Working overseas can result in a complex tax scenario, but seeking expert advice can keep you from paying up twice. The Australian Taxation Office's (ATO) main consideration when assessing income is whether or not you are considered to be an Australian resident for tax purposes.
So how does the ATO determine whether an individual is a resident for tax purposes? There are four tests, and failure to meet any one of these tests means that the ATO considers the person to be an Australian resident for tax purposes.
There are a number of tests the ATO use to determine this, however none are absolute. One test and a simple one is the residence test: if you live in Australia you are considered to be a resident for tax purposes.
Other is the domicile test: if your domicile is in Australia you are considered to be an Australian tax resident, unless the ATO is satisfied that you have a permanent home elsewhere.
And yet another is the 183-day test: if you live in Australia for more than half the income year - whether this time is broken up or not - you are considered to be an Australian resident for tax purposes.
As I said none are absolute however all are indicators, so if you are thinking of working overseas and would like to know the tax consequences, seek expert advice.