Resident vs Non Resident

Determining a taxpayer’s residency status is important as Australian tax residents are taxed on their world-wide income (Australian and overseas) where-as non-residents are only taxed on their Australian income.

Residency is a very complicated area and assistance can be gained by using the ATO’s Determination of Residency Tool or applying for a private ruling with the ATO.

The ATO normally treats the following taxpayers as Australian tax residents:

• If they have always lived in Australia.
• If they have migrated to Australia to live permanently.
• Been in Australia for more than six months and mainly had one job and worked at the one place.
• Come to Australia to study in a course of more than six months duration.
• Moved overseas for work purposes but have not set up a permanent home in another country.
• Actually been in Australia more than 183 days.

In contrast, the ATO normally treats the following taxpayers as foreign residents for tax purposes:

• Visiting Australia for more than six months, and for most of that time they were traveling and working in various locations around Australia.
• If they leave Australia permanently.