As a non-resident for Australian tax purposes you will be required to lodge an Australian tax return with the Australian Taxation Office (ATO) to report your Australian sourced income & gains.
Should you have an outstanding HELP debt then you are also required to report your overseas earnings on an Australian tax return and make any repayments due.
Your income is taxed at non-resident rates of tax (32.5% on the first $120,000 (2023/2024), $135,000 (2024/2025) and you are not entitled to the tax free threshold ($18,200 for 2023/2024 onwards).
The Australian tax year runs from 1st July to 30th June.
If you have an obligation to lodge an Australian tax return you will need an Australian tax file number (TFN).
If you are working overseas for an Australian employer your income may need to be reported differently.
Firstly you will need to determine if your income is taxable in Australia or/and in the country to which you services are being performed.
Earnings are considered foreign when the work is performed overseas.
Secondly, depending on the length of time spent outside of Australia you will need to consider whether you are still considered to be an Australian Tax Resident.
Your tax residency is fundamental to determine who has taxing rights over your worldwide income with particular reference to the salary being paid to you.
Your residency is often a significant issue, as residents of Australia are subject to income tax on their worldwide income and non-residents are only taxable on their Australian sourced income subject to the exempted income provisions.
It is possible to be a dual resident with the overseas country and Australia. Should this be the case you would need to consider which country has overriding residency which is commonly referred to as treaty residency as it is the conditions set in the double taxation agreement which would determine this deciding point.
Once your residency position has been determined you can better understand who has taxing rights over your income along with your tax reporting obligations in both countries.
When considering an overseas secondment to the United Kingdom you must first give consideration as to what your tax implications are in the UK and the country you are leaving.
The questions to consider:
Your tax residency is fundamental to determine who has taxing rights over your worldwide income with particular reference to the salary being offered to you.
Your residency is often a significant issue, as residents of the UK are subject to income tax on their worldwide income, unless remittance basis claimed and non-residents are only taxable on their UK sourced income subject to the exempted income provisions.
It is possible to be a dual resident with the overseas country and the UK. Should this be the case you would need to consider which country has overriding residency which is commonly referred to as treaty residency as it is the conditions set in the double taxation agreement which would determine this deciding point.
Once your residency position has been determined you can better understand who has taxing rights over your income along with your tax reporting obligations in both countries.
As a non-resident for Australian tax purposes you will be required to lodge an Australian tax return with the Australian Taxation Office (ATO) to report your Australian sourced income & gains.
Your income is taxed at non-resident rates of tax (32.5% on the first $120,000 (2023/2024) $135,000 (2024/2025) and you are not entitled to the tax free threshold ($18,200 for 2023/2024 onwards).
The Australian tax year runs from 1st July to 30th June.
You will need to apply for a tax file number in order to lodge an Australian Tax Return if you do not already have a TFN and you have an obligation to lodge.
Should you have an outstanding HELP debt then you are also required to report your overseas earnings on an Australian tax return and make any repayments due.
As a non-resident for Australian tax purposes living in Hong Kong you will be required to lodge an Australian tax return with the Australian Taxation Office (ATO) to report your Australian sourced income & gains.
Should you have an outstanding HELP debt then you are also required to report your overseas earnings on an Australian tax return and make any repayments due.
Your income is taxed at non-resident rates of tax (32.5% on the first $120,000 (2023/2024) $135,000 (2024/2025) and you are not entitled to the tax free threshold ($18,200 for 2023/2024 onwards).
The Australian tax year runs from 1st July to 30th June.
You will need to apply for a tax file number in order to lodge an Australian Tax Return if you do not already have a TFN and you have an obligation to lodge.
As a non-resident for Australian tax purposes you will be required to lodge an Australian tax return with the Australian Taxation Office (ATO) to report your Australian sourced income & gains.
Your income is taxed at non-resident rates of tax (32.5% on the first $120,000 (2023/2024) $135,000 (2024/2025) and you are not entitled to the tax free threshold ($18,200 for 2023/2024 onwards).
The Australian tax year runs from 1st July to 30th June.
You will need to apply for a tax file number in order to lodge an Australian Tax Return if you do not already have a TFN and you have an obligation to lodge.
Should you have an outstanding HELP debt then you are also required to report your overseas earnings on an Australian tax return and make any repayments due.
If you are leaving Australia to go live and work overseas for a period of time it is important that you obtain professional tax advice in relation to your Australian tax residency position and the impact this may have on your future reporting and ongoing tax implications.
There are a number of tests to best determine your residency position which are detailed below:
The primary test of tax residency is called the resides test. If you reside in Australia, you are considered an Australian resident for tax purposes and you do not need to apply any of the other residency tests.
Some of the factors that can be used to determine residency status include:
There Are Several Aspects of The Resides Test
“…it is important that you obtain professional tax advice in relation to your Australian tax residency position and the impact this may have on your future reporting and ongoing tax implications.”
You are an Australian tax resident if your domicile (the place that is your permanent home) is in Australia, unless your permanent place of abode is outside of Australia.
A domicile is a place that is considered to be your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).
There are two steps to this test:
Determine your domicile
Determine your permanent place of abode
This test only applies to individuals arriving in Australia. You will be a tax resident of Australia under this test if you are physically present in Australia for more than half the income year, whether continuously or with breaks.
Under this test, you may be said to have a constructive residence in Australia unless it can be established that:
In this test, your usual place of abode must be outside of Australia. This is different to the first test (domicile) that requires us to be satisfied that your permanent place of abode is outside Australia.
This test only applies to individuals arriving in Australia. You will be a tax resident of Australia under this test if you are physically present in Australia for more than half the income year, whether continuously or with breaks.
Under this test, you may be said to have a constructive residence in Australia unless it can be established that:
In this test, your usual place of abode must be outside of Australia. This is different to the first test (domicile) that requires us to be satisfied that your permanent place of abode is outside Australia.
Non-resident tax returns are only required in relation to Australian sourced income only and certain dividend distributions along with foreign sourced income due to HELP reporting purposes only.
Taxable Australian property will remain tax in Australia either as a tax resident or non-resident of Australia.
Non Australian taxable property will remain taxable in Australia as non-resident of Australia if you apply the deeming provisions otherwise they may be taxable in the overseas countries of resident by virtue of the double taxation agreement between the two countries.
You can continue to make superannuation contributions as a non-resident of Australia however, you may be worth obtaining professional financial advice before doing so as to what this may mean in the event of you not returning to Australia.
In the event of your return to Australia it is important that you obtain professional advice to assist you in determining what is the effective date that you may resume your tax residency and the impact this may have on your worldwide income.
You would need to ensure that your overseas affairs are closed off and you have an effective date of ceasing to be a tax resident in the overseas country.
Any income that is due to you has been paid to you prior to your departure and arrival in Australia to avoid paying tax in Australia.
If you have left or are leaving Australia and would like a fixed fee proposal from a firm of UK & Australian tax advisors that understands the issues affecting individuals living overseas please complete our online enquiry via our contact us button or by calling a GM Tax office closest to you.
Contact UsYou can apply via the ATO website.
The filing deadline will vary depending of whether you are lodging the tax return yourself of via a registered tax agent:
You will continue to file an Australian tax Return as a non-resident to report any Australian sourced income and overseas income in the event of an outstanding HELP debt.
Once the financial year has passed you can lodge an electronic submission of your tax return otherwise you can lodge a paper submission shortly after your departure from Australia. The processing times are longer than an electronic submission.
Yes, if you are in receipt of Australian sourced income or have an outstanding HELP/SFSS debt.
As a non-resident no however, if you are considered a tax resident then your overseas income may be taxable in Australia.
Your citizenship does not affect your tax position.
