As Australia prepares to restart its borders and faces a severe shortage of skilled immigrants in Australia, there are growing calls to strengthen the import of immigrants to meet the needs of local labor. As Australia has a sound tax system, immigrants should need to learn more about the tax system and impacts related to moving to Australia.

How is personal income tax collected in Australia?

Australia has a sound and complex tax system. The basic rule is that Australia levies taxes on the global income of its residents. Whether you are considered a tax resident of Australia will depend on many factors, including your purpose of staying in Australia, activities, domicile or the length of time you spend in Australia in a financial year. Generally speaking, if you plan to stay in Australia for a long time, most people who plan to move to Australia for employment or business activities will be regarded as Australian tax residents.
The Australian fiscal year starts from July 1 to June 30 of the following year. The following tax rates are applicable to Australian tax residents in the 2021-22 fiscal year.

Tax income Tax rate- fiscal year 2021-22
0-Australian dollar $18,200 Allowance
AUD $18,201 – AUD $45,000 Over AUD $18,200, 19c is charged for every 1 AUD
AUD $45,001 – AUD $120,000 AUD $5,092, more than AUD $45,000, 32.5c for every 1 Australian dollar
AUD $120,001 – AUD $180,000 AUD $29,467, over AUD $120,000, 37c for every 1 AUD
AUD $180,001 and above AUD $51,667, over AUD $180,000, 45c for every 1 AUD

Australian citizens and permanent residents can enjoy public medical insurance, and the taxable person for medical insurance tax must pay 2% of the tax income.

Immigration to Australia-Income Tax Issues

Immigration on

a Temporary Visa Individuals who come to Australia on a temporary visa are usually not required to pay global income. In order to attract overseas talents, the Australian government is classified as temporary tax residents of Australia. They usually only need to file income tax returns on income from within Australia and certain types of foreign salary income. In addition, any investment income earned overseas, such as rental income and dividends, is not taxable in Australia.
In terms of public medical insurance, if the individual's country of origin has signed a reciprocal medical and health insurance agreement with Australia, and these individuals with temporary visas can enjoy Australian medical insurance, they need to pay 2% of the medical insurance cost when filing income taxes in Australia. If Australia does not have a reciprocal medical and health insurance agreement with the country they are from, individuals with temporary visas do not need to pay 2% medical insurance tax.


with a permanent visa If you immigrate to Australia with a permanent visa, your worldwide income will be taxed, including your overseas assets and real estate.

Immigration to Australia - Capital gains tax ( CGT )

Capital gains tax (CGT) is not a separate taxable category, it is part of Australia's taxable income. CGT calculates the tax payment based on the profit from the sale of assets or real estate (such as property, stocks, etc.), which is included in the taxable income of the current year. Any gains from assets or real estate will be taxed at your progressive tax rate (see table above).

Immigration with a permanent visa

For the assets and real estate you hold overseas, when you become an Australian tax resident, the Australian Taxation Office requires that the current market value is used as the cost price to calculate the asset appreciation (this is affected by certain exceptions, such as the main residence Exempt). In addition, if you hold this asset or real estate for more than 12 months, you will be entitled to a 50% discount, which means that you only have to pay taxes on half of the income.

Immigrants on temporary visas

temporary tax resident in Australia can enjoy preferential taxation. They usually only tax Australian taxable property (TAP), such as real property located in Australia. The sale of property that is not taxable in Australia (non-TAP assets) such as overseas property, real property, foreign stocks, etc., and the resulting CGT is generally not taxable in Australia. From the perspective of income tax and CGT, when an individual holds a temporary visa and owns related overseas assets, reasonable tax planning becomes very necessary.
Any income from asset appreciation needs to be included in the income of the current year, and the tax payable is calculated according to the previous progressive tax table. However, for assets held for more than one year, temporary tax residents cannot enjoy the 50% CGT discount.

Tax planning is crucial.

The Australian Federal Government has recently announced some tax reforms, which include several new rules and regulations to determine whether an individual is classified as an Australian tax resident. At this stage, the bill has not yet passed any legislation. For details, please refer to our related articles .

If you are a business immigrant and intend to seek tax services in Australia, our Moore Australia Asian business department has many experts and consultants in this area. We will provide the most suitable and effective advice and assistance according to your personal situation.

This article is issued as general commentary - please contact us about your specific circumstances.