The ATO have identified this area of taxation as a risk to the revenue and are actively pursuing taxpayers for the non disclosure of foreign source income.

Under Australian taxation laws, a resident of Australia is generally liable to Australian income tax on their worldwide income (subject to a number of exceptions and exemptions).

The ATO guide Income You Must Declare provides information on the main types of worldwide income Australian residents earn and how tax applies to that income.

The tests for whether an individual is an Australian resident for tax purposes are outlined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

The primary test is whether an individual resides in Australia according to ordinary concepts. There are also three other statutory tests.

Taxation Ruling TR 98/17 provides the Commissioner’s view on the circumstances in which individuals entering Australia, including people migrating to Australia or who are teaching or studying in Australia, will ‘reside’ here for tax purposes according to ordinary concepts.

If you are unsure about the correct disclosure of income from a foreign source we can help you, or you could go to this link and read more on the subject.