Introduction - Australian Tax Advice
This section of Exfin provides introductory information tailored for Australians who are not tax residents, future migrants and working visitors regarding the Australian tax system, and prompt access to professional tax advice through our Inquiry forms.
While a tax resident of Australia individuals are taxed on their worldwide income at a maximum taxable rate of 46.5%. When they become non-resident for tax purposes they become liable only for tax on Australian sourced income - an approach which differs from that of some other countries, such as the US. Hence the importance of tax residency for Australians departing and returning to the country and why we provide some discussion of the various tests used to determine an individual's status. Residency is very dependent, however, on an individual's personal circumstances and you are strongly advised to seek professional advice if you have any doubts about your tax or residency status - preferably before you depart for overseas because your status can be affected by your overseas employment terms. This is particularly the case if you are going to be working in the Middle East, where most countries do not levy income tax.
Other areas of common concern to expatriates are the application of capital gains tax (CGT) in relation to property and assets in Australia, both on departure and whilst overseas, and how rental income from property is treated whilst overseas.
In our view, Australian expatriates should have a tax briefing with a professional advisor before leaving Australia and at least several months prior to their return. There are a considerable number of tax complexities and we cannot hope to address them all within the Exfin site - although we do provide some general background around the more common taxation issues and a page of tax FAQ's. Note that some relatively recent changes, particularly in the area of superannuation, where the Government has increased the attractiveness of superannuation but also limited annual contributions, means it is vital that you also plan your superannuation strategy since it may involve making contributions whilst overseas and prior to your return to Australia.
Most Australian tax advisors have a very domestic focus and it is important that you utilise tax advisors who are focussed and experienced on expat tax matters to ensure that you receive full and complete advice.