Sydney, Australia

Australian Temporary Resident Rules

By David Lechem, Stephen Jankelowitz and Robert Moylan, Ageis

In this global world, incentives are offered by some countries to encourage investment and immigration. Australian tax residents are taxed on worldwide income including income from assets held indirectly through interests in foreign companies or trusts. In 2006, Australia introduced a regime where Australian tax residents who are temporary residents can apply significant tax concessions in respect of their foreign income and gains.

Temporary resident

A person is a temporary resident if they hold a temporary visa (and they or their spouse are not treated as Australian residents for the purposes of Australia’s social security laws). These include temporary work visas or significant investment visas where a person is required to either invest in an Australian business or a specified amount in a class of Australian investments. These visas can be a pathway to permanent residency and potentially Australian citizenship.

Tax concessions

Temporary residents who are Australian tax residents are liable to tax on their worldwide income but subject to the following concessions:

  • ordinary and statutory income (but not capital gains) derived from sources outside of Australia is not taxable, except income that relates to employment or services provided while a temporary resident;
  • disregard capital gains made in respect of worldwide assets, other than interests (direct or indirect) in Australian real property;
  • exempt from any deeming provisions that seek to tax certain undistributed income made by foreign companies and trusts;
  • exempt from the obligation to pay 10% withholding tax on any interest payments made to foreign lenders.

Tax is levied on their taxable income up to 45% (applies on income over AUD 180,001). Temporary residents can also request an exemption from the additional 2% Medicare Levy. Australia, an island with closed borders and a progressive regulatory regime, has seen through the worst of the global pandemic. We see an increased desire for immigration to Australia and the opportunities that exist under these visa classes are well placed.


David Lechem

David Lechem

GGI member firm
Ageis Accounting and Tax Pty Ltd
Advisory, Auditing & Accounting, Corporate Finance, Fiduciary & Estate Planning, Tax
Sydney, Australia
T: +61 2 8123 1000
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W: ageis.com.au

Ageis delivers premium accounting, tax, legal advice and family office services across a wide range of global clients. We provide a premium service across multiple disciplines dealing with the complexities of global families, their businesses and investments. As your trusted advisors we partner with you and your future generations.

As a Tax Lawyer for 19 years, David Lechem has advised Australian and international clients including private clients, high net wealth individuals and businesses in a range of industries. David has extensive experience with temporary resident clients and is well placed to assist with their needs.
Stephen Jankelowitz

Stephen Jankelowitz

GGI member firm
Ageis Accounting and Tax Pty Ltd
Advisory, Auditing & Accounting, Corporate Finance, Fiduciary & Estate Planning, Tax
Sydney, Australia
T: +61 2 8123 1000
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W: ageis.com.au

Stephen Jankelowitz is Director and Co-Founder of Ageis. For over 20 years, Stephen has been the trusted advisor to professionals, high net wealth individuals and family groups both locally and internationally. His accounting and tax expertise have helped his clients successfully manage their financial and tax affairs.
Robert Moylan

Robert Moylan

GGI member firm
Ageis Accounting and Tax Pty Ltd
Advisory, Auditing & Accounting, Corporate Finance, Fiduciary & Estate Planning, Tax
Sydney, Australia
T: +61 2 8123 1000
E: This email address is being protected from spambots. You need JavaScript enabled to view it.
W: ageis.com.au

Robert Moylan is Director, Accounting and Tax, with Ageis. He has been a trusted advisor to a range of Australian and international clients for over 20 years. He is a Chartered Accountant, specialised in taxation, accounting


Published: International Taxation Newsletter, No. 13, Autumn 2020 l Photo: jamenpercy - stock.adobe.com

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