If you're earning money from overseas and not telling the ATO, you're playing with fire.
This isn’t just something that affects CEOs or world travellers. It’s about you. Whether you’re freelancing for a client in the US, earning rental income from a property in Europe, or dabbling in international shares, it all counts.
And if that foreign income isn’t showing up on your tax return, the ATO sees that as a problem. A serious one.
You might think it’s small, or that no one’s going to notice. But the truth is, they do notice, and not reporting it could land you with penalties you didn’t see coming. So, before you file and forget, let’s talk about what foreign income actually means and why ignoring it isn’t worth the risk.
What Is Considered Foreign Income?
Foreign income isn’t just some niche tax category. It’s any income you earn from sources outside Australia. This can include:
Working remotely for an overseas company
Getting paid by international clients for freelance work
Earning dividends from foreign shares
Collecting rent from a property abroad
Even receiving a pension or benefit from a foreign government
If you’re thinking, “But I wasn’t in another country,” that doesn’t matter. It’s not about where you physically were, it’s about where the money came from.
Who Must Declare Foreign Income?
Yes. You absolutely do.
As long as you are considered an Australian resident for tax purposes, you must report all income, no matter where in the world you earned it. There is no lower limit or hidden loophole. Whether it’s $50 or $50,000, it needs to go on your tax return.
You might not feel like a global earner, but the ATO doesn’t see it that way.
ATO Rules for Tax on Overseas Income
The simple answer? It’s about fairness and transparency.
The ATO wants everyone to be taxed according to their total income, no matter where it came from. If you’re benefiting from services and infrastructure in Australia, the government expects a fair contribution.
Plus, Australia has tax treaties with a bunch of other countries. These agreements help you avoid paying tax twice on the same income. But there’s a catch: to get those tax credits or offsets, you have to declare the foreign income first.
So in a way, reporting that income could actually save you money, if you play by the rules.
Want to Learn More? Check Out These Sections on Our Website
We’ve only scratched the surface here. If you’re wondering how to actually go about declaring your foreign income or want to avoid the most common mistakes, we’ve got the full guide for you:
How to Report Foreign Income: Step-by-step instructions to make sure you’re doing it right.
Common Mistakes to Avoid: Learn from the errors others have made so you don’t have to.
To read the full blog and get all the essential info, head to our website [https://cleartax.com.au/tax/personal-tax/declare-foreign-income/] and get the details that could save you from an expensive mistake.
Final Word
If you’ve got income coming in from overseas, even just a trickle, you need to take it seriously. The ATO doesn’t care how small or whether it was “just a one-time payment.” If it’s income and you’re a tax resident here, it needs to be reported.
Don’t leave it to chance. Get informed, get prepared, and make sure you’re ticking all the right boxes.
Got foreign income? Make it your business to declare it, because the ATO already considers it theirs.
Ready to dive deeper?
Read the complete blog on our website here:
https://cleartax.com.au/tax/personal-tax/declare-foreign-income/
https://cleartax.com.au/tax/business/starting-a-business/
https://cleartax.com.au/tax/business-tax/are-you-ready-for-gst/
