Moving Overseas? Will You Be Tax Resident or Not?

Australians have always had a worldly view, and this may be due to the impact of early settlers or the fact that this continent is certainly quite removed from other population centres. Be that as it may, you may be thinking about departing these shores as you pursue a work opportunity in a distant land. If so, you've got a lot to think about as you adjust to a different culture or language. However, you also need to be very careful when you think about your tax affairs. The long arm of the ATO can definitely reach overseas and if you're not adequately prepared, you may get an unwelcome tax bill at some stage in the future. Why do you need to do a careful analysis before you head to the airport?

Are You a Resident?

As you may know, Australian citizens are usually taxed on their worldwide income, no matter whether they bring the associated money back into the country or not. Much will depend, however, on whether the individual is categorised as a tax resident of the country and you will need to figure this out before you go much further. If you are a tax resident, then you need to account to the ATO for all your overseas income, even though it may be subject to a dual taxation policy.

Are You a Non-Resident?

On the other hand, if you are a non-resident for tax purposes, then you may only need to account for income that was sourced within Australia. For example, this could be linked to rental profits related to a property that you may continue to own "back home."

To become non-resident, you need to prove that you have established permanent residency outside the country and by doing this, will need to adjust your domicile status. At the same time, you need to have a close look at your internal ties, to figure out whether you're still closely linked to Australia and therefore, categorised as a resident in any case.

Professional Advice is a Must

Certainly, you will find it very difficult to adjust your status in retrospect, if you're presented with a bill that landed out of the blue. It's far better for you to talk with tax advisers who will have experience in international affairs, so you get the right information ahead of time.

What's the Right Decision?

Tax liability can be significant and may well have a bearing on your decision. It's better to be armed with all the data now and not be sorry that you made the move in the first place. You should contact local accountants for further tax advice.