When people talk tax, they usually lead with their visa: “But I’m a citizen.”, “I’m a permanent resident.”, “My visa has ended.”
Yet in tax, the visa is often not the deciding factor. Both Korea and Australia ask one question — “Where do you actually live?”
And the answer decides almost everything — foreign-income reporting, capital gains tax (CGT), dividend income, superannuation, reverse migration, overseas assets. The starting point for all of it is your tax residency.
The short version
- Tax residency is decided by your real circumstances, not your visa.
- Australia and Korea each have different residency tests.
- You can be treated as a resident of both at once.
- In that case the Korea–Australia tax treaty decides.
- For reverse migration and overseas-asset tax, the key is when your residency changes.
Why residency decides everything
Sell the same Australian house and the tax can differ completely depending on whether you’re an Australian resident, a Korean resident, or both. The same applies to Korean dividends. That’s why residency is the hinge of tax — the pivot that decides which way the door swings.
What is an Australian tax resident?
Australia looks at your actual circumstances, not citizenship or visa. The definition of “resident” sits in the Income Tax Assessment Act 1936 (Cth), s 6(1), and the ATO’s current view is in TR 2023/1. The main tests:
1. Resides test
The most important. It weighs where you actually live, where your family is, where you work, and where your base of life is.
2. Domicile test
Whether your domicile (permanent base) is Australia. If your family and home are in Australia and you intend to return, you can be an Australian tax resident even after a long time abroad.
3. The 183-day test
A common misconception. “183 days and you’re automatically a resident” — half true, half false. The 183 days is just one factor, considered alongside others.
(A fourth test, the Commonwealth superannuation fund test, applies only to certain government employees.)
What is a Korean tax resident?
Korea also doesn’t decide on visa or nationality alone. Article 1-2 of the Income Tax Act defines a resident as an individual who has a domicile in Korea or has had a place of residence in Korea for 183 days or more, with domicile/residence judged under Enforcement Decree art. 2 (objective facts of life — family sharing a household, domestic assets, and so on).
So it’s not just “did you stay long?” but “is the centre of your life in Korea?”
Can a citizen still be a non-resident?
Yes. An Australian citizen who permanently settles in Korea, with family and base of life there, can become an Australian non-resident. Conversely, a Korean citizen living long-term in Australia, with family and work there, can become an Australian tax resident.
You might be a resident of both
This is the hardest part for many. If you hold both a Korean home and an Australian home, with family in Korea and a business in Australia, both countries may treat you as a resident. That’s dual residency.
So which country’s resident are you?
Here Article 4 of the Korea–Australia tax treaty applies a tie-breaker, in this order:
- Permanent home → 2. Centre of vital interests → 3. Habitual abode → 4. Nationality → (and if still unresolved, mutual agreement between the two tax authorities).
Through cases
- Case 1 — Australian PR returning to Korea: even keeping the visa, you can become a Korean tax resident.
- Case 2 — Remote work for a Korean company (Korean national, living in Australia, paid from Korea): both countries may see you as a resident, so the treaty matters.
- Case 3 — Preparing to return (holding a Sydney home, back to Korea, selling two years later): the key question isn’t “when did you sell” but “which country’s resident were you then?”
When does residency change?
It’s less clear-cut than people think. Korea sets the timing in Enforcement Decree art. 2-2 — for example, when a resident departs to move their domicile abroad, they become a non-resident on the day after departure. Australia, by contrast, has no single trigger date and decides case by case, weighing your purpose in leaving, plans to return, family, home, and work (TR 2023/1). So you can’t simply say “non-resident the day I fly to Korea” or “resident the day I land in Australia.”
The misconceptions people hold most
- ❌ “PR means Australian resident.” — No.
- ❌ “Under 183 days means non-resident.” — No.
- ❌ “Citizenship means automatic resident.” — No.
- ❌ “Visa ends, residency ends.” — Not necessarily.
Why this matters
Everything you’ll read next — Australia’s CGT discount and Korea’s 5-year rule, what happens to your super back in Korea, buying Korean shares from Australia — comes back to one question: which country’s tax resident am I right now? The moment that answer changes, the tax can change with it.
Legal references
- 🇦🇺 Australian residency — Income Tax Assessment Act 1936 (Cth) s 6(1) (‘resident’ definition: resides, domicile, 183-day, Commonwealth super tests). ATO view: TR 2023/1 (ATO · s6 text).
- 🇰🇷 Korean residency — Income Tax Act art. 1-2 (resident: domicile or 183+ days’ residence). Domicile/residence: Enforcement Decree art. 2. Timing of becoming/ceasing: Enforcement Decree art. 2-2. (Korea Law Information Center, law.go.kr)
- 📜 Dual-residency tie-breaker — Korea–Australia Tax Convention (signed 1982), Article 4 (Residence) (ATO synthesised text).
In closing
Many treat tax as a question of rates. But in cross-border tax there’s a more important question — “where am I a resident?”
The moment that answer changes, CGT, dividend tax, foreign income, super, and reverse migration can all change with it. To understand money between Korea and Australia, start with tax residency.