Working Overseas, Double Tax, and the Truth About “Low-Tax” Destinations

Living and working in another country is a genuine adventure. A new culture, a fresh start, often a bigger pay packet. It’s no wonder so many Australians give it a crack. The one travel companion you can’t shake, sadly, is tax. It boards the plane with you, and if your work straddles two countries, you can find both of them eyeing the same income.

So let’s clear up how double taxation actually works, what Australia’s tax treaties really do (and don’t do), and which popular expat destinations are genuinely low-tax, because a few of the usual suspects very much aren’t, no matter what the glossy relocation brochures suggest.

The myth to bust first: a low-tax country doesn’t shrink your Australian tax

Here’s the misconception that costs people the most. Moving to a country with low tax rates does not, by itself, reduce your Australian tax. What determines your Australian tax is your tax residency, not the income tax rate wherever you’ve landed.

If you genuinely cease to be an Australian tax resident, Australia generally steps back from taxing your foreign income. If you’re still an Australian resident, Australia generally taxes your assessable income from all sources, whether earned in Australia or overseas. A low rate overseas can simply mean you pay a bit there and potentially top up to Australian levels here. The destination’s tax brochure is not a discount voucher for your Australian return. Residency is the lever, and it depends on your circumstances and ties, not on a postcode. We walk through how it’s decided in our guide to being an Australian resident for tax purposes.

What “double tax” really means, and what treaties actually do

When two countries both want a slice of the same income, that’s the double-taxation problem. To manage it, Australia has a network of tax treaties with many countries, including Singapore, Canada, Germany, the UK, the US and New Zealand.

But be precise. A treaty is more like a referee than a discount voucher. It usually does three jobs: it allocates taxing rights between the two countries for each type of income; it helps reduce or relieve double taxation, often through a foreign income tax offset or credit; and, where you’re a resident of both countries under domestic law, it may contain a tie-breaker that treats you as resident of one country for treaty purposes.

The phrase “for treaty purposes” matters. A treaty tie-breaker doesn’t automatically erase your domestic-law filing obligations. You may still need to lodge, disclose income, or claim treaty relief properly. Treaties are useful. They are not fairy dust.

The practical takeaway: a treaty can reduce or relieve genuine double taxation, but it doesn’t promise you’ll only pay the lower of the two countries’ rates, and it doesn’t mean you can simply ignore one country.

Income tax is not the only line on the payslip

One more boring but expensive warning: double tax treaties are mainly income tax tools. They don’t necessarily solve social security, payroll taxes, pension contributions, health insurance levies or state and provincial imposts.

That matters in places like Canada and Germany, where the headline income tax rate is not the whole cost of employment. The payslip has more pockets than you think.

The Australian traps before the foreign country even gets a turn

Before comparing Singapore, Dubai, London or Toronto, deal with the Australian exit issues. Otherwise you’re comparing headline tax rates while standing on a rake.

First, CGT event I1. When you cease Australian tax residency, Australia can treat you as having disposed of many of your non-taxable-Australian-property CGT assets at market value on the day you leave. Shares, ETFs, crypto, foreign assets and founder equity can all be in the conversation. You may be able to choose to disregard the deemed gain or loss, but that keeps the relevant assets inside the Australian CGT net until you sell or become an Australian resident again. In plain English: Australia may let you park the bill, but it keeps the car keys.

Second, your Australian home. If you keep it and sell later while you’re a foreign resident, the main residence exemption is generally denied unless the narrow life-events test applies. The six-year absence rule can still be powerful if you sell while you’re an Australian resident and the usual conditions are met, but it can be close to useless if you sign the contract as a foreign resident. Memories of the backyard barbecue don’t do the tax return. We unpack this in our guide to the main residence exemption and the six-year rule for expats.

Third, the proposed 2027 CGT changes. The 2026-27 Federal Budget proposed replacing the 50% CGT discount with inflation-based indexation and introducing a minimum 30% tax rate on capital gains from 1 July 2027. Bills have been introduced, but the final law should still be checked before relying on it. For large unrealised gains, this isn’t background noise. It’s the drumbeat. We cover it in our 2026 Budget guide for expats.

Do you still have to lodge in Australia?

Even as a foreign resident, you can still have Australian tax obligations if you earn Australian-source income. But the bucket matters.

Some Australian income is dealt with by final withholding tax at source. Common examples include Australian interest, royalties and the unfranked part of dividends paid to non-residents. Fully franked dividends are usually not subject to further Australian tax for non-residents, although you don’t get the franking credit back. Nice try. The ATO has seen that one.

Where final withholding tax applies correctly, that income often doesn’t need to go into an Australian tax return. But other income still can: Australian rental income, business income connected with Australia, employment income sourced here, and capital gains on taxable Australian property can all remain in the Australian net.

For CGT, “taxable Australian property” is the key phrase. Australian real estate is the obvious one. Ordinary portfolio shares in Australian companies are often not taxable Australian property for foreign residents, but land-rich interests, substantial holdings and employee share scheme interests can change the answer. The label “Australian shares” isn’t enough; the asset needs a proper look. We unpack it in our guide on whether you need to lodge a tax return while living overseas.

Popular destinations, very different tax stories

People love a “best countries for expats” list. Fair enough. But these favourites have wildly different tax realities, and conflating “great place to live” with “low tax” is exactly how people get a nasty surprise. Australia has income tax treaties with most, though not all, of the countries below (the UAE is the notable exception), so check the position for your specific destination rather than assuming treaty protection applies. Here are seven of the destinations Australians most commonly head to, and what the tax picture actually looks like.

Singapore: the genuinely low-tax one

Singapore is the one that largely lives up to the low-tax reputation. It taxes income mainly on a source and receipt basis: Singapore-sourced income is generally taxable, and most overseas income received in Singapore by individuals is not taxable unless a specific exception applies.

Singapore also has no general capital gains tax. That’s not the same as saying every profit is tax-free, though: if a gain is really a trading or revenue gain, it can still be taxable. Tax law enjoys ruining slogans. You’re generally treated as a Singapore tax resident if you’re in Singapore (or working there) for at least 183 days in the relevant year, at which point progressive resident rates apply, topping out at 24% on income above SGD 1 million. Combined with a strong commercial environment and an internationally minded school system, it remains a long-standing favourite for Australian professionals and families. We compare the two systems properly in our Singapore tax guide for Australian expats.

The United Arab Emirates (Dubai): the zero-income-tax magnet

The UAE is the headline act for high earners, and for good reason: there’s currently no personal income tax on individuals, so employment salary and ordinary personal investment income are generally received without UAE personal income tax. For high-income employees, that’s a serious attraction. The skyline isn’t the only thing designed to impress.

But the “zero tax, full stop” line isn’t the whole truth. The UAE has federal corporate tax, generally 9% above the taxable-income threshold (introduced June 2023), and VAT at 5%. Natural persons can also come within the corporate tax rules if they conduct a business or business activity in the UAE and turnover exceeds AED 1 million, though wages and ordinary personal investment income are generally carved out. So freelancers and business owners shouldn’t borrow the employee answer and call it planning.

And from the Australian angle, the usual rule bites hardest here. A UAE residence visa doesn’t automatically make you a non-resident of Australia, and importantly, Australia does not currently have an income tax treaty with the UAE, so the treaty relief mechanisms that exist for most other destinations on this list simply aren’t available. If you keep one foot at home, that beautiful 0% rate may do very little for your Australian bill. The zero rate only really pays off once you’ve genuinely cut Australian tax residency.

The United Kingdom: same top rate as home, with a nasty trap

The UK hosts one of the largest Australian communities anywhere, and it’s a natural move for work, family and history. On tax, don’t expect a simple saving: the additional rate is 45%, and between £100,000 and £125,140 the personal allowance tapers away, creating an effective marginal rate of around 60% on that slice. The tax law didn’t call it a trap. It just built one.

The old non-dom remittance basis was replaced from 6 April 2025 by the four-year foreign income and gains regime. That can be valuable for qualifying new residents who’ve been non-UK resident for at least 10 consecutive tax years, but it isn’t the old broad non-dom playbook with a new hat. The UK is a wonderful place to live and work; just go in knowing it’s a comparable-tax country, not a cheap one. We cover it properly in our tax guide for Australians moving to the UK.

The United States: the most demanding of the lot

The US draws a huge Australian population and is, on tax, the most complex destination here by a distance. It taxes resident aliens, and its citizens, on worldwide income. It stacks federal, state and payroll taxes on top of one another. And Australian superannuation can become a serious US tax and reporting problem, because the US doesn’t automatically treat it like a neat US 401(k) or IRA.

This is the one move where getting cross-border advice before you go is genuinely worth a fortune. Australian super, managed funds, ETFs, the PFIC rules, foreign bank reporting and state tax all need a look before the plane boards. The US system isn’t out to be charming. It’s out to be thorough. We dig into the detail in our guide to US tax issues for Australian expats.

New Zealand: the easy move with a real tax sweetener

For a lot of Australians, New Zealand is the most natural move of all: close, familiar, and an easy cultural fit. It also has a genuinely attractive tax feature: no general capital gains tax, although the bright-line rule can tax residential property sold within two years and other land-sale or revenue rules can still bite.

The top personal rate is 39% on income above NZD 180,000. New migrants, and New Zealanders returning after an extended absence, may also qualify as “transitional residents,” giving roughly four years of exemption on most foreign-sourced income while they settle in. That’s a real sweetener, but it has conditions. Tax concessions rarely arrive without a clipboard. We compare the two systems in our New Zealand tax guide for Australian expats.

Canada: wonderful, but not a tax haven

Canada is a brilliant place to live: welcoming, spectacular scenery, an easy cultural fit for Australians. What it is not, despite what some older articles claim, is low-tax. Canada layers provincial income tax on top of federal income tax, and in many provinces the combined top marginal rate exceeds 50%, which is actually higher than Australia’s top rate of 45% (plus the 2% Medicare levy). So by all means move to Canada for the mountains, the maple syrup and the genuinely lovely locals, just don’t do it expecting a tax cut. The honest pitch is lifestyle, not low rates.

Germany: a great base, with grown-up tax rates to match

Germany offers a lot: history and culture on tap, excellent infrastructure, strong worker protections and work-life balance, and a perfect launchpad for exploring the rest of Europe. On tax, though, it’s firmly in the developed-economy mainstream rather than the bargain bin. Germany’s top income tax rate is 45%, and a solidarity surcharge pushes the effective top rate higher still for high earners, before you even get to social contributions. It’s not punitive for what you get in return, but it’s certainly not a low-tax play. Move there for the life, the location and the lager, not to outsmart the taxman.

Thinking further afield? A quick tour of other expat favourites

Plenty of Australians settle well beyond those seven, particularly across Asia and the Gulf. Each has its own quirks, and several have changed their rules recently, so here’s the short version, with links to our fuller guides where we have them:

• Hong Kong is the other great Asian finance hub: low, territorial salaries tax, no general capital gains tax, and a sizeable Australian professional community. See our Hong Kong guide.
• Malaysia is comfortable and affordable, but the old “Malaysia taxes nothing foreign” line is out of date: foreign-sourced income received by residents has been taxable since 2022, with an individual exemption by concession running to the end of 2036, and a capital gains regime (mainly aimed at companies) from 2024. See our Malaysia guide.
• Indonesia (Bali) draws a big crowd, but watch the residency rules: you can be treated as a tax resident if you’re in Indonesia for more than 183 days in a 12-month period, or earlier if your facts show an intention to reside. A long-stay permit, lease, family move or local life can do more tax work than people expect, with progressive rates up to 35%. See our Bali and Indonesia guide.
• Thailand changed the game from 2024. Foreign-sourced income derived from 1 January 2024 by a Thai tax resident can be taxable when brought into Thailand, even if brought in during a later year. Pre-2024 income is treated differently, but only if you can prove it. The old “wait a year and bring it in tax-free” trick is no longer a planning strategy; it’s a museum exhibit. See our Thailand guide.
• The Philippines generally taxes resident foreigners only on Philippine-sourced income, which can be appealing. But remote workers need to be careful: services physically performed in the Philippines can be Philippine-sourced even if the client, employer or bank account is offshore. “Paid from overseas” isn’t the same as “earned overseas.” Tax law does enjoy removing the fun from geography.
• Saudi Arabia is increasingly opening to foreign professionals and, like the UAE, generally levies no personal income tax on employment income. But non-employment or business income can be a different story, and Australian residency still has to be solved first. No local salary tax doesn’t mean no Australian tax. Different country, same old trap.
• Portugal deserves a specific warning: its famous non-habitual resident regime, the thing that made it a magnet for expat retirees and remote workers, closed to new applicants from 2024, with the transition windows now largely historical for new movers. It’s been replaced by a narrower regime aimed at specific skilled, research and innovation roles. Without that, Portugal’s ordinary resident rates run up to 48%, with an additional solidarity rate for higher incomes. If a relocation pitch still sells Portugal on “the NHR,” it’s out of date. Possibly wearing flares.

For any of these, the foreign rules are administered by that country’s own authority and shift regularly, so treat the above as a starting point and confirm the current detail (and the foreign side) with a qualified local adviser.

The bottom line

Working overseas is a fine ambition, and these are all terrific places to do it. But pick your destination for the life you want, not for a tax saving that, in several of these cases, simply isn’t there.

Three truths hold. Your Australian tax turns on your Australian residency, not the local rate. A treaty can reduce genuine double taxation, but it doesn’t let you cherry-pick the cheaper system (and with somewhere like the UAE, there’s no treaty at all). And before the foreign country gets a turn, Australia may already have exit-tax, lodgement, former-home and CGT-discount issues waiting in the hallway.

Get the Australian side mapped properly before you go (your residency, what you’ll still need to report, CGT event I1, your Australian home, and whether a treaty actually applies to where you’re going) and the adventure can be about the adventure, not about an unexpected tax bill catching up with you a year later.

Heading overseas to live and work?

This is exactly what we do. We help Australians all over the world work out their residency, understand what they need to lodge here, and apply the relevant tax treaty (or navigate the absence of one) so they’re not paying more than they should in either country. We work remotely with expats everywhere, and our fee is always an upfront quote.

Book an appointment with our specialist team today, ideally before you board the plane. Future you is already nodding along.

General information only. This article doesn’t consider your personal circumstances and isn’t tax or financial advice. It describes aspects of foreign tax systems for general context only; those rules are administered by the relevant overseas authorities and change frequently, so confirm the current position with a qualified local adviser. Your Australian tax outcome depends on your specific circumstances, your residency, your timing, and any applicable tax treaty. Some measures referred to are proposed but not yet law and may change. Speak to our specialist expatriate tax team today, or to another registered tax agent, before acting.