Australia - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

Related content

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 one 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 can not 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 of origin.

© 2016 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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