It sounds like such a simple question but determining whether you’re a resident of Australia for tax purposes of can be frustratingly difficult…and depending on the answer, the way you are taxed can change dramatically!
WHY DOES IT MATTER?
The law treats residents and non-residents differently. Australian residents are generally taxed on all of their worldwide income. Non-residents are taxed only on income sourced in Australia. The marginal tax rates are different for income below $37,000, and the effective tax rates are much higher for non-residents.
AUSTRALIAN RESIDENTS
If you are an Australian resident and you have to lodge a tax return, you need to declare your worldwide income.
NON-RESIDENTS
If you are a non-resident, you only need to lodge a tax return if you have income that is taxable in Australia.
From 1 January 2017, tourists working in Australia only for a short time are not considered residents and are subject to a special tax regime. Such working holidaymakers still need to lodge a tax return if they have income from an Australian source.