International Tax Advice for Australians

Do You Need International Tax Advice?

You’re living the dream—working remotely from Medellín or Bangkok, eating street food and relaxing on beaches. But when tax season rolls around, the dream ends and the nightmare begins. You realise you might finally need some international tax advice. Sound familiar?

Australian Taxes. International Taxes. Foreign Company Taxes. How do they all fit together?

Foreign taxes are like a pesky insect that just won’t leave you alone.

With more Australians embracing remote work, travel, and digital nomad life, legally reducing your worldwide taxes can save you time, money, and stress.

I know this from experience—moving from Sydney to Peru was easily one of the best decisions I’ve ever made. However, after six months I was randomly ghosted by my Peruvian immigration lawyer and accountant. To say it was a disaster would be a huge understatement.

I was all alone in a foreign country, worried I’d either get deported and have my visa cancelled, or I’d have to pay a ridiculous amount of excess taxes.

Luckily, I found a completely legal tax solution (and got a new local accountant called Jimmy who hasn’t once ghosted me. He even messages me my tax info on Whatsapp!).

I’m going to break down everything you need to know about managing your taxes as an Australian while living overseas.

My goal is to help you:

1. Avoid double taxation (and minimise unnecessary taxes)
2. Arrange a smart financial setup (so you can enjoy you life overseas)
3. Show you how to save time and money (because more money = more freedom).

Why International Tax Advice is Important

Moving overseas is the thrill of a lifetime. New cultures, delicious food, exotic languages, crazy adventures, co-work spaces, and a lower cost of living. But it also creates complexity (and a huge headache) when it comes to taxes. You might be currently:

• Paying tax twice on the same income.
• Missing deadlines and getting hit with penalties.
• Overpaying on tax because of poor planning or misinformation.
• Not paying tax at all which opens you up to legal and visa complications.

Whether you’re working from a coworking cafe next to Machu Pichhu, freelancing on Upwork, or running a successful business online, having a smart tax strategy will help you reduce unnecessary taxes. And working with an international tax accountant will save you money in the long run.

That way, you can travel more, explore new cultures, and get tango lessons from Mateo in Buenos Aires.

Determine Your Tax Residency Status

The Australian Taxation Office (ATO) uses tax residency rules to determine if you need to pay Australian taxes while living abroad. The tricky part? You’re not automatically a non-tax resident just because you leave Australia. You have to officially cut all ties. That’s why international tax advice is so important.

The ATO uses several tests to assess your residency status:

• The Resides Test: Do you live in Australia for most of the year? If yes, you’re still a tax resident.
• The Domicile Test: Do you have a permanent home in Australia, even if you’re overseas? If yes, you might still be considered a tax resident.
• The 183-Day Test: If you spend more than 183 days in Australia in any financial year, you’ll likely be considered a resident for tax purposes.
• The Commonwealth Superannuation Test: If you or your employer contributes to an Australian government super fund, it may affect your residency status.

Once you stop being an Australian tax resident, you no longer have to pay Australian income tax on overseas income—just in the country you’re living in.

However, if you have a HECS-HELP debt, make superannuation contributions, or have Australian investment income, you’ll need to lodge a tax return each year.

How to Avoid Double Taxation

Double taxation happens when two countries tax the same income. Luckily, Australia has tax treaties with several countries to prevent this. Some of the key countries include:

• United States
• United Kingdom
• Germany
• Singapore
• Argentina
• Mexico
• Spain
• Thailand
• Indonesia

How do you avoid double taxation?

• Tax Credit: If you pay tax in your new country of residence, you can claim a credit for the amount paid on your Australian tax return (and vice versa).
• Exempt Income: In some cases, income earned overseas is exempt from Australian tax altogether (and will likely be taxed differently in your destination country).

For example, in Peru, the first six months I lived here were tax-free. Once I became a tax-resident, I had to file local taxes but was exempt from paying taxes in Australia. Because my income was going through a foreign LLC, I was able to avoid being taxed twice in Australia and Peru.

This is where international tax advice can really help!

Do You Need to File a Tax Return in Australia After Leaving?

Yes. Even if you leave Australia permanently, you’ll still need to lodge a final Australian tax return. You can declare your departure date, any income earned before leaving, and can confirm your status as a non-resident for tax purposes.

If you earn Australian-sourced income while living overseas (rental income, interest income, or dividends), you’ll pay non-resident tax rates, which start at 32.5% with no tax-free threshold. And you have to submit a tax return each year, even if your income is only $1.

Super Contributions While Overseas

You can still make contributions to your super fund while living overseas (and it won’t affect your tax residency). Up to $30,000 per year can be claimed as a tax deduction against any Australian sourced income.

• To claim these as deductions, you’ll need to submit a Notice of Intent (NOI) to Claim form to your super fund before filing your return.
• Be sure to keep a confirmation letter from your super fund, as the ATO may request proof down the track.

Making super contributions can be an effective tax strategy (as well as saving for retirement) as it can reduce your Australian sourced income and related tax payable. Plus, it’s only taxed at 15% until pension age (then it’s 100% tax-free).

HECS-HELP Debt Obligations While Overseas

If you have an outstanding HECS-HELP debt and live overseas, you’re still required to submit a tax return each year and make payments on your loan. You’ll need to report:

• Global income earned (if it’s over $12,887 in 2024). Otherwise you can submit a non-lodgement advice.
• Make compulsory repayments even while living abroad. The ATO will calculate these automatically for you when you lodge your tax return. If you can’t pay the full amount, you can ask for a payment plan.

Income from Australian Investments

You’re still required to report any Australian investment income while living overseas. This include:

• Rental property income: All rents received, less deductions (agent fees, depreciation, repairs & maintenance).
• Share dividends: You’ll need to report dividends (including franking credits) and calculate capital gains on any shares sold. You may not have to pay CGT if you did a deemed disposal on your departure from Australia.
• Crypto transactions: If you hold crypto in Australian exchanges or trade regularly, the ATO will treat profits as either capital gains or business income, depending on the volume.

How to Lodge Your Tax Return from Overseas

You can lodge your return through:

• myGov: Using the ATO’s online system. Be sure to keep receipts and documentation of everything to back up your claims.
• Registered Tax Agents: This is recommended if your situation is complex, if you have multiple investments and overseas income, or if you’re too busy to submit it yourself (most expat firms charge around $1,000 USD).
• Paper forms: If you prefer to submit via mail, you can, but it’s a headache and will take a lot longer, especially if you’re posting it from halfway across the world.

By keeping on top of your Australian tax returns, you can avoid penalties and interest from the ATO, and keep on top of your superannuation payments for retirement. If you need international tax advice around this, feel free to reach out.

How to Set Up a Tax-Friendly Foreign Company

Many countries offer financial incentives for remote workers and entrepreneurs via digital nomad visas, low start-up tax rates, or other long term visas. There are many ways to manage your taxes while living overseas:

• Set up a foreign company: A foreign company (like a US LLC) is much easier to manage than an Australian company (which requires at least one Australian-residing director). It’s great for receiving international payments through Stripe and allows you more flexibility with moving your money around. Plus, it offers liability protection for legal issues and helps with obtaining insurance in the US.
• Digital Nomad Visas: Countries like Portugal, Thailand, and Argentina offer visas that allow Australians to work remotely for 6-24+ months without paying local taxes for a certain period. These can be very beneficial if you’re starting out or wanting to reduce your taxes while living overseas.
• Multi-Currency Accounts: Services like Wise or Revolut make it easy to manage multiple currencies without high conversion fees. It’s helpful to have a few separate bank accounts in separate countries / currencies in case one of them gets frozen (I’ve seen this happen to people). For example, I have USD in Mercury via my US LLC, AUD and USD in my Wise account, Peruvian soles in my BCP account, and AUD in my NAB account. I keep a portion of savings with each bank to protect myself from FX risks and fluctuations.

Once you get a long-term visa in a country, it’s usually pretty easy to get a bank account. An immigration lawyer or local accountant can help you with this.

What Happens to Your Australian Super?

You don’t lose access to your super just because you move overseas. It stays in Australia, accumulating profits until you decide to retire.

• Super in Australia: You can leave your funds in your current super account, although fees might continue to apply and insurances may not apply to you as a foreign-resident. Be sure to check with your super fund.
• Consolidate accounts: If you have multiple super accounts, consider consolidating them into one fund to save on fees.
• Early Access: Some Australians working overseas can access their super early in cases of severe financial hardship—but it’s rare and there are lots of hoops to jump through.

If you’re planning to retire in Australia one day, it’s worth keeping an eye on your super. An international tax accountant can help with this. Plus, if you return to Australia to retire, your super will be tax-free once it switches into pension mode, and then you can travel the world as you please, tax-free!

Local Taxes

Every country has their own tax system and rates, however they’re all fairly similar. There are advantages available to Australian expats who earn foreign income or who qualify for a digital nomad visa:

• Portugal: 20% tax on income earned if you live in Portugal for digital nomads under the NHR scheme.
• Thailand: Foreign income is only taxed if / when you bring it into the country.
• Argentina: You can live tax-free for up to a year before becoming a local tax resident on the digital nomad visa.

The tax rate may not be super important if you have a low cost of living to balance it out. Living in Peru, I pay 30% tax on my personal income, but it’s worth it to me because of the quality of life and the cost of living is about 1/3 of Australia.

Tax Tips for Freelancers and Remote Workers

If you’re a freelancer or running an online business, here are some tips to simplify your taxes:

• Track all of your expenses: Software like Xero or a spreadsheet can help keep everything organised, making it easier to keep track of your income and tax liabilities.
• Keep digital receipts: Many countries accept digital receipts as proof of business expenses. Even a bank account statement is sufficient if you can provide the company details (e.g. software).
• Hire a local accountant: They’ll know the ins and outs of tax laws in your new country and can help you stay compliant. They’ll also be able to help with tax benefits available. Check with the local tax authority and Google the country’s tax system, as accountants sometimes provide mixed and incorrect information.
• Separate personal and business accounts: Use separate bank accounts for personal and business expenses to avoid confusion when filing your taxes. This also helps keep your foreign company legally compliant.

Want To Know More?

Here at Adventure Tax, we specialise in providing international tax advice to Australian expats and digital nomads. Navigating tax-residency and overseas taxes can be complicated and stressful. We’re here to make it easier for you. To find out more, send us an email or book a call with our team.

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