If you are an Australian resident for tax purposes, you are taxed on your worldwide income which includes all foreign sourced income. You may be entitled to foreign tax credits if this income has been taxed in another country.
If you are deemed a non-resident during the year, you are required to report only your Australian-sourced income on your Australian tax return and pay tax at the non-resident rates.
Determining your tax residency status can be tricky and a number of factors can come into the determination of your status. The ATO has developed tools for assisting in this process.
Coming to Australia – Determination of Residency
Leaving Australia – Determination of Residency
The ATO consider four tests in helping to determine your status. They look at the:
- Resides test
- Domicile test
- 183-day test
- Superannuation test
More often than not, examples can help you decide what your situation may be deemed as. In some cases, a private ruling may be required to be 100% sure of what the ATO would determine.
Ellco Group is more than happy to assist you in determining your Residency status and preparing any documentation required to submit a tax ruling.