On Wednesday 24 August 2022, Assistant Treasurer and Minister for Financial Services Stephen Jones reminded us that the proposed changes to Australia’s tax residency rules are currently under review by the government, as is the controversial “45-day rule”.

The Australian Financial Review has reported that, while speaking at an Australian Chamber of Commerce event to those of the Australian and Singapore business community, Assistant Treasurer Jones said the new rules for deciding Australian tax residency were in the “government’s in-tray” ahead of the October budget, and the day limit was “being looked at”.

The proposed amendments have been criticised as being overwhelmingly unfavourable to those Australian expats who reside in a country that does not have a double-tax agreement (tax treaty) with Australia. If these changes were to go ahead, many Australian expats would onerously be treated as tax residents if they spend at least 45 days in Australia in an income year.

It was in May 2021 that the proposed amendments to Australia’s tax residency rules were included in the then Liberal-National Coalition government’s budget papers. Since that time, we have had a change of government and have been waiting to see whether the new Labor Party Government will pick up with the proposed changes from where the former had left off. Assistant Treasurer Jones has now indicated that the proposed amendments may now again be raised in the forthcoming October budget, we hope this time without the 45-day rule.

You are able to watch an in-depth analysis of the proposed amendments to Australia’s tax residency rules here.

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