What has changed
The ATO has issued an addendum to its ruling TR 2013/1, which covers how to identify who counts as an 'employer' when applying the short-term visit exception under Australia's tax treaties with other countries.
The addendum reflects two court decisions that changed how employment relationships are determined:
- A 2022 High Court case involving Personnel Contracting Pty Ltd
- A 2023 Full Federal Court case involving JMC Pty Ltd
The short-term visit exception
The short-term visit exception is the treaty rule that allows a non-resident working temporarily in Australia to avoid Australian income tax on their wages, provided conditions are met. Those conditions include that their employer is not an Australian resident and that the wages are not deducted against an Australian permanent establishment.
Key practical change
The ATO now uses TR 2023/4 - its ruling on who is an employee for income tax and superannuation guarantee purposes - as the reference point for applying the ordinary meaning of 'employee' when working out who the employer is under these treaties.
Application period
This addendum applies to all income years before and after its date of issue, which is 23 September 2026.
Key actions
- If your business uses non-resident workers or sends workers overseas and relies on treaty short-term visit exceptions, review the updated ruling TR 2013/1 at https://www.ato.gov.au/law/view/document?docid=TXR/TR20131A1/NAT/ATO/00001 to confirm your arrangements still qualify.
- Check TR 2023/4 - the ATO's ruling on who is an employee for income tax and superannuation guarantee - as this is now the reference used to determine the meaning of 'employee' under the short-term visit exception. TR 2023/4 is available via the ATO legal database.
- If your business operates intra-group labour arrangements involving non-resident workers coming to Australia, review the two updated examples in TR 2013/1 - Example 1 (Services to client enterprise) and Example 2 (Intra-group centralised corporate services) - to check how the ATO applies the rules to those structures.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.