Specialist Advice on Australian Tax Residency, Dubai Income and International Tax Obligations

Moving to Dubai does not automatically end your Australian tax obligations.

While Dubai and the United Arab Emirates are known for their favourable personal tax environment, Australians living and working in Dubai may still have Australian taxation obligations depending on their tax residency, income, assets, investments, business interests and continuing connections with Australia.

Australian tax residency is not determined simply by citizenship, obtaining a UAE residence visa or spending a particular number of days outside Australia.

Chris Garlick provides specialist taxation advice to Australians living in Dubai and the UAE, expatriates, business owners, investors and professional advisers dealing with Australian tax residency and international taxation issues.

Do Australians Living in Dubai Pay Tax in Australia?

Whether you continue to pay Australian tax after moving to Dubai depends substantially on whether you remain an Australian resident for tax purposes and the nature and source of your income.

An Australian resident for tax purposes is generally required to declare worldwide income in Australia, including foreign income.

A person who becomes a foreign resident may nevertheless continue to have Australian taxation obligations in relation to Australian-sourced income and taxable Australian property.

Taxation issues may arise involving:

• Salary and employment income earned overseas
• Australian rental property
• Australian investments
• Capital gains
• Australian businesses
• Companies and trusts
• Employee share schemes
• Foreign investments
• Australian-sourced income

The first step is therefore determining your Australian tax residency position.

The ⁠Australian Taxation Office explains that tax residency is separate from citizenship and immigration status and is determined under specific residency tests.

Australian Tax Residency When Moving to Dubai

Simply moving to Dubai does not necessarily mean that you cease being an Australian resident for tax purposes.

Australian tax residency requires consideration of the applicable residency tests and your individual circumstances.

Relevant matters may include:

• Your living arrangements in Dubai
• Whether your relocation is temporary, long-term or indefinite
• Family and personal connections
• Employment arrangements
• Australian accommodation or property
• Financial and business interests
• Overseas living arrangements
• The frequency and purpose of visits to Australia
• Your intentions and circumstances surrounding the move

Two Australians who both move to Dubai may therefore have very different Australian taxation outcomes.

For more detailed information about Australian residency principles, see ⁠Tax Residency Lawyer Australia.

Dubai Salary and Worldwide Income

If you remain an Australian resident for tax purposes, you generally need to declare your worldwide income in your Australian tax return.

Depending on your circumstances, this may include:

• Salary earned while working in Dubai
• Business or professional income
• Investment income
• Dividends and interest
• Foreign investment income
• Employee share benefits
• Income involving overseas companies or structures

The fact that income is earned or received while you are living in Dubai does not, by itself, determine whether that income falls outside the Australian taxation system.

Your residency position and the nature and source of the income must be considered.

The ⁠Australian Taxation Office provides further information about foreign and worldwide income.

Australian Property and Investments After Moving to Dubai

Becoming a foreign resident for Australian tax purposes does not necessarily end all Australian tax obligations.

Issues may continue to arise in relation to:

• Rental income from Australian property
• Capital gains involving taxable Australian property
• Australian business income
• Australian investments
• Withholding tax
• Companies and trusts
• Other Australian-sourced income

Australians moving to Dubai should therefore consider the taxation consequences of retaining Australian property, investments and business interests.

Capital Gains Tax When Leaving Australia

Changing your Australian tax residency can have important capital gains tax consequences.

Depending upon the assets you hold and your circumstances when you cease Australian tax residency, CGT consequences may arise when you leave Australia.

Further CGT issues can arise when Australian assets are retained and subsequently sold while you are living overseas.

Obtaining advice before relocating can be particularly important because decisions made at the time of departure may have taxation consequences that only become apparent later.

Australian Companies, Businesses and Trusts

Moving personally to Dubai does not necessarily move your company, business or trust outside the Australian taxation system.

Particular care may be required if you:

• Own or control an Australian company
• Operate an international business
• Are involved with Australian or overseas trusts
• Make significant business decisions while living overseas
• Receive company or trust distributions
• Hold substantial overseas investments
• Establish a company or business structure in Dubai or elsewhere in the UAE

Company residency, management and control, the source of income and Australia’s international taxation rules can create complex issues.

For advice concerning broader cross-border taxation matters, see ⁠International Tax Lawyer Australia.

Does Australia Have a Tax Treaty With the UAE?

Australia has income tax treaties with many countries. However, the United Arab Emirates is not currently included on Australia’s list of income tax treaty jurisdictions.

This makes it particularly important not to assume that taxation outcomes applicable to Australians living in other countries will automatically apply to Australians living in Dubai.

Australian domestic taxation law, including the Australian tax residency rules, may therefore be particularly important when determining your Australian tax obligations.

The current list of Australia’s treaties can be checked directly through the ⁠Australian Treasury’s Income Tax Treaties information.

ATO Reviews and Tax Residency Disputes

Tax residency can become the subject of an Australian Taxation Office review or audit, particularly where an individual has substantial income, assets, business interests or continuing connections across multiple countries.

A dispute may concern whether an individual actually ceased Australian tax residency and, if so, when the change in residency occurred.

Chris Garlick advises and represents clients in matters involving:

• ATO tax residency reviews
• Residency audits
• Amended assessments
• Objections to ATO decisions
• International taxation disputes
• Administrative Review Tribunal proceedings
• Federal Court taxation matters

Obtaining specialist advice early may assist in establishing the relevant facts, protecting your position and developing an appropriate response strategy.

Before Moving From Australia to Dubai

Ideally, Australian taxation advice should be obtained before relocating to Dubai.

Issues that may need to be considered include:

• Your likely Australian tax residency status
• Your proposed living arrangements in Dubai
• Australian property and investments
• Capital gains tax consequences
• Australian and overseas companies
• Businesses and trusts
• Foreign and Australian income
• Employee share schemes
• Record keeping and reporting requirements

Planning before departure may identify taxation issues that could otherwise emerge months or even years after leaving Australia.

Already Living in Dubai?

If you have already relocated to Dubai, your Australian taxation position can still be reviewed.

This may be particularly important if you:

• Continue to own Australian property
• Regularly return to Australia
• Have family or significant personal connections in Australia
• Operate or control an Australian business
• Receive Australian income
• Have Australian or overseas companies or trusts
• Retain significant Australian investments
• Are uncertain whether previous Australian tax returns correctly reflected your residency status
• Have received correspondence from the ATO concerning your residency or foreign income

Tax residency is highly dependent upon individual circumstances. Your position should therefore be assessed using your actual circumstances rather than simply assuming that living in Dubai makes you a foreign resident for Australian tax purposes.

Returning to Australia From Dubai

Returning to Australia can also create taxation issues.

Depending upon your circumstances, these may involve:

• Re-establishing Australian tax residency
• Overseas investments
• Foreign income
• Companies and trusts
• Capital gains tax
• International assets
• Reporting obligations

Obtaining advice before returning to Australia may assist in identifying taxation consequences and dealing with international assets and structures before Australian residency is re-established.

Why Obtain Specialist Australian Tax Advice?

Australian tax residency and international taxation matters can have significant financial consequences.

Specialist taxation advice may assist you to:

• Clarify your Australian tax residency position
• Understand Australian tax obligations while living in Dubai
• Identify potential capital gains tax consequences
• Address Australian property and investment income
• Consider company and trust taxation issues
• Review foreign income obligations
• Respond to ATO enquiries or audits
• Manage international taxation risks
• Protect your legal position in a taxation dispute

Speak With Chris Garlick

If you are living in Dubai, planning to move from Australia to Dubai, or returning to Australia from the UAE, obtain advice about your Australian taxation position based on your individual circumstances.

Chris Garlick provides specialist advice and representation in Australian and international taxation matters involving tax residency, foreign income, capital gains tax, companies and trusts, Australian investments, ATO reviews and taxation disputes.

⁠Contact Chris Garlick to discuss your Australian tax residency or international taxation matter.

Chris Garlick — Barrister at Law
International and Domestic Taxation Law
Australia-wide and international consultations available

Tax Residency Lawyer Australia

Specialist Advice on Australian and International Tax Residency

Determining whether an individual is an Australian tax resident can have significant taxation consequences. Residency status affects how income is taxed, whether foreign income must be declared in Australia, access to tax concessions, capital gains tax obligations and reporting requirements.

Australian tax residency rules are complex and often involve detailed consideration of a person’s living arrangements, employment, family connections, travel patterns, financial interests and long-term intentions.

Chris Garlick provides specialist advice on Australian and international tax residency issues for individuals, business owners, expatriates, foreign investors, trustees and professional advisers. He advises clients on residency planning, residency disputes and matters involving the Australian Taxation Office.

Australian Tax Residency Rules

Australian tax residency is not determined solely by citizenship, visa status or the number of days spent in Australia.

The Australian Taxation Office and the courts may consider a range of factors, including:

• Physical presence in Australia
• Family and personal connections
• Employment arrangements
• Ownership or use of property
• Financial and business interests
• Overseas living arrangements
• Intention and purpose of travel

Each case depends on its particular facts and circumstances.

Moving Overseas and Ceasing Australian Tax Residency

Individuals relocating overseas often assume they automatically become non-residents for Australian tax purposes. In many cases this assumption is incorrect.

Establishing non-resident status may require careful consideration of:

• Permanent relocation arrangements
• Overseas accommodation
• Employment contracts
• Family relocation
• Australian assets and interests
• Ongoing Australian connections

Obtaining advice before relocating may assist in avoiding unexpected tax consequences.

Returning to Australia

Returning Australian residents may face taxation issues relating to:

• Foreign income
• Overseas investments
• Capital gains tax
• Foreign companies and trusts
• International reporting obligations

Advice obtained before returning to Australia may assist in identifying potential taxation issues and available planning opportunities.

ATO Residency Audits and Disputes

The Australian Taxation Office regularly reviews residency arrangements involving high-income earners, expatriates, international business owners and individuals with significant overseas interests.

Chris advises clients involved in:

• ATO residency reviews
• Residency audits
• Objections to ATO decisions
• Tax residency disputes
• Administrative Review Tribunal proceedings
• Federal Court taxation matters

Early advice may assist in protecting your position and developing an effective response strategy.

Double Tax Agreements

Australia has entered into Double Tax Agreements with numerous countries. These agreements may affect how income is taxed and assist in reducing double taxation.

Issues commonly arise involving:

• Employment income
• Business income
• Investment income
• Capital gains
• Pension and retirement income
• Cross-border transactions

Careful analysis is often required where more than one country claims taxing rights.

Why Obtain Specialist Tax Residency Advice?

Tax residency issues can involve significant financial consequences and often require consideration of both Australian legislation and international taxation principles.

Obtaining specialist advice may help:

• Clarify residency status
• Manage taxation risks
• Reduce uncertainty
• Avoid double taxation
• Respond to ATO enquiries
• Protect legal rights during disputes

Speak With Chris Garlick

If you require advice regarding Australian tax residency, non-resident status, international taxation issues or an ATO residency dispute, contact Chris Garlick to discuss your circumstances.