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Leon, Solicitor
Category: Australia Law
Satisfied Customers: 44375
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Tax Residency Question: I'm living overseas in the

Customer Question

Tax Residency Question:
I'm living overseas in the Philippines on a tourist visa, and have done so for 1 1/2 years without returning to Australia. I have an online business which isn't incorporated/registered (just under my name), with customers based internationally (no income comes from Australia), however all proceeds go into my Australian bank account.
I also have an investment property in Australia which I am leasing out. That's my only asset. I have no plans to return to Australia, other than for occasional visit to family or friends (no more than 2 weeks a year). I'm not married, no children in Australia. I travel around asia and other places in the world on tourist visas, without any fixed permanent residency. Am I considered a resident for income tax purposes in Australia, where I would be required to pay tax on my foreign sourced income?
If not, what measures should I take to ensure I'm no longer a resident in Australia for tax purposes? Is it necessary to establish an overseas bank account outside of australia, and also to have a permanent residency somewhere instead of renewing tourist visas year after year?
Submitted: 2 years ago.
Category: Australia Law
Expert:  Leon replied 2 years ago.

Good Morning,

My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advise but a guide to assist you.

You are a non resident in Australia and any income you earn in australia is taxed as a non resident.

You only pay tax on the Australian Income being the rental property and if your business is registered in Australia then the income you earn for that is also taxed here.

The business may have to be moved offshore and in the new country that you set it up, then you will pay tax on the income there. But the rental income in Australia will be taxed here.

I hope this makes sense and is of assistance. If there is nothing further

thank you for using my services.

If I have missed anything, or you have any further questions please let me know

If there is anything else in the future please do not hesitate to ask.

Please do not forget to leave positive feedback.



Customer: replied 2 years ago.
Hi Leon, thanks for your reply.Can I just confirm; my business isn't really based anywhere as it consists of websites only. Also the fact I'm receiving money into my australian bank account from the business, would any of these two factors influence the income from the business possibly being considered taxable in Australia? As a foreigner in the Philippines I'm exempt from foreign income tax. Is it quite certain that I am therefore exempt from all foreign income tax entirely?
Expert:  Leon replied 2 years ago.

Good Afternoon,

Where is the website registered and did you have a business name? Because the account is Australia based the ATO will tax you on that income.

I cannot speak for the Phillipines but in Australia you are going to be taxed as a non resident.

Here is some information.

Customer: replied 2 years ago.
The website is a .com address so it would be registered in the US. But I have no operations there, only the website and hosting. I had a business name before in Australia but that expired, and I don't advertise under that name anymore. If the ATO will tax me on the income as a non-resident, since it is all foreign income, would that mean I'm exempt?
Expert:  Leon replied 2 years ago.

Good Afternoon,

If the bank account is in the name of the business name it does not matter that it has expired. I was a registered Australian Business. Also even though the website is in the US it is an australian based business.

If the money goes into an australian account you will be taxed as the business was registered in australia.

Customer: replied 2 years ago.
This account is just in my personal name not the business. If I were to setup a bank account in another country (such as the Philippines) and then receive the foreign income directly into this account, would this definitely suffice as to make the income foreign-sourced? And can you confirm I'd also be classified as a non-resident of Australia, even though I'm just on a tourist visa overseas (but have not returned to Australia for 1 1/2 years)?
Expert:  Leon replied 2 years ago.

That does not matter as it was a business name it is you personally.

The tax return is done in your name.

If you were to move the funds to another country you would pay tax in that country.

You are only taxed on the income that comes into australia if you are a non resident. All other income is taxed elsewhere.