Author: JayATO(Community Support)Community Support 13 Apr 2026
Hi @VicZ,
Your tax residency status depends on your specific circumstances and can change when you move overseas permanently. If you've been outside Australia for most of the last income year, you may have become a foreign resident for tax purposes during that period. When you lodge your 2026 tax return, you'll need to answer the question about whether you were an Australian resident for tax purposes for the full year. If your residency status changed part-way through the year, you'll indicate the date it changed and how many months you were an Australian resident.
As a part-year resident, you'll receive a pro-rata tax-free threshold based on the number of months you were an Australian tax resident. We calculate this automatically when you lodge your return. You just need to provide the date your tax residency changed and the number of months you were an Australian resident for tax purposes.
For your second question about working for an Australian company while living in Japan, your situation involves both Australian and Japanese tax obligations. If you remain an Australian tax resident, you must declare your worldwide income on your Australian tax return, including income earned while in Japan. If you become a Japanese tax resident, you'll need to file tax returns in both countries. Australia and Japan have a tax treaty to prevent double taxation, which means income taxed in Japan can be credited against your Australian tax liability through the foreign income tax offset.
The source of your income also matters. If you continue to be paid by the Australian office, the income is considered Australian-sourced. If you start getting paid by the Japanese office, the income will be considered Japan-sourced. If you remain on the Australian payroll, your employer must continue to withhold Australian taxes and report your income to us.
You'll need to work out your residency status using our online tool for tax residency. Once you've determined your status, you may need to provide your employer with a new withholding declaration so they withhold the correct amount of tax. For Japanese tax implications, you'll need to check with the Japanese National Tax Agency.
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