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Australia - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

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Residency rules
Payroll considerations
Taxable income
Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than 1 year.

Residency rules

Are there special residency considerations for short-term assignments?

A person in Australia temporarily (but long enough to become a tax resident as discussed earlier) and who is the holder of a temporary visa is only subject to tax on employment income derived while in Australia, plus any Australian-sourced income. Persons who are Australian citizens (or the spouse of an Australian citizen), permanent visa holders, or holders of certain special protection visas cannot be considered temporary residents of Australia and are therefore subject to tax on their worldwide income.

Payroll considerations

Are there special payroll considerations for short-term assignments?

No, the payroll implications are the same for permanent residents as temporary residents.

Taxable income

What income will be taxed during short-term assignments?

The only income that will be taxed during short-term assignments are the assignee's employment income, Australian-source income, and gains from taxable Australian assets.

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in Australia?

An assignee who becomes a tax resident may be liable to pay the Medicare Levy and Medicare surcharge, depending on their level of income and whether there is a reciprocal health agreement between Australia and their country/jurisdiction of origin.

Disclaimer

All information contained in this publication is summarized by KPMG Australia Pty Limited, an Australian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on the Australian Income Tax Rates Act 1986, Superannuation Guarantee Charge Act 1992 and the Superannuation Guarantee (Administration) Act 1992, Medicare Levy Act 1986 and Income Tax Assessment Act 1936 Part VIIB, Australian Income Tax Assessment Act 1936 and Australian Income Tax Assessment Act 1997, the Australian Fringe Benefits Tax Assessment Act 1986, Australian Taxation Administration Act 1953, Part 2-5, Australian Income Tax Assessment Act 1997 Division 102 (section 102-5 is the operative provision which includes net capital gain in assessable income), Australian Taxation Office web site ATO assist at www.ato.gov.au or Tax Pack.

©2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation.

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