Hello All,

I'm getting a little confused here and would welcome some clarification if anyone can help.

As I understand things, the new “Temporary Residents” rules, which will apply from 1 July 2006, will provide temporary residents with a tax exemption for most foreign source income and capital gains and for interest withholding tax obligations associated with foreign liabilities.

Additionally, it is claimed that a "temporary resident" will be treated in a similar fashion to a non-resident for tax purposes, and it is primarily this point that confuses me.

As I will be working on a Temp 457 visa, under these new rules does it now mean that when it comes to paying Tax , if my salary is between $25,001 – $75,000, I will have to now pay $7,250 plus 30c for each $1 over $25,000 (as a Non-Resident for Tax Purposes) instead of $2,850 plus 30c for each $1 over $25,000 (as a resident for Tax Purposes).

My previous understanding was that if I were visiting Australia for more than six months and for most of that time working in the one job and live at the same place and/or intending to live in Australia permanently, then I would be classed as a Resident for Tax purposes.

Can anyone help to clarify this, as the way I now read it,I will be liable for an additional $4400 of tax !!! ($7250-$2850)


Many Thanks in advance

I dont know if I can give much help, but i'm looking into the same thing right now!

My situation is that i'm a dual citizen of the UK/Australia and have been resident in the UK for about 8 years now. I'm planning on moving back to Australia soon to become resident, but according to a tax advisor I 'may' be eligible under the foreign source income arrangement to not have to pay tax as I will continue to work for my UK based employer.

The thing is that I am already eligible for 100% tax deduction under the UK seafarers deduction scheme, however if I move to Australia then unless there is some way I can legally not pay tax then I will have to pay tax because the Australian gov't does nothing to support its seafarers.

If I find out anything i'll let you know.