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Tax guidelines and regulations for large money transfers into Australia
Australia generally doesn't tax gifts — but it does tax foreign income.
If you’re sending a large amount of money to Australia, both you and your recipient may be required to report it on your taxes.
How Australia regulates large remittances
If you’re sending a large sum of money to friends and family in Australia, they could be on the hook for taxes regulated by the Australian Taxation Office, depending what you’re sending it for.
If you’re sending money for business purposes, including for purchasing goods, receiving advice or counsel or investing in a business, your recipient will have to declare it as foreign income on their yearly tax returns.
In general, one-time gifts or inheritances transferred into the country are not subject to a gift tax. But Australia leaves their tax code vague, stating that “gifts may be taxable if they are large amounts or you receive them as part of a business-like activity.” This allows them to charge taxes if someone tries to pass off a business payment as a gift.
If you’re concerned about a large transfer, speak to a tax professional to make sure that you comply with Australia’s taxation regulations.
Do I have to report large transfers out of the US?
Possibly. If you’ve sent more than $15,000 as a gift in the last year or more than $10,000 for business purposes, or if you’re sending money to a foreign account in your name that’s held more than $10,000 in the past year, you’ll need to report it.
By law, banks are required to report cash transactions that exceed $10,000 — and transactions of any amount that raises suspicions. For independent money transfer businesses, the reporting threshold can be as low as $1,000. Talk to a tax professional about whether your money transfer complies with federal taxation guidelines.
What are the penalties in Australia if my recipient fails to file?
If your recipient owed money on the transfer but didn’t report it on their income taxes, they can owe up to a 75% penalty on the taxes owed. If they’re convicted of tax evasion or fraud, the penalties can be higher and include jail time.
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How much money can I send to Australia?
To put it simply, as much as you want. Neither the US nor the Australian government puts a cap on remittances. But some money transfer providers do set their own limits, so if you’re planning a large transfer, use a limit-free provider like XE.
How will my recipient in Australia get the money?
Depending on which transfer provider you use, your recipient can pick up the cash in person or have the money deposited directly into their bank account or mobile wallet.
If they’re picking up the money in person, have them bring a photo ID and transaction or confirmation number with them.
Sending money to Australia is fast and simple if you use a reputable money transfer provider, but if you’re sending money for business purposes, both you and your recipient may be responsible for reporting it on your taxes.
As with all international money transfers, protect yourself from fraud by only sending money to people you know. Using a reputable provider can help to safeguard you from potential scams.
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