17 Aug 2009

Australian sourced Income

by Darren

In Australia it is important to identify the source of income as foreigners are only taxed on income sourced within Australia. Source rules take into account a number of factors for example the sale of goods in Australia will take into account the place where the sales contract was entered as well as where the goods were purchased, produced or manufactured. In cases where income has multiple sources, the dominant factors need to be determined and If necessary, the income must be apportioned. The below are specific types of income and a guide to their general source: Wages or salary, professional fees - The source of remuneration is where the duties or services are performed. Trading or business profits - The source of profits is generally determined by reference to the place where the business trades or provides services. Interest - The source is generally the place where the loan contract was made or the credit was given. Dividends - The source of a dividend is where the company made the profits for the dividend to be paid. In the next entry on Australia we will examine different types of income that are sourced in Australia and see how they are taxed for a resident as well as a non-resident.

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Previous entry: China’s Residency Rules

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