Australia

Individual - Foreign tax relief and tax treaties

Last reviewed - 12 December 2023

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

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

The Australian government plans to enter into new and updated tax treaties in the coming years. The relatively recently signed treaty with Iceland has entered into force to apply from as early as 1 January 2024. A new treaty with Portugal was signed on 30 November 2023 (yet to enter into force).

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 Organisation for Economic Co-operation and Development (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’, such as Belgium, Canada, France, India, Indonesia, Ireland, Japan, Korea, New Zealand, Singapore, and the United Kingdom.