Working overseas doesn’t automatically make you a tax non-resident (October 2026)

If you’re thinking about taking a job overseas, don’t assume you’ll automatically become a foreign resident for Australian tax purposes. A recent Federal Court case involved an engineer who lived and worked in Dubai for around five years. Despite spending most of that time overseas, he remained an Australian tax resident under one of the residency tests.

His ongoing ties to Australia included his family home in Perth, investment properties, Australian bank accounts and superannuation. His wife and children largely remained in Australia, and he returned 12 times during the five-year period.

Why does this matter? Australian tax residents are generally taxed on their worldwide income, while foreign residents are generally taxed only on Australian-sourced income. Getting your residency status wrong can be costly.

There’s no simple time-based rule or other safe harbour that automatically makes you a foreign resident after a certain period overseas. Your tax residency depends on your overall circumstances, including your living arrangements, family connections, assets, employment arrangements and intentions.

If you’re working overseas now, planning an overseas assignment or returning to Australia after time abroad, it’s worth checking your residency position so you can get your tax right. Talk to us if you’d like help working through the rules.