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• Watch This VideoEffective 01 July, 2006, workers in Australia from outside the country will not have to declare their income on their Australian tax forms. Work permit holders will have to pay taxes on all income generated while working in Australia, but their foreign income will no longer be a factor.
The proposal passed the Australian Parliament at the end of May and was given Royal Assent in mid-April. The official title is Tax Laws Amendment (2006 Measures No. 1) Act 2006 (No. 32, 2006) - Schedule 1. The main beneficiaries of the change are intended to be individuals with an employer sponsorship who have been granted a visa under subclass 457. Other foreigners and temporary residents may also benefit.
Excerpted directly from the legislation :
This Subdivision modifies the general tax rules for people in Australia who are temporary residents, whether Australian residents or foreign residents.
Generally foreign income derived by temporary residents is non-assessable non-exempt income and capital gains and losses they make are also disregarded for CGT purposes. There are some exceptions for employment-related income and capital gains on shares and rights acquired under employee share schemes.
Temporary residents are also partly relieved of record-keeping obligations in relation to the controlled foreign company and foreign investment fund rules.
Interest paid by temporary residents is not subject to withholding tax and may be non-assessable non-exempt income for a foreign resident.
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