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Hmm, I seem to recall hearing Australians also have complicated rules about being an "Australian resident for tax purposes" that is not the same as an Australia

Hmm, I seem to recall hearing Australians also have complicated rules about being an "Australian resident for tax purposes" that is not the same as an Australian resident for other purposes, especially when you don't have Permanent Residence/Green Card and are on a time-limited visa (even if it's years long). So they don't technically fall into the "America and Eritrea" bad list, but still tax many Australians abroad. I forget the exact details though.

mythz 5y ago
This is untrue, if you're a citizen of Australia who is a non-resident you don't have to report or pay taxes on world wide income made outside of Australia.
- EE84M3i 5y ago
  There is an example[1] on their official site of an Australian living abroad in Japan and being a "resident for tax purposes" and thus being taxed, but not being a resident for other purposes. [1]: https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/In-detail/Residency/Examples-of-residents-and-foreign-residents/?=redirected_residencyexamples#EmilyteachinginJapan https://www.ato.gov.au/Individuals/coming-to-australia-or-go...
  - mythz 5y ago
    Right they're still classified as a resident since they're on a temporary contract who intended on returning after their contract has expired. If they had permanent residence in a different country they wouldn't need to.
    - EE84M3i 5y ago
      As far as I know, in most countries, acquiring permanent residence requires living in the country for years first and then applying, so you will be on time-limited visas until then. That is the way it is in Japan, and it is 10 years to get PR, in the general case. Anyway, I'm not an expert on Australian tax law by any means, I just wanted to note that it's not always so clear cut as "do other countries tax citizens living abroad".
      - tazjin 5y ago
        This confusion is common amongst people who haven't lived in abroad. Visa status, work permits, future intentions, work contracts and citizenships are all separate things and most countries weigh more than one factor to determine tax-residency. In this example, the operative bit is this: > She has a one-year contract, after which she plans to tour China, [...] This time-boxes her intentions for living abroad. It's distinct from having an unlimited work contract with a temporary visa that requires renewals, which indicates intent to stay abroad (and potentially a basis for the visa renewals). Other countries use things like a point system (UK), definitions of "centre of life" (Russia, where I live atm) and so on. Either way, Australia doesn't do the thing that the US & Eritrea do (tax applicability solely based on citizenship).
      - mythz 5y ago
        > As far as I know, in most countries, acquiring permanent residence requires living in the country for years first and then applying, so you will be on time-limited visas until then. I joined a US-based Company who organized my Green Card without me having ever been there. As long as your intention is to migrate to a different country you're regarded as a non-resident in which case you wont have to pay taxes on worldwide income, unlike in the US.
- BelenusMordred 5y ago
  The laws recently changed last month. If you spend more than 45 days in the country or tick two of the following dot points you are now considered a tax resident and need to pay income tax: * the right to reside permanently in Australia * Australian accommodation * Australian family * Australian economic interests. https://www.lexology.com/library/detail.aspx?g=a9c5000f-bde6-41e8-bea3-cb5eb16185fc https://www.lexology.com/library/detail.aspx?g=a9c5000f-bde6...
  - mythz 5y ago
    This sounds like proposed changes, I'm not seeing these rules reflected on ATO's guidance: https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/Your-tax-residency/Australian-resident-for-tax-purposes/ https://www.ato.gov.au/Individuals/coming-to-australia-or-go... This suggests it wont come into effect until 2022: > Since draft legislation is not yet available, the rules likely will not apply before 1 July 2022. https://www.taxathand.com/article/17653/Australia/2021/New-tax-rules-proposed-for-determining-tax-resident-status-for-individuals https://www.taxathand.com/article/17653/Australia/2021/New-t... > If you spend more than 45 days in the country or tick two of the following dot points The proposed secondary rules only applies after spending 45+ days in a FY, not OR. Which is important because this new criteria basically applies to most people born in Australia, so it basically reduces the 183 day test to 45.
  - Izikiel43 5y ago
    So, just by being australian and having family there you check box #1 and #3 automatically?
dbetteridge 5y ago
Not too bad really for us overseas Australians. If you took out a HECS (0% interest, indexed to inflation) loan for university study you still need to file taxes when resident overseas and continue making payments if you earn over the threshold. If you are resident in Australia more then 6mths of the year you must complete an Australian tax return, but for most people that involves logging in around september and checking that all the auto-fills match up with what they expected.
- vertis 5y ago
  You have to be able to prove you're a resident somewhere overseas though, and that you've broken your ties to Australia. It's more complicated for digital nomads that don't really have a permanent place overseas. Other than that though, agreed. AU taxation filing is not complicated.
- BelenusMordred 5y ago
  They only just changed the laws a month ago to make it so opaque and vague about who qualifies as a tax-resident or not. It's basically a "if we want we will tax you" situation. The 183 day rule means little if you have even something as innocuous as a bank account back home now. It's a ridiculously stricter change that is entirely open to interpretation by the ATO. https://www.mondaq.com/australia/income-tax/1070880/tax-residency-changes-in-the-wind https://www.mondaq.com/australia/income-tax/1070880/tax-resi...
  - vkou 5y ago
    What you are describing is a pretty common requirement. Canada has a similar requirement, and while a passive bank account would in itself not be considered 'ties' to the country, an active one that sees use might.
  - dbetteridge 5y ago
    Ugh, thats a headache of a read. Sounds like they're just 'recommended' for now but won't take effect till next tax year at least. Also sounds like its intended to catch people working 0% tax contracts in the middle east or digital nomading around east-asia till they need medical care. (still not a good reason to complicate things)
peteretep 5y ago
Many countries do, and losing your tax residency in a country of which you’re a citizen and have been recently resident is a pain — check out the UK statutory residency tests for example. That said, it _is_ possible to lose your tax residency in these countries, where American citizens are simply fucked.

mythz 5y ago

This is untrue, if you're a citizen of Australia who is a non-resident you don't have to report or pay taxes on world wide income made outside of Australia.

EE84M3i 5y ago
There is an example[1] on their official site of an Australian living abroad in Japan and being a "resident for tax purposes" and thus being taxed, but not being a resident for other purposes. [1]: https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/In-detail/Residency/Examples-of-residents-and-foreign-residents/?=redirected_residencyexamples#EmilyteachinginJapan https://www.ato.gov.au/Individuals/coming-to-australia-or-go...
- mythz 5y ago
  Right they're still classified as a resident since they're on a temporary contract who intended on returning after their contract has expired. If they had permanent residence in a different country they wouldn't need to.
  - EE84M3i 5y ago
    As far as I know, in most countries, acquiring permanent residence requires living in the country for years first and then applying, so you will be on time-limited visas until then. That is the way it is in Japan, and it is 10 years to get PR, in the general case. Anyway, I'm not an expert on Australian tax law by any means, I just wanted to note that it's not always so clear cut as "do other countries tax citizens living abroad".
    - tazjin 5y ago
      This confusion is common amongst people who haven't lived in abroad. Visa status, work permits, future intentions, work contracts and citizenships are all separate things and most countries weigh more than one factor to determine tax-residency. In this example, the operative bit is this: > She has a one-year contract, after which she plans to tour China, [...] This time-boxes her intentions for living abroad. It's distinct from having an unlimited work contract with a temporary visa that requires renewals, which indicates intent to stay abroad (and potentially a basis for the visa renewals). Other countries use things like a point system (UK), definitions of "centre of life" (Russia, where I live atm) and so on. Either way, Australia doesn't do the thing that the US & Eritrea do (tax applicability solely based on citizenship).
    - mythz 5y ago
      > As far as I know, in most countries, acquiring permanent residence requires living in the country for years first and then applying, so you will be on time-limited visas until then. I joined a US-based Company who organized my Green Card without me having ever been there. As long as your intention is to migrate to a different country you're regarded as a non-resident in which case you wont have to pay taxes on worldwide income, unlike in the US.
BelenusMordred 5y ago
The laws recently changed last month. If you spend more than 45 days in the country or tick two of the following dot points you are now considered a tax resident and need to pay income tax: * the right to reside permanently in Australia * Australian accommodation * Australian family * Australian economic interests. https://www.lexology.com/library/detail.aspx?g=a9c5000f-bde6-41e8-bea3-cb5eb16185fc https://www.lexology.com/library/detail.aspx?g=a9c5000f-bde6...
- mythz 5y ago
  This sounds like proposed changes, I'm not seeing these rules reflected on ATO's guidance: https://www.ato.gov.au/Individuals/coming-to-australia-or-going-overseas/Your-tax-residency/Australian-resident-for-tax-purposes/ https://www.ato.gov.au/Individuals/coming-to-australia-or-go... This suggests it wont come into effect until 2022: > Since draft legislation is not yet available, the rules likely will not apply before 1 July 2022. https://www.taxathand.com/article/17653/Australia/2021/New-tax-rules-proposed-for-determining-tax-resident-status-for-individuals https://www.taxathand.com/article/17653/Australia/2021/New-t... > If you spend more than 45 days in the country or tick two of the following dot points The proposed secondary rules only applies after spending 45+ days in a FY, not OR. Which is important because this new criteria basically applies to most people born in Australia, so it basically reduces the 183 day test to 45.
- Izikiel43 5y ago
  So, just by being australian and having family there you check box #1 and #3 automatically?

dbetteridge 5y ago

Not too bad really for us overseas Australians. If you took out a HECS (0% interest, indexed to inflation) loan for university study you still need to file taxes when resident overseas and continue making payments if you earn over the threshold. If you are resident in Australia more then 6mths of the year you must complete an Australian tax return, but for most people that involves logging in around september and checking that all the auto-fills match up with what they expected.

vertis 5y ago
You have to be able to prove you're a resident somewhere overseas though, and that you've broken your ties to Australia. It's more complicated for digital nomads that don't really have a permanent place overseas. Other than that though, agreed. AU taxation filing is not complicated.
BelenusMordred 5y ago
They only just changed the laws a month ago to make it so opaque and vague about who qualifies as a tax-resident or not. It's basically a "if we want we will tax you" situation. The 183 day rule means little if you have even something as innocuous as a bank account back home now. It's a ridiculously stricter change that is entirely open to interpretation by the ATO. https://www.mondaq.com/australia/income-tax/1070880/tax-residency-changes-in-the-wind https://www.mondaq.com/australia/income-tax/1070880/tax-resi...
- vkou 5y ago
  What you are describing is a pretty common requirement. Canada has a similar requirement, and while a passive bank account would in itself not be considered 'ties' to the country, an active one that sees use might.
- dbetteridge 5y ago
  Ugh, thats a headache of a read. Sounds like they're just 'recommended' for now but won't take effect till next tax year at least. Also sounds like its intended to catch people working 0% tax contracts in the middle east or digital nomading around east-asia till they need medical care. (still not a good reason to complicate things)

peteretep 5y ago

Many countries do, and losing your tax residency in a country of which you’re a citizen and have been recently resident is a pain — check out the UK statutory residency tests for example. That said, it _is_ possible to lose your tax residency in these countries, where American citizens are simply fucked.