From the date of arrival into Australia, you will generally be regarded as a tax resident of Australia and be required to declare income from worldwide sources from this day forth. Where you are classified as a temporary resident, only Australian sourced income will be taxable in Australia. In the first year, your tax-free threshold will also be pro-rated based on the number of months you will be a resident of Australia for tax. All of your assets will be deemed to have been acquired for their market value as at the date of your arrival for capital gains tax purposes. Your foreign income may also be subject to income tax depending on the movement of the exchange from the date of arrival to the date of actual conversion
Australia has a 183-day rule with regards to determining whether you are a tax resident of Australia. However, there are also issues associated with one’s domicile which should also be considered.
Australian tax residents are subject to income tax on their worldwide income. Territorial tax only applies if you are classified as a temporary resident of Australia for tax purposes.
As an Australian tax resident you will be taxable on foreign income derived during the year.
No – Australia taxes foreign income as it accrues regardless of whether the income is remitted to Australia.
Australia has a consumption tax called the Goods and Services Tax (GST). The current rate of GST is 10%.
Yes – Capital gains tax applies in Australia on foreign assets for any capital growth arising from the date of commencement as an Australian tax resident to the date of disposal.
No – Australian does not currently have an estate or death tax.
The top marginal tax rate for individuals in Australia is 45% with an additional 2% Medicare Levy and 2% Temporary Budget Repair Levy. This top rate applies on taxable incomes greater than $180,000.
The income tax rate applies to all forms of income , however there may be rebates which apply which will reduce the tax payable.
You may claim a deduction for any payments made in relation to the generation of income. Common deductions associated to employment income include out-of-pocket expenses such as:
In Australia each taxpayer must file a personal return. However the joint incomes will be considered in determining eligibility to certain rebates.
In Australia, the Controlled Foreign Company (CFC) and Transferor Trust rules will apply to attribute income to you personally if you are considered to control the assets of a foreign company or trust.
Yes – Children who are not working or regarded as an Excepted person are taxed at a higher rate than adult individuals. There are also certain forms of income receipts (such as a distribution from a deceased estate) which are not subject to the higher rates of tax in the hands of a child.
No there is no gift tax in Australia, however when assets are gifted capital gains tax may be relevant.
Gifts and insurance payouts from overseas relations are generally not taxable in Australia.
Shares are regarded as payments in lieu of salary and wages and taxed at your marginal rate of tax in either the year they are granted or the year in which they vest (depending on the terms and conditions associated with the employee share scheme).
Australian sourced income will be subject to Australian withholding taxes. This is the cases regardless of whether payment of the termination amount is done before or after you leave the country.
As a resident of Australia, you will be deemed to have disposed of your non-real property assets for their market values on the date of disposal. This will give rise to a deemed capital gains tax event and an associated tax liability. However, you may choose to defer this taxation event to the point when you dispose of the asset in the future.
If you do not declare a capital gain on the assets in the year that you cease being a resident of Australia, it will be assumed by the Australian authorities that you have elected to defer the taxation point.
There are no tax consequences arising from the transfer of money back to your home country unless the source of funds is Australian income in which case there will generally be a tax liability.