Interpreting DTAs - When Personal & Economic relations are important to Dual Tax Residency

Updated: Feb 3

Dual tax residency has been a steadily increasing phenomenon over the years. This is due to global connectedness, which has seen clients able to travel more quickly and affordably than what was possible a generation ago.

The internet age has also created the ability for clients to stay connected (and productive) with offices in overseas countries, while living in a second country.

The COVID19 pandemic has accelerated this shift. For the foreseeable future it is increasingly likely that Australian expat clients could find themselves a 'dual resident' for tax purposes.

This can occur in situations where the client has returned to live in Australia for a time (for example, to shelter from the pandemic), while maintaining a home, and often a job, overseas.

Whether a client becomes a tax resident while they are temporarily in Australia is the subject of another blog post, which readers can view here.

If you have a client who has become a tax resident of Australia, but is also a tax resident of another country, difficult issues can arise. For example, it will not be possible to properly prepare the client's Australian income tax return without considering the impact of Double Tax Agreements (DTA).