During COVID-19, non-residents could be residents for tax purposes
- Arnold Shields
- Apr 30, 2020
- 2 min read
Updated: May 21
The COVID-19 pandemic disrupted international travel, leaving many non-residents stranded in Australia longer than they had planned. This unplanned extended stay raises important tax questions, especially around whether you're now considered an Australian resident for tax purposes.
What Does the ATO Say?
The Australian Taxation Office (ATO) has issued guidance to help clarify your obligations.
If you are not an Australian resident for tax purposes but are temporarily in Australia due to COVID-19, you generally remain assessable only on income from Australian sources. This includes:
Salary or wages earned while in Australia
Investment income from Australian assets
Any other assessable income sourced in Australia
You may need to lodge an Australian tax return if you earn this type of income, even if your stay was unintended or prolonged.
When Could You Be Considered an Australian Resident?
Tax residency is determined based on your intentions, behaviour, and length of stay, not just your visa status. The ATO considers:
Do you usually live overseas?
Do you intend to return to your home country as soon as possible?
Is your presence in Australia temporary and directly due to COVID-19 disruptions?
If the answer to these is "yes," then you’re unlikely to become an Australian tax resident.
However, you may become a resident for tax purposes if:
You end up staying in Australia for an extended period (many months or more)
You change your intent and decide to live in Australia indefinitely
Your ties to your home country weaken or cease
In that case, all your worldwide income may become assessable in Australia—unless you are a temporary resident (e.g. on certain visa classes), which may exclude foreign-sourced income.
Double Tax Agreements
Australia has tax treaties with many countries to prevent double taxation. These agreements often include rules to determine which country has taxing rights when residency is unclear. It's crucial to seek professional advice if this might apply to you.
Need Help Navigating Your Tax Residency?
Whether you're unsure if you need to lodge a return, or think your residency status may have changed, Dolman Bateman is here to help. We’ll guide you through the process with clear advice tailored to your situation.
📞 Contact us today and speak with one of our experienced accountants.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.
