed to meet these challenges.