Who is a Tax Resident in Australia?
Australia determines tax residency based on a number of factors, including the resides test, domicile test, and whether you spend more than 183 days in a year in Australia. If you meet any of these, you may be an Australian resident for tax purposes. Your residency status impacts what income you need to report.
Foreign Income & Obligations for Non-Residents or Temporary Residents
If you are a non-resident or temporary resident, different rules apply:
- Temporary residents are generally exempt from tax on most foreign-source income, with some exceptions. (ato.gov.au)
- If you hold a temporary visa, and meet specific visa and spouse criteria, check whether section 768-910 of the Income Tax Assessment Act applies, which defines much foreign income as non-assessable non-exempt. (ato.gov.au)
Foreign Income Reporting in MyTax 2025
For those who are part-year residents or foreign residents with debt liabilities (HELP, VSL, AASL):
- You must report non-resident foreign-sourced income in the Non-Resident Foreign Income section. (ato.gov.au)
- If you were foreign resident for only a portion of the year, split your reporting: Australian income during residency, foreign income during non-residency. (ato.gov.au)
- Choose the most advantageous income assessment method: simple self-assessment, comprehensive tax-based, or overseas assessed, depending on your allowances and deductions. (ato.gov.au)
Practical Example
Sarah is a web‐designer, lived in Australia four months, then travelled and worked remotely overseas for eight months, still an Australian tax resident. She has a HELP debt, foreign income from clients overseas, and bank interest abroad. She should:
- Report Australian income while living in Australia, foreign income earned when overseas.
- Use the “comprehensive tax-based assessment method” if she holds deductibles (internet, travel, home office) incurred while abroad. These may reduce her assessable foreign income.
- Report in MyTax’s Non-Resident Foreign Income section; convert amounts to AUD using average annual exchange rates. (ato.gov.au)
Reporting & Compliance Tips
- Maintain robust records: invoices, contracts, receipts in foreign currency, time spent in and out of Australia.
- Track visa status, location per day – helps determine residency accurately.
- Check eligibility for foreign tax credits or treaty benefits if income taxed overseas.
- Be mindful of state taxes and superannuation obligations if doing contracted work from Australia.
Digital nomads should treat tax residency as a spectrum; knowing where you fall helps minimize double reporting and maximize available deductions. Seek professional advice if your situation involves multiple jurisdictions or large foreign income.