Three Popular Expat Destinations for Australians, and the Tax Reality Behind the Postcard

The fantasy is intoxicating: swap the daily grind for souks, street food and a sea view, and start fresh somewhere that feels like a permanent holiday. And honestly? Sometimes it really is one of the best decisions a person ever makes. But the brochures never mention the bit that decides whether the dream is affordable or a slow-motion financial headache, which is tax. So let’s take three popular expat destinations for Australians, destinations that Australians genuinely love, Dubai, Vietnam and South Korea, and look at the tax reality sitting just behind the postcard.

One rule applies to all three, and to everywhere else on the planet, so let’s get it out of the way first. The single biggest factor in your tax outcome isn’t your destination. It’s your Australian tax residency. If you remain an Australian tax resident after you move, Australia generally still assesses you on your income from all sources, wherever you earn it. If you genuinely become a non-resident, Australia steps back to taxing mainly your Australian-source income. And here’s the myth worth strangling early: working remotely for an Australian employer doesn’t, by itself, decide any of this. Your residency is decided by Australia’s residency tests applied to your actual circumstances, not by whose name is on your payslip. Sort that out before you do anything else, which is why we have a whole guide on being an Australian resident for tax purposes. With that established, on to the three.

Dubai: tax-free, but read the fine print

Dubai, in the United Arab Emirates, has pulled in expats from everywhere over the past decade, and the headline attraction is real: the UAE levies no personal income tax. Earn a salary working for a local employer and you generally keep all of it, with no income tax taken out. For a high earner, that’s a genuinely powerful difference.

But “tax-free country, forget about tax” is exactly the sort of cheerful half-truth that lands Australians in strife, so here’s the fine print that actually matters. First, the UAE being tax-free only helps your overall position if you’ve genuinely ceased to be an Australian tax resident. If you’re still an Australian resident, that zero-tax salary is generally still assessable back in Australia, and you could find yourself paying full Australian tax on income you thought was tax-free. The destination’s zero rate doesn’t save you; your residency does. Second, and this is the part almost everyone misses: Australia does not have a tax treaty with the United Arab Emirates. That matters enormously, because a treaty is the thing that normally provides tie-breaker rules and double-tax relief between two countries. Without one, you don’t have that safety net, so getting your residency genuinely and cleanly sorted is even more critical here than in a treaty country. There’s no treaty to bail you out if you get it half-right.

So Dubai can be brilliant for the right person in the right circumstances, but it rewards careful residency planning and punishes the “she’ll be right, it’s tax-free” approach. (And yes, the rules on public behaviour and dress genuinely are stricter than Australia’s relaxed norms, so that part of the old advice still stands: read up before you fly.)

Vietnam: low cost of living, but it taxes residents properly

Vietnam has graduated from the backpacker trail to a serious expat destination, especially for Australians teaching English or working remotely in Ho Chi Minh City and Hanoi. The cost of living is low, the food is extraordinary, and the lifestyle stretches a modest income a long way. The tax story, though, is more substantial than the breezy “low cost of living” line suggests.

Vietnam taxes based on residency, much like Australia. You’re generally a Vietnamese tax resident if you’re in the country for 183 days or more (in a calendar year, or across 12 months from arrival), or you maintain a permanent or long-term-leased home there. Vietnamese tax residents are taxed on their worldwide income at progressive rates running from 5% up to 35%, while non-residents pay a flat 20% on their Vietnam-sourced employment income. So the idea that Vietnam is a tax-free idyll is wrong; once you settle in and cross that 183-day line, you’re a resident taxpayer there on a genuinely progressive scale. (From 1 January 2026, Vietnam increased its personal and dependant deductions, which softens the bill at the lower end, but the rate scale itself still climbs to 35%.)

The good news for Australians, and a key difference from Dubai, is that Australia does have a tax treaty with Vietnam. That treaty helps allocate taxing rights and provides relief so the same income isn’t simply taxed twice over, typically through a foreign tax credit for tax already paid in one country. If you remain an Australian resident while living in Vietnam, you’ll likely be navigating both systems with the treaty as referee; if you’ve become a non-resident of Australia, the Vietnamese rules largely take over for your local income, while any remaining Australian-source income stays in Australia’s net. Either way, “it’s cheap to live there” and “the tax is simple” are two very different claims, and only the first one is reliably true.

South Korea: high-ish tax, and a treaty in play

South Korea, and Seoul especially, has become a magnet for Australians, drawn by some of Asia’s better-paid teaching roles, the food, the nightlife and the easy hops to Japan and beyond. On the money side, Korea is not a low-tax jurisdiction in the Dubai sense. It runs a progressive personal income tax system that climbs to a high top marginal rate (with local income tax added on top), so a well-paid expat can face a meaningful tax bill, broadly in the same ballpark as a higher earner would face in Australia, rather than the bargain some assume.

Korea, like Vietnam, taxes on residency and uses a 183-day style test as a key marker, so spending most of your time there generally makes you a Korean tax resident, taxed on a broad base. And, helpfully, Australia and South Korea have a tax treaty, so there are tie-breaker rules and double-tax relief available if your affairs straddle both countries. The practical upshot is the same refrain: your Australian residency status drives whether Australia still wants a slice, the Korean system taxes your Korean-side income, and the treaty sorts out the overlap. The nightlife is a separate and entirely tax-free pleasure.

The thread running through all three

Notice what actually determined the tax picture in each case, and it wasn’t the souks, the street food or the karaoke. It was two things: your Australian residency status, and whether a tax treaty exists between Australia and your chosen country. Dubai is tax-free locally but has no treaty with Australia, so clean residency planning is everything. Vietnam and South Korea both tax residents properly but do have treaties with Australia, so the relief mechanisms exist if you use them. Three very different tax environments, one common decision tree.

And a reminder on the bit the original travel-brochure version of this advice always fumbles: continuing to work for an Australian company from overseas does not, on its own, keep you an Australian tax resident, nor does it make your income automatically Australian. Residency and source are decided by the rules, not by your employer’s postcode. Get a proper read on both before you go, and the move can be the adventure it’s meant to be, rather than a tax surprise with a nice view. For a worked example of one popular destination, see our guide to the top US tax issues for Australian expats, and start any plan with the residency essentials.

Planning the big move?

This is exactly what we do. We help Australians work out their residency before they go, understand how their destination will tax them, and coordinate the two sides so nothing falls through the cracks (treaty or no treaty). We work remotely with expats all over the world, and our fee is always an upfront quote.

Book an appointment with our specialist team today, well before you book the one-way flight. A bit of admin now saves a world of bother later.

General information only. This article doesn’t consider your personal circumstances and isn’t tax or financial advice. The foreign tax rules described (for the United Arab Emirates, Vietnam and South Korea) are administered by those countries’ own authorities, are summarised here at a high level, and change frequently, so obtain local advice in your destination. Whether Australia taxes your income depends on your residency and the source of that income. Speak to our specialist expatriate tax team today, or to another registered tax agent, before acting.