We often get the question from clients: ‘What tax consequences are available if I’m working overseas?” Previously, income earned overseas may be considered as exempt foreign income and therefore not taxed in Australia. However, now the exemptions are very limited (Government deployment and Charitable work) and often only available if you are considered to be a non-resident.
If you are considered to be a non-resident then you are not taxed on your employment income. You may still be taxed on investment income earned in Australia.
Generally to be considered a non-resident you need to review where you live and what your intentions are. Some areas to review:
Will you and your whole family be moving overseas?
How long do you intend to stay overseas?
How often do you intend to return to Australia?
If you have a house in Australia what is your intention with your home?
The challenge with residency rules is that a large part is based on intentions, which means it makes it difficult if the ATO audits you at a later date. You need to ensure you get your facts right and the correct advice from the outset.