Tax implications of transferring money awarded to an offshore subsidiary to Australia?
We were awarded a prize of USD100,000 for winning a competition in Abu Dhabi and the money is being held in a bank account in Hong Kong of a subsidiary company to our Australian company. What are the tax implications if this money is transferred from Hong Kong to Australia? Is prize/grant money won overseas taxable in Australia? Thanks in advance.
Foreign income is a "tricky" tax area where I strongly encourage you to see a tax agent specifically specialising in foreign income tax law.
1. Check out my links below
2. Call the ATO and discuss the above, request a response from an ATO representative who specialises in foreign income.
3. Pay a Tax Agent to assist you familar with foreign tax law and ATO requirements
That stated, these ATO links may help.
https://www.ato.gov.au/Individuals/Income-and-deductions/Income-you-must-declare/Foreign-and-worldwide-income/
Benefits or prizes from investment-related lotteries and some game-show winnings
You must include at this item the value of benefits or prizes you received from an investment-related lottery offered by an investment body such as a bank, building society or credit union. Prizes can include cash, low-interest or interest-free loans, holidays or cars.
Do not include prizes won in ordinary lotteries, for example, lotto draws, caskets and raffles. Do not include prizes won in game shows unless you regularly receive appearance fees or game-show winnings.
https://www.ato.gov.au/Individuals/Tax-return/2021/Supplementary-tax-return/Income-questions-13-24/24-Other-income-2021/
Thanks Amanda for the responce. Will contact the ATO.
