International Clients

Whether you need to lodge an Australian tax return depends primarily on your tax residency status, not your visa type. If the ATO considers you an Australian tax resident, you are required to lodge a tax return and declare your worldwide income, including income earned overseas. Residency for tax purposes is determined by a set of tests that consider factors such as how long you have been in Australia, whether you have a permanent place of abode here, and the nature of your ties to Australia and your home country. It is a separate determination from your immigration status, which means you can be a temporary visa holder and still be an Australian tax resident for tax purposes. Getting this determination wrong from the start can lead to significant underpayment of tax and penalties down the track. We help new arrivals and visa holders establish their residency status correctly from the moment they arrive.

If you are classified as an Australian tax resident, you are taxed on your worldwide income, meaning any salary, rental income, business profits, dividends, or capital gains earned overseas must be declared in your Australian tax return. Australia has double tax agreements with a number of countries, including the United Kingdom, the United States, New Zealand, Canada, Japan, and many others, which are designed to prevent you from being taxed twice on the same income. These agreements allocate taxing rights between the two countries and allow for foreign tax credits to offset Australian tax payable on income already taxed overseas. If you are a foreign resident for Australian tax purposes, you are generally only taxed on income sourced in Australia. Understanding which category applies to your situation and how it interacts with your home country tax obligations requires careful analysis that a specialist in international tax can provide.

A foreign company that carries on business in Australia may be treated as having a permanent establishment here, which triggers Australian corporate tax obligations. This means the Australian portion of profits generated by that permanent establishment is subject to Australian income tax at the corporate rate. The company will also need to register for GST if its Australian turnover exceeds $75,000, register with the Australian Securities and Investments Commission (ASIC) as a foreign company, and comply with Australian payroll, superannuation, and reporting obligations for any employees based here. Transfer pricing rules also apply to transactions between the Australian operation and related offshore entities, requiring those transactions to be priced at arm’s length. Failing to identify and meet these obligations early can result in penalties and back taxes. We help international businesses understand their Australian exposure and set up compliant structures from the outset.

When an Australian citizen or permanent resident who has been living overseas returns to Australia and re-establishes their tax residency, there are a number of tax implications to manage carefully. Any foreign assets held at the time of becoming an Australian tax resident again are subject to the deemed acquisition rules, which treat those assets as if they were acquired at their market value on the date residency recommences. This is important for calculating any future capital gains. Any income derived from overseas sources from that point forward must be declared in Australia. Superannuation considerations also arise, particularly if the returning expat has pension entitlements or retirement savings in another country. The timing of the return and the point at which Australian residency recommences can have a meaningful impact on the tax outcome, which is why advance planning with a specialist accountant before returning is strongly recommended.

Most employees working in Australia, including those on temporary work visas, are entitled to superannuation contributions under the Superannuation Guarantee. Employers are required to contribute a percentage of each eligible employee’s ordinary time earnings into a complying superannuation fund. This applies regardless of whether the employee intends to remain in Australia permanently. When a temporary visa holder permanently departs Australia, they may be eligible to claim their accumulated superannuation balance as a Departing Australia Superannuation Payment (DASP). This payment is subject to withholding tax at rates that vary depending on how the contributions were taxed. Citizens of countries with which Australia has a social security agreement may have different arrangements for how superannuation is treated. International employees and their employers both need to understand these obligations from the commencement of employment to ensure compliance and to plan effectively for the employee’s eventual departure.