Do you need to complete an Australian tax return while living overseas? Many people I meet are confused by the requirements. It comes back to an all important question which I addressed in an earlier article Am I An Australian Resident For Tax Purposes? However, even if you are not an Australian resident for tax purposes, you may still need to complete an Australian tax return while living overseas.
Once you determine whether you are an Australian resident for tax purposes or not, you can then determine if you need to complete an Australian tax return while living overseas.
If you remain an Australian Resident For Tax Purposes, do you need to complete an Australian tax return while living overseas?
If you remain an Australian tax resident, you will need to continue to complete an Australian tax return.
You will need to declare all of your worldwide income from all sources (even if tax was taken out in the country in which you earned it). Your income from overseas may be taxed in both Australia and the country you are living or working in. You may however be entitled to an Australian foreign income tax offset, which means you may be able to reduce your tax liability on your foreign sourced income by the amount of tax you have already paid.
If you become a Non-Resident For Tax Purposes, Do you need to complete an Australian tax return while living overseas?
If you are a non-resident for tax purposes, then you are generally only taxed on your Australian-sourced income. The form that your Australian sourced income takes, will determine whether or not you need to complete an Australian tax return while living overseas.
You will only need to complete an Australian tax return if you have income in Australia that includes the following :
- Australian employment income
- Rental Income from Australian property
- Australian pensions or annuities (unless there is an exemption under a tax treaty or law)
- Capital Gains on Australian Assets.
You will not need to complete an Australian tax return if you are a non-resident for tax purposes and your only Australian-sourced income was interest, dividends, or royalties from which non-resident withholding tax has been correctly withheld. If withholding tax was not withheld from your interest or dividend payments, then you will need to complete a tax return.
If you are an Australian Expat, a non-resident for Australian tax purposes, and only have (at most) interest and dividend income in Australia, you can avoid completing an Australian tax return by doing the following :
- notify your Australian financial institution or bank that you are no longer a resident for Australian tax purposes, and they will deduct non-resident withholding tax from your interest payment
- notify any fund managers that you invest with or the share registries for any companies that you hold shares in that you are no longer a resident for Australian tax purposes. The share registries and fund managers will then ensure the correct application of the non-resident withholding tax.
Outstanding Higher Education and Trade Support Loans
In Australian Government Removes Tax Loophole For Australian Expats, I talked about new rules announced in the May 2015 budget that would require Australian Expats with an outstanding higher education or trade support loan to continue making repayments on their outstanding loan. Whilst having a higher education or trade support loan does not, in itself, require you to complete an Australian tax return you will need to advise the government of your global income. You can read more about your obligations here.
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Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way.
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Do you need to complete an Australian Tax Return while living overseas?
If you need to file a non-resident Australian tax return, or need tax planning advice as an Australian expat, contact GM Expat Tax using the form below. GM Expat Tax is a firm of accountants specialising in assisting Australian expats living and working around the world.