Proposed Australian Tax Residency Rule Changes – Hong Kong

Proposed Australian Tax Residency Rule Changes – impact for Hong Kong residents.


Northland Group hosted a webinar with Matthew Jones of Oreana Financial Services, discussing proposed changes to the Australian tax residency rules and impacts on Australian expats living in Hong Kong.

In May 2021, the Australian federal government proposed to update the Australian Residency Criteria. The proposed changes look quite simple and easy to understand, however, the devil is in the detail.

The proposed changes include a two-step model to determine if you are considered an Australian resident for tax purposes with the bright line test and the factor test.

Bright line test – if you spend 183 days or more of an income year in Australia, you are considered tax resident or

Factor test – if you spend 45 days or more of an income year in Australia and satisfy 2 of the following 4 factors, you are considered a tax resident:

1.     Right to reside permanently in Australia

2.     Australian accommodation

3.     Australian family

4.     Australian economic interest (including real property and substantial economic interest)

Should these proposed changes go ahead many Australian expats may consider making changes to their assets in Australia or time they spend in Australia (for work or personal travel) to continue with their current tax residency status.  The proposal will go through a consultation period and various stages before coming into effect.

View the webinar to hear more about the proposed bright line test, four factor tests, how the number of days are calculated and other general questions and answers Australian expat should be aware of – particularly if you are living in Hong Kong.  (Webinar 4 August 2021). Or contact us.

Note: This information and the webinar is general in nature and does not constitute advice. The information does not take into account your objectives, financial situation or needs and you should seek independent advice to see if the solution is appropriate for you.

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