Tax in Australia for Expats
Last updated: 20 October 2015
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We have prepared this overview of tax in Australia for expats primarily as a guide for British expats. Some of the information will also be relevant for expats of other nations as well, however it is not a substitute for professional advice about your tax in Australia commitments and therefore this guide should not be used to make any financial decisions.
If you need further advice or information, we can help. Simply enter your details using the form and we will arrange for a Australian tax accountant with experience assisting expats to contact you to assist with any questions you have.
An introduction to tax in Australia
Australia is one of the most popular destinations for expats around the world. It is estimated that there are currently over 1m British expats living in Australia.
Understanding the tax requirements in Australia as an expat is essential to ensure that you are paying the correct amount of tax in Australia. As a British expat, you may also be liable to pay tax in the UK, which we will also cover in this guide.
Unlike in the UK, the Australian tax system can be daunting for expats, especially when you first arrive.
Australian tax deadlines
The financial year in Australia runs from 1st July to 30th June the following year. Residents in Australia and those with tax owed in Australia are required to complete a tax return. If you are completing a tax return without the assistance of a registered agent, the deadline for completing your Australian tax return is (normally) 31st October, or the first subsequent Monday. In 2015, the deadline is the 2nd November because the 31st October falls on a Saturday.
If you are completing your tax return through a registered agent, your tax return does not have to be submitted until the end of April the following year. However, you will still need to notify the Australian authorities that you are using an agent to complete your tax return before the 31st October deadline to avoid any penalties.
Tax residence status in Australia
The Australian tax system has two residence status which expats need to be aware, Australian resident for tax purposes and foreign resident. Regardless of your residence status, you will be required to complete a tax return.
You will typically be deemed as an Australian resident for tax purposes if you have been resident in Australia for six months or more. However, there are other factors involved which will help determine your Australian tax residence status, and you should always seek advice on understanding your tax status in Australia.
If you are deemed to be an Australian resident, your worldwide income (including capital gains) will be subject to tax in Australia. If, however, you are deemed to be a foreign resident, only the income earned in Australia will be subject to Australian tax.
Personal tax allowance in Australia
For Australian tax residents there is also a personal allowance which means that the first $18,200 of your income will not be taxed.
For foreign residents there is no personal tax allowance which means that all income generated in Australia will be subject to Australian tax.
Australian tax treaties
A tax treaty is an agreement between two countries which sets out a number of rules surrounding the treatment of tax for individuals and companies subject to tax in those jurisdictions.
In most cases, where a tax treaty exists, an individual’s income will not be subject to tax in both countries. There is a tax treaty between the UK and Australia.
If you are considered to be an Australian tax resident, the tax authorities in Australia will apply tax to your gross worldwide income, before considering a tax credit for UK tax already paid on the same income, once you have supplied sufficient evidence of UK tax payments.
As the tax treaty is not automatically, applied you should always seek professional advice to ensure you are not being unnecessarily taxed twice.
Request free Australian tax consultation
Whether you are moving to Australia, or are already an expat living in Australia we have a network of advisers and accountants who can help with your tax in both the UK and Australia.
Enter your details using the form on this page and we will arrange for you to have an initial free consultation with a qualified adviser who will be able to discuss your situation in full.
If you need further assistance, such as completing a tax return or advice about how to tax efficiently structure your finances, the adviser will be able to explain what is entailed and provide a no-obligation quote for you.