U.S. Tax Treaties with Australia: Personal Services Income

Paying for certain personal services performed in the United States is exempt from US income tax if you are in the United States for a limited period of time, if you are a resident of the countries listed by the U.S. and if you meet the other conditions. Australia is in that list as well.

If the residents meet the following conditions, the income that residents of Australia get for performing personal services as independent contractors or self-employed in the United States is excluded from the U.S. income tax:

  • During the tax year, if they are in the United States for no longer than 183 days,
  • Residents who do not have an available fixed base that can be used regularly in the U.S. to run services,
  • **If the residents have a fixed base available to them, income is attributable to that fixed base.

Residents of Australia who are performing services and receiving income as employees (dependent personal services) in the United States are excluded from the U.S. income tax if they meet the requirements below:

  • Residents of Australia are in the United States for the purpose of performing services for no longer than 183 days during the tax year,
  • The income is paid by, or on behalf of, an employer who is not a resident of the United States,
  • When the taxable income of the trade or business of the employer/company in the U.S. is determining, the pay shall not be deductible.

If residents of Australia perform activities as public entertainers (such as theater, musicians, television artists, radio) or athletes are receiving net income more than $10,000, including reimbursement expenses, during the tax year in the United States, these exemptions are not applicable.

For further questions, please do not hesitate to contact us!

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