Does Being Stuck in Australia Due To Covid-19 Affect My Tax Residency?

Does Being Stuck in Australia Due To Covid-19 Affect My Expat Tax Residency? – so many citizens are stuck in a country that is not either their country of residence or citizenship due to borders closing thanks to the outbreak of the Covid-19 virus.

If we see this ban on travel extended the topic of expat tax residency has a number of expats concerned, especially those Australian expats stuck in Australia.

On the 20th of March the Australian Taxation Office released updated guidance on how it will approach the tax implications for those Australian expats stuck in Australia.


Expat Tax Residency Status


They have confirmed that for those individuals who are in Australia temporarily for some weeks or months due to the lock down of ports and airports then they will not become an Australian resident for tax purposes provided that they:

  • Usually live overseas permanently
  • Intend to return there as soon as they are able to

The tax obligations of Australian expats in Australia temporarily will generally remain unchanged and they will:

  • Not be assessed on income from a foreign source
  • Remain assessable ion income that was already from an Australian source


Employment Income


If an Australian expat is temporarily in Australia as a result of Covid-19, and continues to be paid employment income, the ATO confirmed that:

  • Paid leave – if the income that a Australian expat receives from their foreign employer while in Australia is paid leave (such as annual leave), they don’t consider this as Australian income and it would not be assessable in Australia.
  • Working remotely – If COVID-19 is the only reason why an Australian expat is working in Australia, and they were not intending to stay in Australia, but they have not been able to leave, the ATO accepts that working in Australia for less than three months will not result in them being assessed for Australian tax (regardless of whether their employer is Australian or foreign). As the situation is constantly evolving, the ATO will further consider this in coming weeks.


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