Tax Residency

Written By Yan Fu

When it comes to tax residency, many migrants are confused about its definition. Tax residency does not depend on your citizenship. ATO provides four tests to determine your residency.

The four tests are:

  • Resides test

  • Domicile test

  • 183 day test

  • The Commonwealth superannuation test

For people migrating to Australia, the relevant test is the reside test.

Today we will look at reside test only. If you meet the reside test, you don’t need to apply any other tests.

To satisfy reside test, ATO will examine your situation to determine your tax residency. Some major factors ATO will consider are:

  • period of physical presence in Australia

  • intention or purpose of presence in Australia

  • behaviour while in Australia

  • family/business/employment ties

  • maintenance and location of assets

  • social and living arrangement

The following are general rule of thumb. Each person’s situation is different. The final residency will depend on the overall situation.

For people enrolled to study in Australia in a course that lasts for six months or more, you are most likely be regarded as tax resident.

For people coming into Australia on a pre arranged long term employment (ie.1 or 2 years contract), you are most likely be regarded as tax resident.

For people on a working holiday visa, you are most likely be regarded as non tax resident.

If you need clarification with regard to your residency, please contact us.

Yan Fu