Australia

Individual - Foreign tax relief and tax treaties

Last reviewed - 20 December 2019

Foreign tax relief

Australian-resident individuals (who are not temporary residents) are subject to Australian tax on their worldwide income, with a foreign income tax offset allowed for most foreign income taxes paid to the extent of Australian tax payable on foreign sourced and foreign taxed amounts. Such offsets are, subject to some additional restrictions, also available to non-residents.

Tax treaties

Australia has tax treaties with many countries throughout the world. Under the treaties some forms of income are exempt from tax or qualify for reduced rates. These include royalties, dividends, and capital gains.

Below is a list of countries with which Australia currently has a tax treaty:

Argentina Indonesia Philippines
Aruba * Ireland Poland
Austria * Isle of Man * Romania
Belgium Israel ** Russia
British Virgin Islands * Italy Samoa *
Canada Japan Singapore
Chile Jersey * Slovakia
China Kiribati South Africa
Cook Islands * Korea Spain
Czech Republic Malaysia Sri Lanka
Denmark Malta Sweden
Fiji Marshall Islands * Switzerland
Finland Mauritius * Taiwan
France Mexico Thailand
Germany Netherlands Turkey
Guernsey * New Zealand United Kingdom
Hungary Norway United States
India Papua New Guinea Vietnam

* Limited to allocation of taxing rights in respect of certain income derived by specified individuals, such as retirees, government employees, and students.

**  The tax treaty with Israel has been legislated in Australia, but, at the time or writing, has not yet been implemented.

Australia has also entered into bilateral agreements with a number of countries in relation to the exchange of information in relation to taxes.

Australia has enacted the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), which was signed by Australia on 7 June 2017. The MLI has been ratified, which means that it applies to ‘covered countries’ (including France, Japan, New Zealand, and the United Kingdom) from as early as 1 January 2019.