Working overseas can create exciting career opportunities, whether you are accepting a job in Dubai, relocating to Singapore or taking up an international assignment. However, moving overseas does not automatically mean you stop being an Australian tax resident.
Your Australian tax residency status can have significant financial consequences, particularly when it comes to declaring overseas income, managing Australian investments and meeting your tax obligations.
In Quy v Commissioner of Taxation [2026] FCA 1316, decided on 4 September 2026, the Federal Court dismissed an engineer’s appeal concerning his Australian tax residency. Although he had lived and worked in Dubai for five years and was found not to reside in Australia under the ordinary concepts test, he remained an Australian tax resident under the domicile test. The Tribunal was not satisfied that his permanent place of abode was outside Australia, having considered his overseas employment arrangements and continuing connections with Australia.
What Happens If You Work Overseas but Remain an Australian Tax Resident?
The engineer in the case spent most of his time working and living in Dubai. However, he maintained substantial connections with Australia, including a family home in Perth, investment properties, Australian bank accounts and superannuation. His wife and children largely remained in Australia, and he returned to Australia 12 times during the five-year period. Despite spending considerable time overseas, the court found that he remained an Australian tax resident under one of the applicable residency tests. The case demonstrates that where you work and how much time you spend overseas are important, but neither determines your tax residency on its own.
The Australian Taxation Office (ATO) considers your overall circumstances when assessing residency. Your family connections, accommodation, assets, employment arrangements, intentions and continuing ties to Australia may all be relevant.
Why Australian Tax Residency Matters
The difference between being an Australian tax resident and a foreign resident can significantly affect your tax obligations.
Generally:
- Australian tax residents are taxed on their worldwide income, including employment income earned overseas, subject to applicable exemptions and tax offsets.
- Foreign residents are generally taxed on Australian-sourced income and do not receive the same tax treatment as Australian residents.
If you remain an Australian tax resident while working overseas, your foreign salary generally remains assessable in Australia, unless an exemption applies. You may also face tax overseas, although double taxation agreements and foreign income tax offsets may provide relief. Getting your residency status wrong can result in unexpected tax bills, interest and penalties.
The ATO’s Four Australian Tax Residency Tests
The ATO uses four tests to determine whether an individual is an Australian tax resident. You generally need to satisfy only one of these tests to be considered a resident under domestic tax law.
1. The Resides Test
This test considers whether you ordinarily live in Australia, based on your overall circumstances. Relevant factors can include your living arrangements, family and social connections, employment, assets and the regularity of your presence in Australia.
You may spend substantial time overseas but still be considered to reside in Australia, depending on the nature and continuity of your connections.
2. The Domicile Test
This test considers whether your domicile is in Australia and, if so, whether the ATO is satisfied that your permanent place of abode is outside Australia. Your domicile is generally the country you regard as your permanent home in a legal sense. It is not necessarily the same as your current place of employment or temporary residence.
The assessment of a permanent place of abode considers your living arrangements overseas and the nature and duration of your stay, alongside your connections with Australia. Keeping an Australian family home or maintaining close family ties may be relevant, but no single factor automatically determines the outcome.
3. The 183-Day Test
This test applies to people who are in Australia for more than half of the income year, subject to the test’s specific requirements. It also considers whether your usual place of abode is outside Australia and whether you have no intention of taking up residence in Australia. Importantly, spending fewer than 183 days in Australia does not automatically make you a foreign resident. The other residency tests may still apply.
4. The Commonwealth Superannuation Test
This test applies to certain Australian government employees who are eligible members of specified Commonwealth superannuation schemes, including certain contributing members and their eligible family members. It is less relevant to most private-sector employees working overseas, but it may be important for eligible government personnel.
What Factors Can Keep You an Australian Tax Resident?
When assessing residency, the ATO looks at the full picture rather than relying on a single factor. Consider the following areas before accepting an overseas role or relocating permanently.
Family and personal connections
If your spouse and children continue living in Australia, this may be relevant to your residency position. The nature of your family arrangements and whether you intend to return can help establish the strength of your ongoing ties.
Property and accommodation
Keeping your Australian home available for your use may be relevant. Investment properties can also form part of the overall picture, although owning property in Australia does not automatically make you a tax resident.
Employment and living arrangements overseas
The duration and nature of your overseas employment, the type of accommodation you establish and whether your move is temporary or indefinite may all be relevant.
Financial connections
Australian bank accounts, investments, superannuation and other financial arrangements may be considered alongside your broader circumstances. None of these factors alone determines residency.
Intentions and conduct
Your stated intention to live overseas needs to be considered alongside what you actually do. Travel patterns, living arrangements and continuing connections can help establish whether your circumstances reflect a genuine relocation.
The important point is that there is no universal checklist that guarantees non-resident status. Each case must be assessed on its facts.
Does Living Overseas for Several Years Make You a Non-Resident?
No. There is no simple rule that automatically makes you a foreign resident after six months, 12 months or five years overseas. Time spent overseas can be relevant, but your residency status depends on the applicable tests and your circumstances.
For example, someone who establishes a settled life overseas, moves their family and no longer maintains a home for personal use in Australia may have a different residency position from someone who works overseas temporarily while their family remains in Perth. Even then, the outcome depends on the complete facts and circumstances. You should not assume that an overseas employment contract or visa is sufficient evidence that you have ceased Australian tax residency.
What Should You Do Before Moving Overseas?
Planning ahead can help you understand your obligations and avoid unexpected tax consequences.
Before leaving Australia, consider:
- Reviewing your family, accommodation, employment and financial arrangements.
- Establishing whether you may remain an Australian tax resident under any of the four tests.
- Understanding how overseas salary, Australian rental income, investments and other income may be taxed.
- Checking whether a double taxation agreement or foreign income tax offset may apply.
- Keeping records of travel dates, overseas accommodation, employment contracts and changes to your living arrangements.
- Seeking advice about the tax consequences of selling assets or changing your investment arrangements.
If your circumstances change after relocating, review your residency position rather than assuming your original assessment remains correct.
How Camden Professionals Can Help
Camden Professionals can help Australians planning to work overseas, already living abroad or returning home review their Australian tax residency position and understand the potential tax implications.
Our team can assess your circumstances, including your Australian property and investment income, explain relevant ATO residency rules and help identify reporting obligations and potential tax issues. We can also help you organise supporting records and plan for changes to your tax position. If you are unsure whether you remain an Australian tax resident, obtaining advice before making major financial or relocation decisions can help you avoid costly mistakes.
Contact Camden Professionals to discuss your overseas employment plans and Australian tax obligations. Reach us at 08 9221 5522 or email info@camdenprofessionals.com.au to discuss your circumstances.
Frequently Asked Questions
1. How long can I work overseas before becoming a non-resident?
There is no fixed time limit. Your tax residency depends on the relevant residency tests and your overall circumstances.
2. Will I pay Australian tax on my overseas salary?
If you remain an Australian tax resident, your overseas salary is generally assessable in Australia unless a specific exemption applies. A foreign income tax offset may be available for eligible foreign tax paid.
3. Does owning property in Australia make me a tax resident?
Not automatically. Australian property ownership is one factor that may be considered alongside your family connections, living arrangements, employment and intentions.
4. What happens if I return to Australia?
Your tax residency needs to be assessed based on your circumstances when you return. Becoming an Australian tax resident again may affect how your worldwide income is taxed.
5. Can Camden Professionals help with overseas tax residency?
Yes. Camden Professionals can review your circumstances, explain relevant ATO residency rules and help you understand your Australian income tax reporting obligations.
Official References
- Australian Taxation Office: Residency tests for individuals
- Australian Taxation Office: Foreign and worldwide income
- Australian Taxation Office: Tax-exempt income from foreign employment
- Australian Taxation Office: How to work out your tax residency
General Information Warning
The material on this page and on this website has been prepared for general information purposes only and is not intended to provide tax advice for any person’s specific circumstances. Tax outcomes depend on the individual facts and the law applying at the relevant time.
Before acting on the information in this article, you should obtain professional advice that takes into account your circumstances and the details of the proposed transaction or property project.
Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Camden Professionals, its officers, representatives, employees, and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.
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