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Australian Tax Residency Rules To Change Affecting Australian Expats

Australian Tax Residency Rules To Change – The Australian Federal Government announced a change to the tax residency rules in the 2021 Australian Federal Budget.

The previous tax residency rules were outdated and in 2019 the Board of Taxation recommended a review of the old rules to bring them into line with how Australian expats live and work overseas.

As part of the budget announcement the Federal government will look to replace the existing tax residency rules with a new structure that comprises of a bright-line 183 day test:

  • Primary test – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident; and
  • Secondary tests – individuals who are not resident under the primary test are to have their residency determined based on a combination of physical presence and measurable, objective criteria.

Whilst the intention to move away from the existing complex residency tests is a good one, implementation of the secondary tests will be key to ensuring the simplicity of the primary test are not undone.

This measure will have effect from the first income year after the date of assent of the relevant legislation.

These changes will affect most Australian expats in one way or the other and we will be running through these changes in both our 2021 Australian Federal Budget Seminar or as well as the two online webinars that we will be running next week.

Make sure you register for either of sessions by clicking on the links above or below:

 

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