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.

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