Source of Employment Income during the COVID19 crisis

Updated: Feb 3

The ATO has recently updated its guidance on the Australian tax residency issues associated with Australian expats who have found themselves temporarily in Australia due to the COVID19 pandemic.


The initial guidance from the ATO issued on 27 March 2020 was that an Australian who was a non-resident for income tax purposes and who found themselves in Australia temporarily because of COVID19 would not be treated as being a resident of Australia provided that they usually live overseas and intend to return as soon as they are able to.


That guidance has now been expanded to include several examples in a ‘question and answer’ format all of which can be read at this link.


In this blog we have focused specifically on one of the Q and A’s because it raises the critical issue of ‘source of employment income’, an issue which in practice clients may be likely to be unaware of or completely overlook given the stresses of the pandemic.


Question

“I am not an Australian resident. I am staying in Australia for longer than I expected because of COVID-19 what are my Australian tax obligations?”


ATO answer

“If you are not an Australian resident for tax purposes, you will be as