Understanding Your Australian Tax Residency

If you’re moving to Australia, leaving the country, or spending time abroad, knowing your tax residency status is crucial. It determines which income you must declare, what deductions you can claim, and your overall tax obligations with the Australian Taxation Office (ATO).

Are You an Australian Resident for Tax Purposes?

The ATO uses several tests to determine residency:

1. Resides Test – Do you live in Australia? This looks at where you make your home and your lifestyle connections.
2. Domicile Test – Is your permanent home in Australia, even if you live overseas temporarily?
3. 183‑Day Test – Are you physically in Australia for more than 183 days in a financial year?
4. Superannuation Test – Does your superannuation make you a resident under government employment rules?

Moving to Australia

If you’re coming to live or work in Australia:

• You may become an Australian resident for tax purposes from the date you arrive.
• You’ll generally need to declare all your income, both from Australia and worldwide.
• Keep records of your arrival date, visa type, and accommodation to support your residency status if queried.

Leaving Australia

Planning to move overseas? Your tax residency may change:

• You might become a temporary resident, or a non‑resident for tax purposes, depending on your intentions, ties, and period abroad.
• Australian income tax may still apply to certain income sources (like Australian property, business income, or investments).
• Keep records of departure dates, travel itineraries, and overseas addresses to substantiate your residency status.

Why It Matters

Getting your tax residency right ensures:

• You pay the correct tax on worldwide income.
• You don’t miss out on deductions and offset available to residents.
• You avoid penalties or issues with the ATO due to misreporting income.

Key Takeaways

• Residency is about more than just where you live – it considers intention, lifestyle, and connections.
• Keep thorough documentation of travel, property, employment, and visa status.
• If unsure, seek professional advice — residency decisions can have long‑term tax consequences.

Source: www.ato.gov.au