Double Taxation: Foreign source Income and Burmese Citizens abroad
As a general rule, a resident taxpayer has a responsibility to pay tax on worldwide source of income, both domestic and foreign source. Foreign source income could be employment income, dividends, interests, rents and royalties. Not every foreign source income attracts income tax liability. Employment income is exempt from taxation in most Commonwealth Nations provided that the income is taxed at source country. Employment income includes salaries, wages, commissions, bonuses and allowances.
Even though income that attracts tax liability may have a mechanism to avoid double taxation being imposed by way of tax offset known as Foreign Tax Credit System. These general principles are currently recognized in USA, UK, Australia, New Zealand and a few other Commonwealth Countries.
Burmese Citizens abroad are liable to pay tax to the respective Burmese Embassy. In Australia, every Burmese citizen who holds Burmese Passport (red color) is liable to pay a fixed tax of AUD$ 60.00 per month disregard of source of income, whether it is employment income or dividend or interest income.
Even if one has no income, liability can not be avoided. What will happen if one does not pay a fixed tax of AUD$ 60.00 per month? One of the consequences is that it is unlikely to have his Passport renewed when renewal is due. In every two or three years, Burmese Passports are due for renewal. When it is due, one has to pay tax irrespective of whether he has income or not plus additional renewal fee of previously AUD$260.00. In that way Burmese citizens abroad are taxed. Majority of Burmese citizens abroad are employment income earners rather than other sources. Most income is taxed at source country; therefore, according to principles adopted by Commonwealth countries, such income is exempt from taxation.
However, Burmese citizens in Australia are forced to pay a fixed tax of AUD$ 60.00 per month. In that way double taxation applies to Burmese citizens abroad except to those in Britain in pursuance of paragraph 2 of Nu-Attlee Agreement.