Tax Laws

It sounds like such a simple question but determining whether you’re a resident of Australia for tax purposes of can be frustratingly difficult…and depending on the answer, the way you are taxed can change dramatically!

Why does it matter?

The law treats residents and non-residents differently. Australian residents are generally taxed on all of their worldwide income. Non-residents are taxed only on income sourced in Australia. The marginal tax rates are different for income below $37,000, and the effective tax rates are much higher for non-residents.

If you think you need help to work out if you are resident or not, QTAX can help you. Call us on 13000 4 QTAX.

Australian Residents

If you are an Australian resident and you have to lodge a tax return, you need to declare your worldwide income.

Non-Residents

If you are a non-resident, you only need to lodge a tax return if you have income that is taxable in Australia. From 1 January 2017, tourists working in Australia only for a short time are not considered residents and are subject to a special tax regime. Such working holidaymakers still need to lodge a tax return if they have income from an Australian source.

Advantages and Disadvantages

Non-residents do not pay the Medicare levy (and so cannot claim Medicare benefits), and will have 10% of any interest earned from Australian bank accounts withheld for tax. The interest is not included in assessable income, but you will need to provide an overseas address otherwise tax will be withheld at a much higher rate.

If you think you need help to work out if you are resident or not, QTAX can help you. Call us on 13000 4 QTAX.