Business travellers, tourists could be caught in new tax rules

Business travellers, tourists could be caught in new tax rules (AFR)

The government is considering a new "bright line" rule, that'll be as subjective as the old rule?

The actual consultation paper: https://treasury.gov.au/sites/default/files/2023-07/c2023-205344-cp.pdf

From the flowchart on page 13 it seems very hard to escape tax residency via the overseas employment criterion. Unless you initially sign a contract of more than two years you'll never satisfy the criterion no matter how long you work overseas because you won't have been a resident in the prior three income years (you'll have been only a tax resident). However after spending fewer than 45 days in Australia for three consecutive income years you will cease to a resident without further tests, at least as far as the flowchart goes.

 

Don’t come back more than 45 days each FY, sell all properties under your name, live in a temporary place while in Australia, cut all family ties and have a permanent job with accommodation elsewhere…

 

They have been talking about this for about 4 or 5 years but nothing has happened so it may not happen.

Whatever happens though will be unfair for some people and there will be ways to structure your affairs to suit you one way or another.

 

this was in the Morrison-Frydenberg Budget a few years ago. seems nothing happened.

 

The ATO has already adopted some of these measures into its ruling on foreign tax residency. These rules are intended to impose a statutory basis rather than rely on common law. I got the feeling the ATO was tired of waiting for Govt to pass laws.

New one-stop shop ruling on residency

Tourists wont be implicated.