The Australian Taxation Office has issued guidelines regarding the 408 Pandemic event visa and how its tax outcomes can depend on residency status and previous visa applications.
A COVID-19 Pandemic event (Subclass 408) visa (408 Pandemic event visa) is a temporary Australian government endorsed events visa that allows workers to legally stay in Australia and continue to work during the COVID-19 pandemic.
For tax purposes in Australia, individuals will be either an Australian resident or a foreign resident.
Obtaining or moving to a 408 Pandemic event visa does not, of itself, determine or change residency status.
If tax residency changes during a financial year, tax obligations will usually change. The ATO advises that customers on the 408 Pandemic visa to closely follow the instructions when completing their tax return, including completing the question about the “Part-year tax-free threshold”.
Special rules apply if workers are a temporary resident. The ATO defines a temporary resident if workers are an Australian resident for tax purposes and satisfy the requirements of being a temporary resident. This includes holding a temporary visa granted under the Migration Act 1958.
There is no change to tax outcome in Australia if workers were previously working in Australia on a temporary visa other than a 403, 417 or 462 visa, if they moved to a 408 Pandemic event visa during COVID-19, or if their tax residency did not change.
However, different rules may apply to workers previously on a 403 visa to participate in the Seasonal Worker Program (SWP), Pacific Labour Scheme (PLS) or Pacific Australia Labour Mobility scheme (PALM), or Working Holiday Makers (WHM) previously on a 417 Working Holiday visa or 462 Work and Holiday visa.
There is no change to tax outcome in Australia if workers were previously working on a 403 Temporary Work visa to participate in the Seasonal Worker Programme and Pacific Labour Scheme or Pacific Australia Labour Mobility scheme, or if workers moved to a 408 Pandemic event visa during COVID-19.
Most people who come to Australia under the SWP or seasonal PALM scheme are foreign residents for tax purposes.
The 15 per cent tax withheld by employers continues to apply when workers move to the 408 Pandemic event visa.
A tax return does not need to be lodged if workers are a foreign resident for tax purposes working in the SWP, even if they move to a 408 Pandemic event visa.
Most people who come to Australia under the PLS and long-term PALM scheme are Australian residents for tax purposes. This is because they form a connection with Australia and intend to make Australia their home.
Australian resident tax rates continue to apply when workers move to the 408 Pandemic event visa. Employers will continue to withhold tax when they pay workers.
The ATO advises these workers to lodge their return as a resident of Australia, even if they moved to a 408 Pandemic event visa.
If workers are a Working Holiday Maker (WHM) who previously worked in Australia on a 417 or 462 visa and moved to a 408 Pandemic event visa during COVID-19 their tax outcome depends on their residency as a WHM.
If they were from a non-discrimination (NDA) country they will not have a change in tax outcome if they were a foreign resident WHM before they moved to a 408 Pandemic event visa during COVID-19, a resident WHM from an NDA country before they moved to a 408 Pandemic event visa during COVID-19, or have a change in tax outcome if they were a resident WHM not from an NDA country before they moved to a 408 Pandemic event visa.
Most people who come to Australia as a WHM are foreign residents for tax purposes. The 15 per cent WHM tax rate continues to apply when you move to the 408 Pandemic event visa. Workers don’t need to lodge a tax return or a non-lodgment advice with ATO if both of the following apply:
- All of your income was earned as salary or wages while you were a WHM.
- Your total taxable income each year was less than $45,001 for 2020–21 and later income years.
