Within this publication 'foreign resident' is the same as 'non-resident'.
Residency is a central concept in taxation. It determines what income you need to declare in your tax return. It also determines what tax rates apply to your taxable income to determine how much tax you need to pay.
Most people who are born in Australia and are currently living in Australia are Australian residents for tax purposes. It is also possible to be an Australian resident for tax purposes but not be living in Australia. For example, if you go overseas on a long holiday, such as 18 months, but keep your bank accounts, car and house in Australia, you may still be an Australian resident for tax purposes. Although you are not physically in Australia you are still said to be a resident for tax purposes because of the connections you have with Australia.
If you have moved to Australia from overseas and intend to stay for the foreseeable future and set up connections with Australia, you may also be an Australian resident for tax purposes.
Residency can be difficult to determine in some circumstances.
Australian residents, for tax purposes, need to declare income they have earned from anywhere in the world in their tax return. Foreign residents need only declare income they derived in Australia.
If you are an Australian resident for tax purposes you:
If you are a foreign resident for tax purposes you:
- have a tax-free threshold of $1 (that is, you pay tax on any assessable income you earn in Australia)
- cannot claim most tax offsets
- do not pay the Medicare levy.
More information
For more information about Residency refer to:
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If you have difficulty working out your residency status for tax purposes, phone us on 13 28 61.
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Last Modified: Monday, 4 March 2013