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Expatriates in Australia: Can Foreign Workers Benefit From a Special Tax Regime?

Tax advisor Jamie Towers (Hanrick Curran, Brisbane), a global mobility specialist, explains the factors that enable expatriates on temporary visas to enjoy a special tax regime in Australia.

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Australia expats tax advisor, Jamie Towers

Jamie Towers, partner, Hanrick Curran, Brisbane

"Expatriates on specific temporary visas will be treated in a similar way to an Australian resident-
he or she will enjoy marginal tax rates, but in the case of expatriates, those tax rates only apply to their Australian sourced income."

The importance of the right visa

When expatriates come to Australia on a temporary work visa such as a 457 type visa, which is an employer sponsored visa, or on some other temporary visa, he or she is deemed to be a temporary resident for Australian tax purposes.

Taxed on Australian sourced income only

As a temporary resident, he or she will be treated in a similar way to an Australian resident, so therefore they enjoy marginal tax rates. However, Towers points out the difference: "In the case of expatriates, these tax rates only apply to their Australian sourced income. Therefore, any income they have that originates from their home country will not be taxed in Australia."

Tax treatment of capital gains

Similarly, Towers points out that "capital gains, unless they relate to Australian land, will not be subject to tax in Australia."

In summary

In conclusion, foreign workers (expats) do enjoy a special tax regime in Australia.

For help with expatriate tax matters

Jamie Towers, partner at Hanrick Curran, can assist with tax and other related matters of concern to foreign workers in Australia. Contact Jamie Towers for more information.