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International tax for individuals

Australian residents are generally taxed on their worldwide income from all sources. Temporary residents of Australia and foreign residents are generally taxed only on their Australian-sourced income, such as money they earn working in Australia.

To understand your tax situation you first need to work out if you are an Australian or foreign resident for tax purposes. This may be different to your residency status for other purposes – for example, you could be an Australian resident for tax purposes even if you're not an Australian citizen or permanent resident.

Next step:

Find out about:

See also:

Work out your residency status for tax purposes

To understand your tax situation, you first need to work out if you are an Australian or foreign resident for tax purposes.

We don't use the same rules as the Department of Immigration and Border Protection (now known as the Department of Home Affairs). This means you:

For a summary of key information about residency status, download Residency for tax purposes (PDF, 1.03MB)This link will download a file.

On this page:

Work out your residency status

As an individual you will fit into one of the following three categories:

There are separate rules for working holiday makers and individuals who are tax residents of more than one country.

The easiest way to work out your tax residency is with our calculators. If you are in Australia for:

If you have been living in Australia and have left or intend to leave, see Determination of residency status – leaving AustraliaThis link opens in a new window.

Residency tests

Resides test

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 don't need to apply any of the other residency tests.

If you don't satisfy the 'resides test', you'll still be considered an Australian resident if you satisfy one of three statutory tests.

Domicile test

You're an Australian resident if your domicile (broadly, the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside 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).

A permanent place of abode should have a degree of permanence and can be contrasted with a temporary or transitory place of abode.

183-day test

This test only applies to individuals arriving in Australia. You will be a resident under this test if you're actually present in Australia for more than half the income year, whether continuously or with breaks.

You may be said to have a constructive residence in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here.

The Commonwealth superannuation test

This test applies to Australian government employees working at Australian posts overseas and who are members of the CSS or PSS schemes. It does not apply to members of the PSSAP scheme.

Example – Australian resident under the domicile test

Emily leaves Australia to work in Japan as a teacher of English. Emily has a one-year contract after which she plans to tour China and other parts of Asia before returning to Australia to continue work here.

Emily lives with a family in Japan during her time there and rents out her property in Australia.

Emily is an Australian resident for tax purposes even though she is residing in Japan because, under the domicile test:

End of example

 

Example – foreign resident for tax purposes

Bronwyn, an Australian resident, receives a job offer to work overseas for three years, with an option to extend for another three years. Bronwyn, her husband and three children decide to make the move.

The rent out their house in Australia as they intend to return one day. While overseas they rent a house with an accommodation allowance provided under Bronwyn's contract.

Bronwyn is considered a foreign resident for tax purposes because she does not satisfy 'the resides' test. This is due to:

Bronwyn has also not satisfied the domicile test, as:

End of example

See also:

Common tax residency situations

We've listed some common residency and tax situations below.

Tax residency can also depend on whether the country you are going to or coming from has a tax treaty with AustraliaExternal Link, so check this also.

Are you a resident for tax purposes?

If you…:

you are generally:

leave Australia temporarily and do not set up a permanent home in another country

an Australian resident for tax purposes

are an overseas student enrolled in a course that is more than six months long at an Australian institution

an Australian resident for tax purposes

are visiting Australia, working and living in the one location and have taken steps to make Australia your home

an Australian resident for tax purposes

are visiting Australia and for most of that time you are travelling and working in various locations around Australia

a foreign resident for tax purposes

are either holidaying in Australia or visiting for less than six months

a foreign resident for tax purposes

migrate to Australia and intend to reside here permanently

an Australian resident for tax purposes

leave Australia permanently

treated as a foreign resident for tax purposes from the date of your departure

Failure to cut connection with Australia

A legal decisionExternal Link in 2013 shows that a person who fails to cut their connection with Australia will be treated as an Australian resident.

Residency and tax categories

Foreign residents

If you're a foreign resident for tax purposes you must declare on your tax return any income earned in Australia, including:

As a foreign resident:

If you have a Higher Education Loan Program (HELP) or Trade Support Loan (TSL) debt you'll need to declare your worldwide income or lodge a non-lodgment advice. You can do this using our online services via myGov or through a registered Australian tax agent. For more information, see HELP and TSL overseas obligations. The Study and training loan repayment calculator will help you find out your compulsory repayment or overseas levy amounts.

To work out if you need to lodge, use our Do I need to lodge a tax return tool.

Australian resident for tax purposes

If you're an Australian resident for tax purposes, you have to declare all income you earned both in Australia and internationally on your Australian tax return.

A foreign income tax offset is generally available to reduce the Australian tax on the same income.

Temporary residents

If you have a temporary visa, and neither you or your spouse is an Australian resident within the meaning of the Social Security Act 1991 (that is, not an Australian citizen or permanent resident), you're a temporary resident. This means you only declare income you derived in Australia, plus any income you earn from employment performed overseas for short periods while you are a temporary resident of Australia.

Other foreign income and capital gains don't have to be declared.

Next step:

See also:

Coming to Australia

You may come to Australia to reside permanently, study or holiday.

If you earn money here you will pay tax and need to lodge an Australian tax return. To work in Australia you need a work visa and a tax file number.

Find out about:

Studying in Australia

If you're enrolled to study in Australia in a course that lasts for six months or more, you're generally regarded as an Australian resident for tax purposes. This means:

Generally Australian residents must declare all income they've earned, both in Australia and internationally, on their Australian tax return. However, as an overseas student you probably have a temporary visa, which means that you may be a temporary resident. For more information, see Foreign income exemption for temporary residents.

If you're a temporary resident, most of your foreign income is not taxed in Australia and you don't declare it on your Australian tax return. You only declare income you derive in Australia, plus any income you earn from employment or services performed overseas while you are a temporary resident of Australia.

Next steps:

See also:

Moving to Australia permanently

On this page:

How tax works in Australia

If you migrate to Australia and intend to reside here permanently, you are an Australian resident for tax purposes. This means:

Before you start working in Australia, or soon after, you may need to get a tax file number (TFN). The main tax you will pay is income tax. This is charged on income you receive, such as salary and wages, investment income and business income. At the end of the income year (30 June), most people must lodge an annual tax return.

You can get a registered tax agent to advise you on tax and prepare and lodge your tax return for you.

These agents are the only people allowed to charge a fee to prepare and lodge your tax return. They must be registered with the Tax Practitioners Board and follow strict regulations.

Next steps:

Annuities, pensions and superannuation from your previous country

Most Australian residents must pay tax on foreign pensions and annuities. This is the case even if the country that made your payment has already withheld tax from it.

You may be entitled to deduct the part of your annual pension or annuity income that represents your personal contributions being returned to you. This is called the undeducted purchase price.

You may claim a foreign income tax offset if your foreign pension or annuity is taxed both in Australia and in the country that paid it.

Pensions and annuities are usually taxable only in the country of residence of the recipient. If your payment has also been taxed in a country with which Australia has a tax treaty, you may be entitled to a refund of that tax from that country. You may also be able to arrange not to have tax withheld from future payments from that country. You can do this by supplying a tax relief form or a certificate of residency or status.

You may be able to transfer super from a foreign super fund to a complying Australian super fund or yourself. Whether you can make these transfers will depend on the rules of the super fund you are making the transfer from.

If you transfer super, you pay income tax on any earnings on your foreign super that have accrued since you became an Australian resident or terminated your foreign employment. But you don't have to pay any tax if you make the transfer within six months of either of these events.

See also:

Overseas properties you own

As an Australian resident, any income or capital gains you make from your overseas properties is generally taxable in Australia. It must be declared in your Australian tax return. If you have paid tax in another country on that income or gain, you may be entitled to a foreign income tax offset.

See also:

Offshore bank accounts

Some tax authorities in other countries don't require you to report interest earned overseas, but we do. If you hold bank accounts in other countries, you must report any interest or other income earned from these accounts in your Australian income tax return. You may have to pay additional charges if you don't do this.

Example: Offshore bank account

Javed came to Australia as an overseas student. Having completed his degree, he became a permanent resident under the skilled migration program. He visits his relatives in India every year and has left his Indian bank account open for easy access to local funds.

When preparing his first tax return as a permanent resident, Javed reads on our website that bank interest from offshore accounts is taxable in Australia. He discloses the interest that has accrued in his account in India over the year.

We receive information from the Indian Department of Revenue about interest payments as part of the Automatic Exchange of Information program. Javed’s name appears in the data. The interest amount reported is consistent across the two sources. Javed is complying with his tax obligations, so we take no follow-up action.

End of example

See also:

Paying tax and lodging a tax return

After the end of the Australian income year (30 June), you lodge an annual tax return to tell us how much income you received and tax you paid. We then send you a notice of assessment and your tax refund if you're entitled to one.

Next steps:

We check information reported on tax returns against records reported by other organisations to make sure that people pay the correct amount of tax.

Do you need to lodge a tax return?

You can use our calculator to work out if you need to lodge a tax return.

You do not need to lodge an Australian tax return if:

Aside from these exceptions, you must lodge a tax return if any of the following apply:

Next step:

See also:

What income you pay tax on

On this page:

To determine whether you are an Australian resident or foreign resident for tax purposes, see Work out your residency status for tax purposes.

Australian residents

As an Australian resident for tax purposes:

Australian residents (for tax purposes) with a tax file number generally pay a lower rate of tax than foreign residents.

If you are an Australian resident for tax purposes and you:

Foreign residents

If you are a foreign resident working in Australia:

Payments for the following are subject to foreign resident withholding tax:

Your payer will withhold this tax. You report the payments in your Australian tax return and claim the withheld amounts as a credit against the tax assessed.

If you have a Higher Education Loan Program or Trade Support Loan debt and you are a part year or full year non-resident for tax purposes, you'll need to declare your worldwide income or lodge a non-lodgment advice using our online services via myGov from 1 July 2017. Read more about Overseas obligations.

See also:

If your residency status changes during the year

If your residency status has changed from foreign resident to Australian resident for tax purposes during the income year, answer 'Yes' to the question on your tax return 'Are you an Australian resident?'. This ensures you will be taxed at Australian resident rates for the tax year. Because you have been a foreign resident for part of the year, your tax-free threshold will be reduced.

You must include in your Australian tax return any foreign-sourced income you received while you were an Australian resident for tax purposes. Any Australian-sourced interest, dividends and royalties derived when you were not an Australian resident for tax purposes are subject to the withholding tax provisions and should not be included in your tax return - that is, your payer should withhold tax from those amounts at the time of making the payments to you.

See also:

How and when to lodge your tax return

You can lodge your tax return:

The Australian income year ends on 30 June. You have from 1 July to 31 October to lodge your tax return for the previous income year.

If you use a registered tax agent to prepare and lodge your tax return, you may be able to lodge later than 31 October. Contact a tax agent before 31 October to arrange this.

Returning to your home country

On this page:

Lodging your tax return

If you worked in Australia, you will probably need to lodge an Australian tax return after 30 June. You can lodge your tax return online from your home country.

If you are leaving Australia permanently, you may be eligible to lodge an Australian tax return early. In this case, you must lodge a paper return, which takes longer to process.

If you still have assets in Australia

If you have been an Australian resident but are leaving Australia and keeping assets here, you should know about capital gains tax (CGT) and going overseas.

Claiming your super

Any super contributions paid by your employer must remain in your super fund account while you are in Australia.

You can claim your super if you:

When you meet the above conditions, you can then receive your super entitlements as a departing Australia superannuation payment (DASP).

A DASP is not taxed as a superannuation lump sum benefit but is subject to tax under a final withholding tax arrangement.

Your super fund will deduct this tax. Additionally, a DASP is neither your assessable income nor exempt income.

Apply online for a departing Australia super payment (DASP)

This is a free service and your eligibility is confirmed automatically.

New Zealand citizens and permanent residents of Australia are not eligible for the departing Australia super payment.

The Trans-Tasman Retirement Savings Portability Scheme permits transfers of retirement savings between super funds for people who emigrate from one county to the other.

Claiming GST and WET refunds

You may be able to claim a refund of the goods and services tax (GST) and wine equalisation tax (WET) included in the price of goods you bought in Australia. You do this at the airport or seaport when you actually leave.

See also:

Working in Australia

On this page:

What you need to work in Australia

To work in Australia you need a visa that allows you to work here. You should also have a tax file number (TFN).

Visas are issued by the Department of Home Affairs. You can check if your visa allows you to work by using the department's free Visa Entitlement Verification Online (VEVO) serviceExternal Link.

Your TFN is your personal reference number in our tax system. You can apply for a TFN online once you have your work visa and have arrived in Australia. You should apply for your TFN before you start work or soon after.

Apply for a TFN

You don't have to have a TFN, but you pay more tax if you don't have one. Getting a TFN is free.

If you think someone else has used your TFN or it has been stolen, phone us on 1800 467 033 (within Australia), between 8.00am and 6.00pm, Monday to Friday.

When you start a job

Complete a Tax file number declaration

Your employer will ask you to complete a Tax file number declaration, which tells them your TFN and whether you are an Australian or foreign resident for tax purposes.

Your employer uses the information to work out how much tax to withhold from your wages. They should also provide your TFN to your superannuation fund so it can accept your superannuation contributions and pay the correct tax on them.

You have 28 days to provide a completed Tax file number declaration to your employer. If you don't, they must deduct a higher rate of tax from your pay.

You should give your TFN to your employer only after you start work for them. Never give your TFN in a job application or over the internet.

Your employer deducts tax

Your employer will deduct tax from your pay and send it to us. This is called 'pay as you go withholding'.

You can check how much tax should be taken from your pay.

Superannuation entitlements

Superannuation (or 'super') is Australia's retirement savings system. If you are a temporary resident, your employer should pay super contributions for you just as they do for eligible Australian resident employees.

It doesn't matter whether you work full time, part time or casually.

Your employer must pay super contributions into a super fund on your behalf if you are paid A$450 (before tax) or more in a calendar month and you are either:

Your employer does not need to pay super for you if you are doing work of a private or domestic nature for 30 hours or less each week – for example, if you are employed as a nanny.

Compulsory employer super contributions are in addition to your salary. Most people can choose which Australian super fund these contributions are paid into.

You can use the Estimate my super calculator to work out if you are eligible for super payments and how much your employer should contribute.

See also:

Cash payments and 'contractor' payments

Some employers prefer to pay in cash instead of to a bank account. This is okay, provided they still:

If they don't do these things, you could get less pay and super than you're entitled to.

Some employers may incorrectly treat you as a contractor or even encourage you to get an Australian business number (ABN). Having an ABN doesn't make you a contractor. Only people who carry on a business can have an ABN.

If an employer offers to pay you in cash without deducting any tax or paying contributions into your super fund, report them to us by phoning 1800 060 062 (within Australia) between 8.00am and 6.00pm, Monday to Friday. You don't have to give us your name.

When you leave a job

After the end of the income year (30 June), your employer will give you a payment summary. This shows how much you earned and how much tax was deducted from your wages. If you leave a job during the year, you can ask for your payment summary when you leave. Your employer must give it to you within 14 days.

After 30 June you lodge an annual tax return to tell us how much income you received and tax you paid. This information will be on your payment summaries. We then send you a notice of assessment and your tax refund if you are entitled to one.

If you're leaving Australia permanently you may be able to claim your super.

Next steps:

Working holiday makers

If you work in Australia, tax will be withheld from your pay and you may need to lodge a tax return each year. The requirement to lodge a tax return will depend on how much income you have earned during the year.

The Australian income year starts on 1 July and ends on 30 June the following year.

As a working holiday maker the first $37,000 of your income is taxed at 15% and the balance is taxed at ordinary rates. You are a working holiday maker if you have a visa subclass:

You can check your visa status using the Visa Entitlement Verification Online serviceExternal Link.

As a working holiday maker, your employer also has to pay super for you if you are eligible. When you leave Australia you can apply to have your super paid to you as a Departing Australia Superannuation Payment (DASP). The tax on any DASP made to working holiday makers on or after 1 July 2017 is 65%.

Find out about:

Australian resident or foreign resident?

Most people who come to Australia for a working holiday or to visit are foreign residents for tax purposes. This includes people on visa subclass 417 (Working Holiday) or 462 (Work and Holiday) (backpackers).

See also:

Applying for a tax file number

If you plan to work in Australia you need a tax file number (TFN). Your TFN is your personal reference number in our tax system. You can apply for a TFN online once you have your work visa.

You don't have to have a TFN, but without one you pay more tax.

See also:

Starting work – TFN declaration

When you start work, you give your employer a TFN declaration. This helps the employer work out how much tax to withhold from your pay.

Your employer will check if you have a visa subclass 417 (Working Holiday) or 462 (Work and Holiday), but you should tell them anyway to ensure they tax you correctly.

Your employer is required to register with us as an employer of working holiday makers. Working holiday makers do not register.

If your employer is registered with us, they will withhold tax from your pay at 15% on the first $37,000 of income.

Example 1

Gorge is on a 417 Working Holiday visa and has started work for Paul's Pickles. As Paul is a registered employer of working holiday makers, 15% tax will be withheld from Gorge's pay.

Gorge earned $500 in the first week and had $75 tax withheld.

End of example

If your employer is not registered with us as an employer of working holiday makers, they must withhold tax from your pay using foreign resident tax rates. Foreign resident tax rates start at 32.5%.

Example 2

Aleks is on a 417 Working Holiday visa and started working for Pamela's Berries. As Pamela is not registered as an employer of working holiday makers, Pamela will withhold tax at the foreign resident tax rates starting at 32.5%

Aleks earned $500 in the first week and had $162.50 tax withheld.

End of example

Finishing work – payment summary

When you finish work, you will receive a payment summary showing how much you earned and how much tax was withheld from your pay. You use the information in the payment summary to determine if you need to lodge a tax return, and if so, complete your tax return.

Your employers will also report the details from the payment summary to us.

Lodging a tax return

The Australian income year ends on 30 June each year.

You do not need to lodge an income tax return or a non-lodgment advice if both of the following apply:

You are required to lodge an income tax return if your taxable income for the year was more than $37,000.

If you leave Australia permanently before 30 June, you can lodge your tax return early.

When you lodge a tax return, we work out how much tax you should have paid based on your actual income for the year. If too much was withheld from your pay, we will refund the difference to you. If you have not paid enough, we will send you a bill.

Example 3

Louie lives in Belgium and is planning a working holiday in Australia.

In preparation for his trip, Louie applies for a TFN, indicating that he is not an Australian resident for tax purposes. He is granted a 417 visa before his arrival in Australia.

On 10 January 2018, Louie starts work with Bob's Mango Farm in Far North Queensland. As part of the normal employment process, Louie gives Bob a TFN declaration and tells him that he is a working holiday maker on a 417 visa.

As Bob is a registered employer with us, the first $37,000 of Louie's income is taxed at 15%.

Louie is paid weekly and earns $100 a day. After five days of work, Louie receives his first pay of $500, from which $75 tax is withheld and sent to us.

Louie finishes working for Bob in April after earning a total of $6,000. Bob gives Louie a payment summary showing he earned a total of $6,000 and had $900 tax withheld.

As Louie's total taxable income for the year is below $37,001 Louie is not required to lodge a tax return for the 2018 income year.

End of example

Tax comparison

The working holiday maker tax rate is different to the tax rate for Australian residents.

The working holiday maker tax rate is 15% until you earn $37,000.

Australian resident taxpayers get the first $18,200 tax-free (known as the tax-free threshold), and then pay 19% until they earn $37,000.

Our individual income tax rate page shows the most up-to-date rates and thresholds, including those above $37,000. Australian residents, foreign residents and working holiday makers pay the same tax rates on income over $37,000.

The following examples show how this works, and the key differences between working holiday makers and Australian residents.

Example 4

Klaus is a German backpacker on a 417 visa and earned $37,000 in the 2018 income year.

Klaus will pay 15% of his income in tax.

$37,000 × 15% = $5,550

Klaus:

In total, Klaus will pay $5,550 tax.

End of example

 

Example 5

Richelle is an Australian resident. She earned $37,000 in the 2018 income year.

Richelle gets the first $18,200 of her income tax free. She will pay 19% tax on the income between $18,200 and $37,000.

That works out to be:

($37,000 − $18,200) × 19% = $18,800 × 19% = $3,572

In addition, Richelle also:

In total, Richelle pays $3,572 + $740 − $445 = $3,867 tax.

End of example

The Medicare levy

Most working holiday makers are foreign resident taxpayers. Foreign resident taxpayers do not pay the Medicare levy.

If, given your circumstances, you determine that you are an Australian resident for tax purposes then you may be liable to pay the Medicare levy.

Australia has reciprocal health agreements with the following countries:

If you come from one of these countries and are an Australian resident for tax purposes you will be liable to pay the Medicare levy.

Example 6

Ian is a working holiday maker from the UK and his circumstances mean he is an Australian resident for the whole 2017-18 income year. Ian has no dependants.

He is liable to pay the Medicare levy as Australia has a reciprocal health agreement with the UK.

Ian earned a total of $40,000 in the 2017-18 income year.

Ian will be taxed at 15% on the first $37,000 he earned as a working holiday maker. The remaining $3,000 is taxed at 32.5%.

Ian's tax and Medicare levy would be calculated as follows:

Total tax on taxable income

Medicare levy on taxable income

In total, Ian pays $6,525 + $800 = $7,325 tax

End of example

Departing Australia Superannuation Payments (DASP)

Employers are required to make super contributions on behalf of their eligible employees to fund retirement.

If you worked and earned super as a working holiday maker, your super will be taxed at 65% when it is paid to you. This DASP tax rate for working holiday makers is effective from 1 July 2017.

You can apply for the DASP after you leave Australia if you meet all requirements.

See also:

Going overseas

If you remain an Australian resident overseas:

If your residency status changes, your tax situation will change in a number of ways.

Find out about:

Lodging your tax return

If you remain an Australian resident, you must lodge an Australian tax return and declare your worldwide income. You can lodge your return online from overseas.

Find out about:

How residency affects your tax return

On this page:

If you remain an Australian resident

You will generally remain an Australian resident for tax purposes if:

You must lodge an Australian tax return and declare your worldwide income – both assessable income and exempt foreign employment income – even if tax was taken out in the country where you earned the income.

To understand your tax situation, you first need to work out if you are an Australian or foreign resident for tax purposes.

Next steps:

If you become a foreign resident

You will need to lodge a tax return if you have Australian income, including:

The capital gain on your Australian home may need to be included if you are a foreign resident at the time you sign the contract of sale.

You can ignore any income from which non-resident withholding tax has been deducted, such as bank interest and unfranked dividends.

If you have a Higher Education Loan Program (HELP) or Trade Support Loan (TSL) debt and you're a non-resident for tax purposes – you'll need to declare your worldwide income or lodge a non-lodgment advice. You can do this using our online services via myGov or through a registered Australian tax agent from 1 July 2017.

Note: Your worldwide income may include income that we've asked you to ignore for determining your income tax obligations.

If you are leaving Australia permanently you will become a foreign resident.

See also:

If your residency status changes

If your status has changed from resident to foreign resident during the income year, answer 'yes' to the question 'Are you an Australian resident?' on your tax return.

This ensures you are taxed at resident rates for the income year. You are entitled to a pro-rata tax-free threshold for the number of months you are an Australian resident.

To claim a tax offset for a dependent spouse, you must both be Australian residents for tax purposes. You will need to reduce your claim to take into account the period you were both foreign residents.

Foreign residents do not have to pay the Medicare levy. In your tax return you can claim the number of days in the income year that you are not an Australian resident as exempt days.

From the date you cease to be an Australian resident, there is no need to show your foreign-source income in your tax return. Also, all Australian-sourced interest, dividends and royalties you received after you ceased to be an Australian resident are subject to the withholding tax provisions as a final tax. They should not be included in your tax return.

If you have a HELP or TSL debt you'll need to include these amounts as they are used to work out your worldwide income and your repayment obligations against these debts.

See also:

Lodging your tax return early

If you're leaving Australia before the end of the income year (30 June), you may be able to lodge your tax return early.

Eligibility to lodge an early tax return

We only accept early lodgment of tax returns for individuals before the end of the income year if you are either:

Lodge your tax return during the normal lodgment period (1 July to 31 October) if you:

See also:

How to lodge an early tax return

If you meet the eligibility requirements outlined above, you will need to:

Our service standard for processing early lodgments is 50 business days.

Your assessment will be sent to the postal address you write on your tax return.

If you are suffering from financial hardship, you may qualify for priority processing.

See also:

Lodging your tax return from outside Australia

If you'll be overseas during the lodgment period, but continue to be an Australian resident for tax purposes, you should lodge your tax return online.

Or you can:

Australian Taxation Office
GPO Box 9845
SYDNEY NSW 2001
AUSTRALIA

Note: You will need an Australian bank account to lodge online.

Working overseas

Australian residents working overseas must declare all foreign employment income – even if tax was taken out in the country where it was earned.

Find out about:

Claiming a foreign income tax offset

If you’ve paid foreign tax on employment income or capital gains in another country, you may be entitled to an Australian foreign income tax offset.

To be entitled to an offset:

Differences between the Australian and foreign tax systems may mean you pay foreign income tax in a different income year from the year that the income or gain is included in your assessable income for Australian income tax purposes. But you can claim the offset only after you’ve paid the foreign tax.

See also:

Allowances and lump sum payments

Some allowances and lump sum payments may be taxable, including living away from home allowance paid by your employer.

Some allowances are subject to fringe benefits tax (FBT). Ask your Australian employer whether it applies to your allowance.

If an allowance is:

If you received a lump sum payment from a foreign resident superannuation fund, the payment may be taxable. If the payment is not taxable, it may still be taken into account to work out the amount of tax you have to pay on your other income.

To check if your lump sum payment from a foreign super fund is taxable, call us on 13 10 20.

Double superannuation coverage

Double superannuation coverage occurs when you are sent to work temporarily in another country and either you or your employer is required to make superannuation (or equivalent) contributions under the legislation of both countries for the same work.

We have agreements with other countries to prevent this happening. Your employer can get a 'certificate of coverage' from us before you leave Australia to give your overseas employer as proof you're covered in Australia and are therefore exempt from compulsory contributions in the other country.

See also:

Trustees of a self-managed super fund

If you are a trustee of a self-managed super fund (SMSF) and you intend to work overseas for an extended period, check before you leave that your fund will continue to meet the definition of an Australian super fund.

Reporting your foreign employment income

You must report all your foreign employment income in your Australian tax return – both assessable income and exempt income. You must do this even if tax was taken out in the country where you earned the income.

Foreign employment income is income earned by an Australian resident working overseas as an employee. It includes salary, wages, commissions, bonuses and allowances. It may be paid by an overseas or an Australian employer.

Exempt income

You may be exempt from paying tax on your foreign employment income if you're: a member of an:

You must still report this exempt income in your tax return.

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Tax withheld

Your Australian employer must withhold tax from non-exempt foreign employment income if they continue to pay you while you’re overseas.

If your foreign employer is not registered for Australian PAYG withholding, it's unlikely that they'll withhold any amounts for Australian tax purposes from payments to you. You'll have to report your total earnings in your Australian tax return.

Reporting foreign tax

If you’ve paid foreign tax on your overseas income and it’s not exempt foreign employment income, you add the foreign tax back to your net employment income (this is called grossing up) to determine the assessable amount.

Include the income in your tax return as 'Assessable foreign income'.

Example

Lachlan was employed in a foreign country from 15 October 2017 until 23 April 2018. He earned A$11,250 after he paid A$3,750 in foreign tax. He could claim a deduction of $A500 for work-related expenses.

After adding back the foreign taxes, Lachlan would have assessable foreign income of A$15,000. After claiming a deduction for his expenses, he would have net foreign employment income of A$14,500.

End of example

You may be able to claim a foreign income tax offset for the tax you’ve already paid.

In your tax return, convert all amounts into Australian dollars.

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When you leave Australia

On this page:

Capital gains on your assets

If you leave your home in Australia temporarily and rent it out, you can continue to treat it as your main residence for up to six years for capital gains tax (CGT) purposes. If you don’t rent out your vacated home, you can treat it as your main residence for an unlimited period.

If you cease to be an Australian resident and decide to sell your home in Australia you may be liable to CGT.

If you cease to be an Australian resident while overseas, we deem some of your assets – generally those not considered taxable Australian property – to have been disposed of for CGT purposes. This may mean you become liable to pay CGT.

You can choose not to have this deemed disposal apply. But if you do eventually dispose of the asset, we take into account the whole period of ownership – including any period when you're not an Australian resident – when we calculate a gain or loss for CGT purposes.

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Cancelling private health insurance

The Medicare levy surcharge applies to Australian residents who have incomes above the surcharge thresholds and do not have an appropriate level of private patient hospital cover.

So, if you cancel your private health insurance while travelling overseas, you may be liable for the Medicare levy surcharge if your income exceeds the relevant threshold.

You should contact your health fund to work out the amount of premium you expect to save by cancelling or suspending your cover. Compare it to the surcharge you may have to pay.

Family cover

You and all your family dependants must have private patient hospital cover to avoid paying the surcharge. Cancelling or suspending cover for yourself will mean you and your spouse may each still be liable for the surcharge if your combined income for the purposes of the surcharge exceeds the family surcharge threshold.

Travel health insurance

Travel insurance is not private patient hospital cover for the purposes of the Medicare levy surcharge. Private patient hospital cover does not include cover provided by an overseas fund.

Exempt foreign employment income and the surcharge thresholds

Although your foreign employment income may be exempt from tax, we still take it into account when we determine your taxable income for the purposes of the Medicare levy surcharge.

Example:

John is single and an Australian resident. In 2017-18, he has:

John's income, for the purposes of the Medicare levy surcharge, is $95,000. As this falls in the income range of $90,000 – $105,000 for a single person, he is liable for the Medicare levy surcharge of 1.0%.

The surcharge is 1% of $20,000 (his taxable income), which equals $200.

End of example

Higher education and trade support loans

From 1 January 2016, if you have moved overseas and have a Higher Education Loan Programme (HELP) or Trade Support Loan (TSL) debt, you will have the same repayment obligations as those who live in Australia. This applies if you already live or intend to move overseas for a total of more than six months in any 12-month period.

You will need to update your contact details using our online services via myGov. You will also be required to make compulsory repayments towards your debt from 1 July 2017.

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Your super

If you are an Australian citizen or permanent resident heading overseas, your super remains subject to the same rules, even if you are leaving Australia permanently. This means you cannot access your super until you reach preservation age and retire, or satisfy another condition of release.

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You should check your super regularly and combine any accounts you no longer need. You can do this through our online services, accessible via myGov. Combining multiple super accounts means you don't have to pay multiple sets of fees and charges.

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If you have a small super account that you want to keep with your super fund, contact your super fund and tell them. This will prevent it from being transferred to us as unclaimed super.

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If you are planning on moving permanently or indefinitely to New Zealand, you can leave your super in Australia or transfer it to a New Zealand KiwiSaver scheme from a participating Australian super fund.

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Self-managed super

If you are a trustee of a self-managed super fund and you intend to travel overseas for an extended period, check before you leave that your fund will continue to meet the definition of an Australian super fund.

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International tax for individuals

Australian residents are generally taxed on their worldwide income from all sources. Temporary residents of Australia and foreign residents are generally taxed only on their Australian-sourced income, such as money they earn working in Australia.

To understand your tax situation you first need to work out if you are an Australian or foreign resident for tax purposes. This may be different to your residency status for other purposes – for example, you could be an Australian resident for tax purposes even if you're not an Australian citizen or permanent resident.

Next step:

Find out about:

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Investing in Australia

Foreign residents are taxed in Australia on income earned from their Australian investments.

For interest, unfranked dividends and royalties, tax is generally withheld in Australia at the time of payment. But if you receive rental income from Australian properties or capital gains from selling Australian assets, you must declare these amounts in an Australian tax return.

Find out about:

Interest, unfranked dividends and royalties

If you are a foreign resident, tax is generally withheld in Australia from interest, unfranked dividends and royalties you earn in Australia.

You advise the Australian financial institution – your payer – that you are a foreign resident and they withhold tax in Australia at the time of payment. You won't need to declare this income in an Australian tax return. Your payer should withhold tax at the following rates:

Tax rates for foreign residents

Tax rate for

Treaty countries

Non-treaty countries

Interest

Some agreements provide an exemption from withholding tax in certain circumstances.

10%

Unfranked dividends

Most agreements reduce the rate to 15%.

30%

Royalties

Most agreements reduce the rate to 15%.

30%

Note: The full list of our tax treaties is maintained by Treasury and can be found at Australian tax treatiesExternal Link.

Tell your Australian payer your current overseas address so they can withhold the right rate of tax. If you don't, they may withhold tax at the higher rate of 47% (from 1 July 2017).

Certificates of payment

If you need proof of payment of withholding tax to comply with the tax requirements of your own country, you can ask your payer to ask us for a certificate of payment.

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Owning real property in Australia

If you receive rental income from an Australian property, you must declare the income in an Australian tax return.

If you sell an Australian property, you must report the sale in an Australian tax return and pay capital gains tax on any profit.

Find out about:

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Foreign Investment Review Board approval

If you are a foreign personExternal Link (including temporary residentExternal Link or foreign non-residentExternal Link) you cannot buy an established residential dwelling in Australia, either directly in your name or through a trust relationship or company structure. Penalties apply for breaching this rule.

You can buy other types of Australian residential property, such as new dwellings, vacant land and residential property for redevelopment. To do this you must first get approval from the Foreign Investment Review Board.

If you are a temporary resident you can buy an established dwelling if you use it as your residence in Australia and get approval from the Foreign Investment Review Board.

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Residential real estate applications

To apply to purchase residential real estate you will need to complete a Residential real estate application.

Residential real estate includes:

To apply you will need to pay a fee. The fees apply for each application and the amount is determined by the value of the property.

Exemption certificate

An exemption certificate allows you to purchase one unspecified property within a six-month period without having to apply for individual approval for each property you are interested in. Use the Residential real estate application form to apply for an exemption certificate.

Foreign persons can use an exemption certificate to purchase a new dwelling or a single block of vacant land.

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Fee waiver

There are limited circumstances where a fee waiver or remittance will be granted and each will be determined on a case-by-case basis. Fees generally won't be waived or remitted following an unsuccessful attempt to purchase property or if there has been a change of mind to invest in the targeted property.

If you wish to apply for a fee waiver, you will need to submit a fee waiver form and attach relevant documents to support your claim. Fee waivers will not be considered before an application has been submitted.

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Getting a tax file number and lodging a tax return

If you are a foreign resident and acquire an interest in Australian real property:

If you're a foreign owner of a residential dwelling you may be required to lodge an annual vacancy fee return to report on the residential use of your property.

Next steps:

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Renting or leasing property

Any rental or lease payments for your Australian property must be declared as income in an Australian tax return, whether or not the payments are actually paid to you.

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Disposing of Australian property

If you sell (or otherwise dispose of) an interest in taxable Australian property, you must report it in an Australian tax return and pay capital gains tax on any profit.

'Taxable Australian property' includes houses, apartments and commercial buildings.

Your interest in the property may be:

In the year you dispose of your interest in a property, you need to work out your net capital gain or capital loss and report it in an Australian tax return. If you have made a capital gain you will pay tax on the gain.

We undertake compliance action, including data matching with overseas and Australian financial institutions and property records, to identify foreign residents that have not declared income and paid their tax obligations.

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Off-the-plan properties

An off-the-plan purchase occurs when you enter into a contract to purchase new residential taxable Australian property, before the construction is completed. At this stage you are purchasing a contractual right to have the premises built.

If you dispose of this contractual right before the construction is completed, you will have a capital gains tax obligation.

Property developers

If you build new residential premises for sale, you will be liable for GST on the sale and entitled to claim GST credits for related purchases. GST does not apply to the sale of existing residential premises.

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Commercial premises and GST

Commercial premises are things like shops, factories and offices.

If you buy, sell, lease or rent commercial premises, you may be liable to pay goods and services tax (GST) and entitled to claim GST credits for related purchases.

Most residential accommodation is exempt from GST.

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Capital gains on Australian assets

A capital gain is the difference between what it cost you to get an asset and what you got when you sold or otherwise disposed of it.

If you’re a foreign or temporary resident and you make a capital gain when you dispose of 'taxable Australian property', you may have to pay capital gains tax (CGT).

Taxable Australian property includes:

Taxable Australian property also includes an option or right over one of the above.

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Investing overseas

As an Australian resident, you are taxed on your worldwide income, including foreign income from:

You must declare income from all sources in your Australian tax return. If you have paid tax on any of this income in another country, you can claim a foreign income tax offset in Australia.

For a summary on income derived from overseas, download Foreign income (PDF, 642KB)This link will download a file.

Foreign income

Income from employment and personal services

If you have worked overseas or provided services to an organisation located outside of Australia, you will need to declare all relevant income, as if it were earned in Australia. This may include:

There are some specific circumstances in which the foreign salary is exempt, see Exempt foreign employment income.

Income from assets and investments

If you own assets or investments overseas you will need to declare all relevant returns as if they were in Australia. This may include:

Find out about:

Capital gains on overseas assets

If you own an asset overseas, you may have to pay Australian tax when you sell the asset. You need to keep appropriate records.

If you acquired an overseas asset before you became an Australian resident, you are taken to have acquired the asset at the time you became a resident.

Similarly, if you stop being an Australian resident while holding an overseas asset, you are deemed to have disposed of that asset at the time you stop being a resident.

To accurately calculate the capital gain or loss, ensure you keep a record of the value of your asset at these times. This is a complex area of tax law and exemptions may apply.

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What you need to remember

Tax paid on income overseas

If you have already paid tax in the country that you have derived the income from, you may be able to claim a foreign income tax offset credit.

To be eligible for a foreign income tax offset credit you must:

The offset amount you are entitled to will not always be the same amount of the tax paid overseas. If you are claiming more than $1,000 you will first need to work out your foreign income tax offset limit to determine your entitlement.

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Convert foreign income to Australian dollars

You must convert all foreign income, deductions and tax offsets to Australian dollars in your tax return.

Depending on your circumstances and the type of income, you will need to use either the:

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Apportion foreign income

Unlike Australia, most countries align their income year to the calendar year ending 31 December. You may need to report foreign income amounts and associated tax offsets that you receive across multiple tax returns in Australia.

You will need to determine which tax years the amounts align to and apportion them accordingly.

Interests in foreign entities

If you have interests in a foreign company, trust or life insurance policy, include income you receive from them in your tax return. This income can be attributed to you even if it hasn't yet been distributed.

Example: Investing overseas

Jenny is an Australian executive in a large corporation that is based in Hong Kong but also operates in Australia. She buys shares in the parent company because she's confident about the company's prospects.

Jenny regularly travels to Hong Kong for work and, after making the investment, she opens a bank account there. She intends to use any future dividends as additional spending money during her trips to the country.

In her next tax return, Jenny fails to include a HKD $6460 (AUD $1000) dividend she received. It is her first overseas investment and she is not familiar with the reporting obligations.

Later that year, Jenny discovers that she must declare all dividends and interest from overseas. She calls the ATO and asks for her tax return to be amended to include the income amount she left out. After she explains that she didn't intentionally omit the overseas income, we decide to waive the penalty amount. But she still must pay interest charges.

End of example

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Rental income from overseas property

You must include rental income from overseas properties in your Australian tax return.

This income is the full amount of rent and associated payments you receive or become entitled to when you rent out your property. It doesn't matter whether it's paid to you or your agent.

If you receive associated payments in the form of goods and services, you’ll need to work out their monetary value for your Australian tax return.

Your rental income includes any assessable amounts you receive relating to limited recourse debt arrangements involving your rental property.

If you have paid tax in another country on your rental income, you can claim a foreign income tax offset in your Australian tax return.

Example: Moving to Australia

Feng and his family will move from Singapore to Australia permanently under an employer-sponsored arrangement. Feng and his wife Min have a joint bank account in Singapore which they have decided not to close. They will also rent out their apartment in Singapore. The rental income is deposited into the locally held account.

Feng and Min visit a tax agent – Sandra – before the end of the financial year. Sandra asks them about their earnings and assets. Feng tells her about the rental property and offshore bank account. When preparing the couple's tax returns Sandra includes the rental income they received from the apartment in Singapore under the foreign source income label. She also lists each spouse's share of bank interest (that is, 50%) from the joint account.

Feng and Min already paid tax on the rental income in Singapore. There is a double taxation agreement in place between Singapore and Australia, and they are able to claim a tax offset on the tax already paid in Singapore.

End of example

Note:

For your property located overseas, special rules apply to the deductibility of rental property expenses that can be claimed against your foreign rental income.

For more information on foreign source income and the special rules that apply to the deductibility of rental property expenses, see Question 20 and D15 Other deductions in the Individuals Supplementary tax return instructions. If you are unsure of your obligations, contact your recognised tax adviser or us.

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Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.

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