relocating to australia

Relocating to Australia after working overseas: some tax issues to consider

Moving home after spending time as an expat can be both exciting and daunting. On one hand, you can look forward to catching up with friends, speaking your own language and familiar surroundings. On the other hand, settling back in can be challenging and, if you’re not careful, you might face some issues with your next Australian tax return. Here are a few to consider.

1. When abroad, were you or were you not an Australian resident for tax purposes?

If you were an Australian resident for tax purposes, then any income you earned abroad must be included in your Australian tax returns and will be taxed accordingly.

2. Did you live in a country with similar or contrasting taxation rates to those of Australia?

If taxation rates in the country where you lived are on a parallel with Australia’s, then you won’t have to worry too much. Most of the time, you’ll receive foreign tax credits, which make up for tax paid abroad.

However, if you lived in a country where taxation rates are much lower than Australia’s, then you should be mindful. It’s likely you’ll face a major shortfall, which you’ll be obliged to pay to the Australian Taxation Office (ATO).

3. Did you receive money via a foreign pension scheme?

You might be in luck. If you get onto it within half a year of your return, you might be able to shift the money into your Australian super fund. That said, super law can be a real minefield and you might need expert help to find your way around.

4. When will you receive your final income for your overseas job?

If you were a non-resident for tax purposes and want to make sure that every cent you earned has nothing to do with the ATO, then it’s a good idea to make sure you receive all income owing to you before you leave. That includes your regular salary and any bonuses. Remember that you become an Australian resident for tax purposes on the very day you return.

Are you wondering about any other tax issues you might face on getting back from overseas? Feel free to get in touch with us and ask.

Shane Macfarlane CA
Follow me

Comments 2

  1. I approached ATO about my residency and I’ve told that I’m non resident for tax purpose. But I had joint account and some interest earned. Do I need to pay tax for the interest earned. The accountant is saying that I need to pay tax of 50 cents for the interest earned…

    1. Post

      Hi Kumar,

      If you are a non-resident then you will be required to pay a 10% non-resident withholding tax on any interest earned. Your accountant is most likely correct in this instance.



Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.