Understanding tax residency is the first and most crucial step if you live abroad as an Australian. Your residency status with the ATO decides which income gets taxed, where, and on what basis.
What Is Tax Residency in Australia?
It’s legally determined by whether you “reside” in Australia — not just your visa or where your passport is from.
Key tests the ATO uses:
– Resides test — do you live in Australia? What are your ties?
– Domicile test — is your home (or permanent home) still in Australia?
– 183-day test — do you spend more than half the income year here?
– Superannuation test (if applicable).
Even if you spend less than 183 days, other factors like home, family, assets, intention matter.
Why It Matters for Aussies Abroad?
– If you are an Australian resident for tax purposes, you must declare worldwide income to the ATO.
– Non-residents often have to report only Australian-sourced income.
– Misunderstanding residency can lead to overpaying tax, missed reporting, or being hit with unexpected assessments.
Common Mistakes Australians Make?
-Assuming being overseas automatically makes you non-resident.
– Relying only on days spent, ignoring “ties.”
– Using a visa status as proof of non-residency (it isn’t).
– Not updating the ATO when your residence status changes.
Quick Aussie Tips:
– Keep a travel diary, proof of days in/out.
– Keep evidence of home, family, leases, bank accounts — anything that shows ties.
– Ask for a private binding ruling or ATO opinion if your situation is borderline.
Check out the Youtube video of this tip:
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An Australian expat → check the Australia Expat Tax Guide for superannuation rules. -
A Canadian expat → see the Canada Expat Tax Guide for RRSP and TFSA rules. -
For more insights, browse the full Expat Tax Tips & Insights.
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