Foreign Residence for Tax Purposes or Not?

You should first know that you are foreign resident for tax purposes or not?

This is because if you are Australian resident or domicile by law, you will be requiring pay tax on worldwide income with high ATO rates. 

On the other side, if you are Non-Residents in Australia, you only need to pay tax on earning  and sourced income from Australia only. Please note that you don’t need to pay tax on Worldwide income like citizens.

If you have a valid visa from the Department of Immigration and Border Protection and you lived for more than six months in the financial year and you live in Australia rather than another country, you just need to meet some criteria and requirement for eligibility. You should meet the 183 day test and you have to prove that you intend to live in Australia for permanently so you will not be considered a resident for tax purposes.

For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au

Foreign Income Tax Offset Rules

If you have foreign income, you must have to disclose it in your Australian income tax return.

If you have assessable income from overseas and also paid tax there, you may be eligible to get tax offsets. It means that you don’t need to pay double taxation.

These rules apply for income years that start on or after 1 July 2008. Different rules apply for income periods up to 30 June 2008 by ATO.

You can claim a tax offset for the foreign tax you have paid on income, profits or gains (including gains of a capital nature) that are included in your Australian assessable income. In some circumstances, the offset is subject to a limit.

You will get tax offsets if you:

  • You must have actually paid, or be deemed to have paid, an amount of foreign income tax
  • You need to disclose income or gain on which you deemed to paid overseas income tax must be considered as assessable income for ATO.

There is a difference between foreign tax and Australian tax system. You might need to paying overseas income tax for different from which you gain or loss in your income for Australian income tax.

You might have paid the foreign tax in an earlier or later income year. However, the offset can be applied after the foreign tax is paid. so, you might get tax credit and relief for double taxation system.

For more information on online tax return 2020, Tax Return 2020, myGov 2020, myTax 2020 or any other tax related matter, please call our professional accountant on 1300 768 284 or you can email us at enquiry@taxrefundonspot.com.au