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I had some money in a foreign PayPal account which I earned before coming to Australia.

Later, I moved to Australia in July 2019 as an international student. And in order to withdraw the money to my AU bank account, I had to create an AU PayPal account and transferred the amount to the new account from my old account (I know not the most brilliant idea.)

So now, I have that amount on my Australian PP account but didn't withdraw it yet to my bank account.

Now my questions are:

  • Do I have to pay income tax on my PP income?
  • If yes, how much is that?

In my country, we don't pay income tax, therefore, I am a bit novice about all the situation.

Thank you for your help.

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If you earned the money in your PayPal account overseas before even arriving in Australia, then there is no tax payable on that money, as you would be classed as a non-resident for tax purposes.

You will only pay tax in Australia on the money you earn in Australia, whether that is through employment in Australia, through a business in Australia, interest on your savings in Australia and any investment income earned in Australia.

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  • The thing is I transferred the money from my overseas PP account to my AU PP because that was the only way to withdraw the amount to my AU bank account after coming to AU. – fatimah shams Dec 9 '19 at 9:14
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    But did you earn that money in Australia? No, you just transferred it. That is like transferring money from an overseas bank account to an Australian bank account. You will only pay tax on any interest earned on that money whilst in an Australian bank account. – Victor Dec 9 '19 at 22:08
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Any money that transferred to an individual bank account is not subjected to tax. However, you must declare it if the amount exceeds A$10000. The declaration is just a part of anti-money laundering measurement, no details explanation required. Do not try to outsmart the system by transfer a lot of money and make it below $9999 to avoid declaration. Because the bank does keep track of peculiar activities, always keep a track record of your foreign currency transfer if you do large transfer frequently.

By the way, transfer foreign currency using Paypal account is never a good idea for an individual. Because paypal conversion rates is ~3%, it is as bad as using bank money transfer services. Services such as transferwise, instarem charge a lower fees and give you the best conversion rates. You can check out this advise on how to save some pocket money.

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  • Well it turns out the banks weren't keeping track of peculiar activities, but maybe they'll finally start – Fred Stark Dec 13 '19 at 6:15

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