• Tax on Australian income for foreign residents

    This page is for foreign residents who source an income in Australia.

    Here you will find information on what income you must report in your annual Australian tax return.

    Foreign residents must lodge an income tax return in Australia and pay tax on all Australian-sourced income, except for interest, unfranked dividends and royalties (that has already been correctly taxed).

    Australia has tax treaties with other countries and this may impact the amount of tax you need to pay. Ensure your Australian financial institutions have your updated overseas address and residency status so they deduct the correct amount of tax. This will reduce follow-up actions by Australia or a treaty country when discrepancies are found.

    Income type

    How tax applies

    Australian pensions and annuities

    You must include Australian pensions and annuities you receive in your Australian income tax return, unless an exemption is available under Australian tax law or an applicable treaty.

    Australian employment income

    Working in Australia - what you need to know explains how to engage in the tax system if you are taking up work in Australia.

    Australian investment income

    Investing in Australia - what you need to know explains how to treat income from passive investments in Australia such as securities and rental properties, as well as interest and royalties.

    Interest, unfranked dividends and royalties

    You do not need to include this income in your Australian income tax return if tax has been correctly withheld - refer to Investing in Australia - what you need to know.

    Franked dividends

    Franked dividends you receive are exempt from Australian income and withholding taxes - refer to Investing in Australia - what you need to know.

    Rental income

    Investing in Australian property outlines the way tax applies to rental income you receive from a property in Australia.

    Australian business income

    Doing business in Australia - what you need to know explains how tax applies to income you receive from Australian business activities you conduct.

    Income from exports of goods and services to Australia that is defined as Australian income

    You must include this income in your Australian income tax return and pay tax on the amount you receive unless an exemption is available under an applicable treaty - refer to Doing business in Australia - what you need to know.

    Income from:

    • promoting or operating casino gaming junket arrangements
    • entertainment and sports activities
    • construction, installation and upgrading of buildings, plant and fixtures and for other works and related activities.
     

    Foreign resident withholding tax is withheld by the payer. You need to report this in your Australian income tax return - refer to Foreign resident withholding - who it affects.

    Capital gains on disposal of Australian assets

    Generally, you must include capital gains you make on assets that are considered taxable Australian property in your Australian income tax return and pay tax on that amount - refer to Capital gains in Australia.

      Last modified: 28 Oct 2016QC 18342