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Taxation of foreign pensions


Both Australia and the United States recognise the need for their citizens to be able to self-fund their retirement, and the importance of having a globally mobile workforce. This article assesses the tax impact that Art 18, "Pension, Annuities, Alimony and Child Support", of the US Australia double tax treaty would have on the mobility of human capital between Australia and the US. In the author's view, in its current form, Art 18 has the potential to significantly hinder the free flow of human capital, for reasons which are discussed in the article.

The article outlines the current position, including the Australian and US tax treatment of retirement benefits. The article then examines the US domestic treatment of Australian superannuation, and the current Australian treatment of US pensions. The author recommends that Art 18 be amended so that Australian and US-sourced benefits are taxed in accordance with the rules of the country in which the benefits were derived.

Author profile:

Peter Harper
Peter is an Australian tax lawyer, international tax adviser and market entry specialist. He has spent most of his career advising foreign owned privately held businesses on US market entry, and founders and executives on the migration impact of becoming citizens of “expatland”. Market entry and global migration are complex areas of tax law, and when proper advice is not obtained, he is also called on to coordinate the resolution of multi-jurisdictional international tax controversies. Peter’s core focus is extracting value for founders and executives, and he believes in a “stakeholder framework” to corporate taxation. The “stakeholder framework” encompasses the development of tax strategy that facilitates value extraction for founders and executives, rather than for the corporations that such founders have created and such executives manage. Peter advises entrepreneurs and business owners, private clients, family offices, private wealth managers and listed corporations on: international expansion; executive migration; cross-border mergers and acquisitions; and international estate and succession planning. Peter has presented seminars for various global wealth management firms, the International Franchise Association, the American Australian Association, KEA New Zealand, and Advance. Peter is a member of the New South Wales Law Society, the New York Bar Association, the Georgia Bar Association, and the Society of Trusts and Estates Practitioners.
Current at 1 March 2017 Current at 14 March 2017 Click here to expand/collapse more articles by Peter Harper.


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