Do You Need to Pay Tax on Foreign Employment Income?
You may love your home continent and are very proud to call yourself an Australian, but if you are relatively young and adventurous, then you know that there may be more opportunities away from these shores. More young people than ever are choosing to take up a job position in a foreign country, and this may be something that could have genuine appeal to you. After all, you may be able to earn a higher salary and explore a different culture at the same time, and what's not to like about that? However, you do need to be sure that your tax affairs are in order, as this can sometimes be a very difficult area to understand. What should you be aware of?
Resident or Non-Resident
In general, much will depend on the nature of your new position and whether it is intended to be long-term or not. If you're young and single, then you may not have many concrete ties to your homeland and, for example, may not own your own home. In this case, you may be able to terminate your rental contract and take all your worldly belongings on the plane with you for an appointment that may last for a couple of years. Under this type of scenario, you may well be considered as a non-resident for tax purposes.
You are legally obliged to submit a tax return to the ATO every year in any case and may have other tax considerations to consider, especially if you have any investment income or other sources. You will nevertheless need to determine whether you are a resident or non-resident before you can be certain of your position and understand how much—if any—money you will need to send in to the government.
If you are moving somewhere significant, then it is likely that the country has a dual taxation treaty with Australia, and if so, this means that you will not be taxed twice on your income. Once again, however, you should not make any assumptions here and should always seek professional tax advice before you make any decisions. You don't want to learn the hard way and be forced to make payments for any understated tax at some stage in the future.
Enjoy your new-found freedom and opportunity to see how other people live, but just make sure that you understand all the basics first.