Australia Tax

Q . How will I be taxed in Australia?

A. Liability to Australian tax will depend upon your residence status and the source of the income. Australian residents are subject to tax on worldwide income and capital gains. If you are non-resident then you will be liable for Australian income tax on Australian source income and on capital gains from the disposal of taxable Australian assets. If you are a temporary resident then you will be liable for Australian tax on your worldwide employment income, and Australian source income and capital gains from the disposal of taxable Australian assets.

Q. How is tax residence determined?

A. You will be a resident of Australia for taxation purposes where you satisfy any of the following tests:

·   You are considered domiciled in Australia, unless the tax authorities are satisfied that your permanent place of abode is outside Australia.

·   You have been in Australia for more than 183 days in the tax year, either continuously or intermittently, unless the tax authorities are satisfied that your usual place of abode is outside Australia and you have no intention of taking up residence in Australia.

· You are a member of a superannuation scheme established under the Superannuation Act 1990, or an eligible employee for the purposes of the Superannuation Act 1976 or the spouse or a child under 16 years of a person covered by either Act.

The question of whether you are a tax resident of Australia is a question of fact and circumstances. It is to be determined on a year-by-year basis by reference to the particular circumstances of each case.

The Commissioner has also issued a taxation ruling on the residency status of short-term visitors (two years or less) to Australia. The ruling has focused on the behavior of the visitor and whether the behavior is consistent with the person ‘residing’ there.

There are a number of factors which the tax authorities will consider. These include the following:

·   Intention or purposes of presence;

·   Family and business/employment ties;

·  Maintenance and location of assets; and

·   Social and living arrangements.

If you enter Australia on a pre-arranged employment contract for a period greater than six months, the position adopted by the Australian Taxation Office will generally regard you as a tax resident for the entire period of your stay. It should be noted that a period of less than six months might also be sufficient grounds for tax residency if your behavior is consistent with “residing” in Australia.

In addition, if you are considered a resident of Australia for tax purposes, you will be considered a temporary resident if you meet all of the following criteria;

·   You hold a temporary visa granted under the Migration Act

·   You are not an Australian resident within the meaning of the Social Security Act 1991

· You do not have a spouse who is an Australian citizen or permanent visa holder (includes the person you live together with on a genuine domestic basis even though you are not legally married).

Please note special rules apply to New Zealand nationals who were in Australia on 26 February 2001 on Special Category visas.

Q. What does ‘Domicile’ mean in Australia?

A. In Australia, a person’s domicile is, generally, the place considered to be your permanent home.  A domicile of origin is obtained at birth and a domicile of choice is obtained only when you make a conscious decision to change your domicile of origin.  For a place to be regarded as your domicile of choice, you must (1) actually reside in that place and (2) intend to remain there permanently or for an indefinite period.  If you are an expatriate in Australia and intend to stay there for a limited period you will almost invariably retain the domicile that you had before your arrival in Australia, however it is recommended you seek professional tax advice on arrival.

Q. Are there any regional or state taxes?

A. No. There are no municipal, provincial taxes in Australia.

Q. Can I file a joint tax return with my spouse?

A. No. Married persons are taxed separately, not jointly, on all types of income. Joint filing of returns by spouses is not permitted.

Q.   What rate of tax will I pay in Australia?

A. Total Tax Payable = (Taxable income x Tax rates) – rebates + Medicare Levy

Resident individuals (including temporary residents)
$ Taxable Income
$ Tax Payable

The following rates for 2016–17 apply from 1 July 2016.
Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $87,000 $3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000 $19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for each $1 over $180,000


The above rates do not include the:

  • Medicare levy of 2%
  • Temporary Budget Repair Levy; this levy is payable at a rate of 2% for taxable incomes over $180,000.