Tax on foreign employment income for a temporary resident

 Author: Throwaway136701(Newbie)Newbie

6 Apr 2024

I am trying to assess the taxable nature of income relating to employment performed overseas. 

My detailed situation is as follows (information is anonymized):

• I am an overseas citizen and was an overseas resident until I relocated to Australia in May 2023
• In October 2022, while an overseas resident and employed overseas for a job completely unrelated to Australia, I signed an employment contract with an Australian company for a job based in Australia (contract subject to being granted a visa enabling me to relocate and work as per the Australian employment contract)
• I applied for my visa in January 2023, and was subsequently granted a 482 Temporary Skill Shortage (TSS) visa in April 2023
• As a result, I resigned from my overseas job, and my contract was terminated on 10 May 2023
• I arrived in Australia on 10 May 2023, and started my Australian employment on 11 May 2023
• I received my final pay for my overseas employment contract on 20 May 2023, after my arrival date in Australia (pay included 1-10 May salary and outstanding paid leave)

My analysis is:

• I became an Australian resident for tax purposes when I set foot in Australia on 10 May 2023 (as per residency test)
• I received foreign employment income after I became an Australian resident for tax purposes, but relating to a period of employment during which I wasn’t an Australian resident for tax purposes

BUT

• “Temporary Residents”, which I am as per my TSS visa, have to declare income received for employment performed overseas while they are a Temporary Resident
• The definition of Temporary resident refers to “having” a temporary visa, as such did I become a Temporary Resident when I was granted my visa (April 2023) rather than when I arrived in Australia (11 May 2023) ?

The income relates to a period of employment I performed overseas:

• BEFORE I set foot in Australia (I was an overseas citizen and permanent resident)
• BEFORE I became an Australian resident for tax purposes
• but AFTER being granted my visa

I technically received the cash on my bank account (overseas as related to my overseas employment) after I arrived in Australia, ie. after I became a Temporary Resident AND after I became an Australian resident for tax purposes.

The payment date seems to me a technicality, and I struggle to see why this income would have to be declared in Australia, but I would like to confirm.

Many thanks for your help.

Reply0 likes

322 views

3 replies

• Report as inappropriate

322 views

3 replies