Gratuities

[Russell21]

Big M I'll give you 2 clues that may help you understand the tax situation.

1. Reciprocal taxation agreements.

2. Flags of convenience.

 

With regard to 1. Why do you think James Packer's grandfather transferred the family company to the Bahamas many years ago.

 

With regard to 2. Have a look at the registration ports of the cruise ships.

[Aus Traveller]

Most residents of developed countries are liable for tax on onshore and offshore earnings. It's not tax free in any case.

I know that Australians should report any off-shore earnings and pay tax. I have had a couple of Aussies say that with a wink and a nod. Obviously paying tax would make the remuneration less attractive, so I would not be surprised if some people conveniently 'forget' to report this income. I also don't believe that Princess would report these payments to the governments of every one of their employees. We often hear how many nationalities are employed on the ships.

[MicCanberra]

I know that Australians should report any off-shore earnings and pay tax. I have had a couple of Aussies say that with a wink and a nod. Obviously paying tax would make the remuneration less attractive, so I would not be surprised if some people conveniently 'forget' to report this income. I also don't believe that Princess would report these payments to the governments of every one of their employees. We often hear how many nationalities are employed on the ships.

 

That would only work with an off shore account as if the money is coming into Australia, there is no hiding from the ATO.

[Russell21]

The lecture on the Dawn Princess in November by the Cruise Director clearly stated that the crew paid no tax. He also confirmed why Aussies were not employed on ships that worked in Australian waters.

This is the last time I waste computer time on this subject.

[Kiwi Kruzer]

That would only work with an off shore account as if the money is coming into Australia, there is no hiding from the ATO.

 

The Tax Office , in whatever country , can only apply the rules.....and we all know that rules have loopholes .;)

[Docker123]

The Tax Office , in whatever country , can only apply the rules.....and we all know that rules have loopholes .;)

 

Loopholes, or portholes? :D

[MicCanberra]

The Tax Office , in whatever country , can only apply the rules.....and we all know that rules have loopholes .;)

Very true.

:cool:

Loopholes, or portholes? :D

 

Very funny.:p

[Aus Traveller]

That would only work with an off shore account as if the money is coming into Australia, there is no hiding from the ATO.

It would work if it is paid in cash or (as you say) into an overseas bank account. :) If the person was working on a ship based in (for instance) USA, they would probably want a bank account there so they could access it.

Edited December 7, 2016 by Aus Traveller

[MicCanberra]

It would work if it is paid in cash or (as you say) into an overseas bank account. :) If the person was working on a ship based in (for instance) USA, they would probably want a bank account there so they could access it.

 

Exactly, if it was coming into an Australian account, ATO would be onto it.:D

[The_Big_M]

Big M I'll give you 2 clues that may help you understand the tax situation.

1. Reciprocal taxation agreements.

2. Flags of convenience.

 

With regard to 1. Why do you think James Packer's grandfather transferred the family company to the Bahamas many years ago.

 

With regard to 2. Have a look at the registration ports of the cruise ships.

 

Regarding 1. Perhaps I'm wrong, but I wouldn't expect too many cruise ship service staff have family trusts and companies, and offshore bank accounts with regards to their home country. And Packer wasn't a cruise line employee, so isn't a great example.

 

Regarding 2, where the company is registered is a matter for the business, not the employee. See the earlier point about offshore income. Whether the income is from a Bahamas registered company or an NZ company, it's still off-shore income.

[The_Big_M]

I know that Australians should report any off-shore earnings and pay tax. I have had a couple of Aussies say that with a wink and a nod. Obviously paying tax would make the remuneration less attractive, so I would not be surprised if some people conveniently 'forget' to report this income. I also don't believe that Princess would report these payments to the governments of every one of their employees. We often hear how many nationalities are employed on the ships.

 

Whether the employee reports it or not is their own decision, just like any other income they may or may not make. That doesn't make it sanctioned.

 

I agree Princess would not be reporting it to other countries. As with other companies they report it to the countries they are registered and reporting to, and it is then up to the other countries to have AML, tax and similar financial reporting agreements at country level.

[The_Big_M]

That would only work with an off shore account as if the money is coming into Australia, there is no hiding from the ATO.

 

Not even offshore. Look at Project Wickenby as one example, but there are multiple sharing agreements with foreign countries to share bank account and taxation information.

[The_Big_M]

The lecture on the Dawn Princess in November by the Cruise Director clearly stated that the crew paid no tax. He also confirmed why Aussies were not employed on ships that worked in Australian waters.

This is the last time I waste computer time on this subject.

 

You've put a lot of faith in what a cruise director told you, especially about a subject that's not his domain.

 

I can think of many examples of incorrect statements given by cruise directors that they are meant to know i.e. ports of call requirements, tendering arrangements, border and quarantine procedures, duty free limits... So making the statement above doesn't mean it is true or even correct.