Working out your Tax Residency
In order to understand the tax obligations associated with your investments in Australia, the first step is to determine your residency status. It is important to remember that the standards used to determine your tax residency are different from those used by the Department of Immigration and Border Protection. For example, you may still be considered a resident for tax purposes even though you are not an Australian citizen or permanent resident.
You will generally be considered an Australian resident for tax purposes if you:
- Intend to migrate to Australia to live here permanently;
- Temporarily leave Australia and do not set up a permanent home in another country;
- Are an overseas student enrolled in a course that is longer than 6 months at an Australian institution; and
- Are visiting Australia for more than 6 months, living in the same place for most of the time and having established ties in the local community.
You will generally be considered a foreign resident for tax purposes if you:
- Leave Australia permanently;
- Are in Australia for a holiday or visiting for less than 6 months; and
- Are visiting Australia for more than 6 months and are spending the majority of your time travelling and working in various locations around Australia.
What are the tax implications of residency?
If you are considered a foreign resident for tax purposes you are required to declare any income you have earned in Australia (e.g. employment income, capital gains on assets etc.). You are not required to declare any foreign income on your Australian tax return.
If you are an Australian resident for tax purposes you are required to declare income you have earned in Australia as well as in other countries on your tax return.
If you require any further information or assistance in determining your residency status for tax purposes, please contact our team of tax lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.