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Understand your cross-border tax position

We will tell you which country taxes what, and how to avoid paying twice on the same income.

Two countries can each have a legitimate claim to tax the same income. That is not a loophole or a mistake. It is what happens when one country taxes you on where you live and the other on where the money was earned. Australia’s rules turn on residency, source, and the double tax agreements it has entered into. Working out your position means working out how those three interact for your particular circumstances.

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A residency position you can defend

The tests are applied to your facts and the conclusion documented, rather than assumed and hoped for.

Relief from paying twice

Where a treaty applies, we identify the article governing each type of income and the relief available.

Past positions corrected on your terms

Voluntary disclosure is almost always cheaper than waiting for an exchange of information match.

What determines whether Australia taxes your foreign income?

Australian tax residency is the starting point. A resident is generally taxed on income from all sources, while a non-resident is taxed only on income with an Australian source. Residency is not the same as citizenship or where you hold a passport, and it can change without you intending it to. Where both Australia and another country have a claim, a double tax agreement allocates the taxing rights and provides relief against paying twice.

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Am I still an Australian tax resident if I live overseas?

Possibly. Residency is decided by statutory tests rather than by where you spend most of your time. They look at where you dwell, your domicile, whether you have a permanent place of abode overseas, and how long you are present. Keeping a home or close family here can be enough to remain a resident.

Will I be taxed twice on the same income?

Usually not, where a double tax agreement applies. Australia has treaties with many countries that allocate taxing rights and provide relief. Relief can come as an exemption in one country, or as a credit for foreign tax paid. It is not automatic and it depends on the type of income.

What if I have not declared foreign income?

It should be corrected, and sooner is much better. The ATO receives information from many countries under exchange arrangements. A voluntary disclosure made before any review usually attracts substantially reduced penalties. It also puts you in control of how the position is explained.

Does a foreign tax credit cover the whole Australian liability?

Not always. The foreign income tax offset is generally limited to the Australian tax payable on that income. If the foreign rate is higher, the excess is not usually refunded. If it is lower, you pay the difference here.

Get your position confirmed rather than assumed

Tell us where you live, where your income comes from and what you own. We will confirm your residency position and which country has the right to tax what.

Residency is a test, not a choice

You have income, assets or business activity in more than one country, and you are not certain how the two systems fit together. The risk runs both ways. You may be paying tax twice on income that a treaty protects. You may equally be treating yourself as a non-resident when the law says otherwise. Both positions are expensive, and the second attracts penalties as well.

We will apply the residency tests to your circumstances and document the conclusion.
We will identify which country has the right to tax each type of income you receive.
We will apply the relevant double tax agreement and confirm what relief is available.
We will check your withholding obligations on dividends, interest and royalties.
We will advise on correcting any position that has been treated incorrectly.

Your life or your income no longer sits in one country

You may have moved overseas for work and kept a house here. You may have come to Australia and still hold investments at home. You may run a business that earns in two currencies and pays people in both places. What you have in common with everyone in this position is uncertainty about which country taxes what. There is usually a suspicion that it is going wrong in one direction or the other.

What's included in your cross-border tax advice

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A documented residency assessment against the statutory tests.
Source analysis for each category of your income.
Double tax agreement review, article by article.
Withholding tax and foreign income tax offset advice.
A written summary of your reporting obligations in Australia.
Voluntary disclosure advice where a past position needs correcting.

The cost of assuming you are a non-resident

Residency is the single assumption that causes the most damage, because everything else follows from it.

People assume they became non-resident when they left, or stayed non-resident while they were here. The tests do not work that way. They look at where you actually dwell, and at your domicile and any permanent place of abode overseas. They also look at how long you have been physically present. Someone who keeps a home, a family or strong ties in Australia can remain a resident for years after leaving.

When that assumption is wrong, the consequences compound. Foreign income that was never declared accumulates with interest. Capital gains on assets you believed were outside the net become assessable. The ATO receives data from many countries under exchange of information arrangements. The question is generally when a mismatch is noticed rather than whether.

From an assumption about residency to a position you can support

We start with residency, because it decides the scope of everything else. That means applying the statutory tests to your actual circumstances and documenting the conclusion, so the position has support if it is ever examined.

From there we work through what each country is entitled to tax. Where a double tax agreement applies, we identify which article governs each type of income and what relief is available. We look at withholding on dividends, interest and royalties, at foreign income tax offsets, and at any reporting obligation that has been missed. Where something has been treated incorrectly, we advise on correcting it voluntarily, which is almost always cheaper than waiting.

How we establish your cross-border position

Settle residency first, then work out who taxes what.

Settle residency

We apply the statutory residency tests to your actual circumstances, and document the conclusion in writing.

Allocate the income

We work out which country has the right to tax each type of income, and apply the relevant treaty.

Fix what is wrong

We identify any obligation that has been missed, and advise on correcting it before the ATO finds it.

Residency settled, and the treaty position with it

Advice that contradicts itself across two countries is a particular kind of frustrating. Each adviser is right about their own system, and nobody is answering the question you actually asked.

One of our lawyers is a Chartered Tax Advisor with The Tax Institute and has held that credential for 25 years. We are also recognised in Doyle’s Guide for tax law. We advise Australian residents with foreign income, and foreign residents with Australian interests. We work with advisers in the other jurisdiction rather than around them. Where your position is genuinely uncertain, we will say so and tell you what a ruling would cost.

Our great lawyer guarantee

Six principles we hold to, whatever you bring us and however long it takes.

Take the time

We listen carefully to understand what you want to achieve, then step you through the advice and the documents.

Share our knowledge

We pass on as much as we can, so you can make your own informed decisions.

Stick to our knitting

We only do what we are good at, so you never pay for our learning.

Work as one team

Someone is always available to answer your question or point you the right way.

Fair pricing

A fixed or capped quote for advice and documents, so you do not carry the price risk.

It is your show

We are in it for a front row seat to witness your success, not for our egos.

Find out where you actually stand

Tell us where you live, where your income arises and what you own in each country. We will confirm your residency, apply the relevant treaty, and set out your obligations in writing.

Speak to a lawyer 1300 654 590