Yes, in most cases you do. Many Australians living overseas assume their Australian tax obligations disappear if they have no salary, no rental income, and no investment property back home. That assumption is wrong once an ABN or trust structure is in the picture. An active ABN can generate assessable income, a discretionary trust can distribute taxable amounts to non-resident beneficiaries, and both sit squarely within the ATO’s lodgment and reporting framework regardless of where you live. Understanding this intersection is exactly what separates comprehensive Australian expat tax guidance from generic information that leads to missed lodgments, penalty notices, and unexpected bills.
TL;DR
- An ABN or trust does not become dormant just because you leave Australia; both can trigger a lodgment obligation.
- Non-resident tax rates in Australia apply from the first dollar of Australian-sourced income with no tax-free threshold [3].
- Trusts with non-resident beneficiaries attract specific ATO scrutiny, particularly around withholding obligations.
- Cancelling or winding up structures you no longer use is often the cleanest solution, but it requires careful sequencing.
- Filing a non-resident tax return in Australia is not optional if assessable income or a trust distribution exists.
Why Does an ABN Create a Tax Obligation If You Have No Australian Income?
An ABN signals to the ATO that you are, or intend to be, conducting a business enterprise in Australia. The critical word is “intend.” You do not need to have earned a cent for the ABN to keep your lodgment obligation alive. Here is why this matters in practice:
- The ATO’s systems flag ABN-linked Tax File Numbers for annual review. If your ABN remains active and you do not lodge, the ATO may issue a failure-to-lodge penalty or commence a review.
- An ABN attached to a sole trader structure means the ATO treats your TFN as a business taxpayer. Even a nil income year typically requires a tax return to confirm no activity occurred.
- GST registration linked to your ABN can compound the issue. Quarterly BAS lodgments may still be outstanding even if your turnover is zero, because the ATO expects a nil lodgment, not silence.
The practical fix for an abandoned ABN is straightforward: cancel it through the Australian Business Register if the enterprise has genuinely ceased. That single administrative step removes the annual reporting trigger. However, cancellation must be timed correctly if the ABN ever generated income, because outstanding returns must be lodged first.
How Are Non-Resident Tax Rates Applied to ABN Income?
Building on the obligation question, the next logical concern is how much you would actually owe if the ABN did generate income while you were overseas. Non-residents do not access the tax-free threshold that Australian residents receive [2]. For the 2025-26 financial year, non-resident individuals are taxed at a flat rate of 30% on the first $135,000 of Australian-sourced income, with higher marginal rates applying above certain thresholds [3]. Every dollar of ABN income is assessable from dollar one [2].
This matters because many expats running small consulting or freelance activities via their ABN assume a handful of invoices sent to Australian clients will sit below any meaningful tax threshold. They do not. A non-resident tax return in Australia must capture that income, and it will be taxed at non-resident rates from the first dollar earned [3].
Do Trusts Create Non-Resident Tax Obligations Even Without Distributions?
A separate but closely related question concerns trusts, and the answer here is more nuanced than the ABN scenario. The ATO’s treatment of a trust with non-resident connections depends on several variables:
| Scenario | ATO Treatment | Lodgment Required? |
|---|---|---|
| Trust has Australian-sourced income, non-resident beneficiary receives a distribution | Distribution taxed at non-resident rates in the beneficiary’s hands; trustee may need to withhold | Yes, trust tax return and likely a non-resident beneficiary return |
| Trust has Australian-sourced income, no distribution made (income retained by trustee) | Trustee assessed at top marginal rate on undistributed income | Yes, trust tax return required |
| Trust is dormant, no income, no distributions | ATO may still expect a nil trust return if the trust is registered | Typically yes, to confirm nil activity |
| Non-resident is trustee but all beneficiaries are Australian residents | May trigger additional scrutiny; trustee residency affects trust’s tax residency in some structures | Yes, trust tax return required |
The trustee withholding obligation deserves particular attention. Where a trust makes a distribution to a non-resident beneficiary from Australian-sourced income, the trustee may be required to withhold tax at the applicable non-resident rate before the distribution is paid [1]. Failing to withhold correctly exposes the trustee, not just the beneficiary, to ATO liability.
What About a Trust That Holds No Property and Has Never Traded?
Stepping back from the technical detail, a separate concern is the “empty” trust. Many Australian expats set up discretionary trusts years ago on the advice of a generalist accountant, never funded them with assets, never made distributions, and have since moved overseas and forgotten the structure exists. These trusts still have legal existence and, in most cases, an active TFN registered with the ATO.
An unfunded, non-trading trust with a registered TFN will typically still require a nil trust tax return each year until it is formally wound up. Winding up a trust is a legal process involving the trust deed, distribution of any remaining assets, and a final tax return. ODIN Tax works alongside legal professionals to coordinate this sequencing correctly, since getting the final return wrong can crystallise unexpected tax positions.
How Does the ATO Actually Find Non-Residents with These Structures?
A reasonable question is whether the ATO has the practical capacity to pursue non-residents with small ABNs or dormant trusts. The answer, increasingly, is yes [1][4]:
- Cross-border data sharing: Australia participates in the Common Reporting Standard (CRS) and the Automatic Exchange of Information (AEOI) framework. Financial data from over 100 jurisdictions flows to the ATO annually [4].
- Australian bank accounts: If your ABN or trust holds an Australian bank account, the ATO receives that interest and balance data directly.
- ABN and TFN linkage: Every active ABN is linked to a TFN, and TFN activity is monitored against lodgment history.
- Payer reporting: If any Australian business paid your ABN for services, they reported that payment to the ATO in their own tax return.
The practical reality is that the ATO’s data matching capability has expanded significantly. The days of assuming that geographic distance equals practical invisibility are over.
What Is the Smartest Way to Resolve This Before It Becomes a Problem?
The most effective approach is to audit your Australian structures before the ATO audits you. Specifically:
- Identify every active ABN, trust TFN, and company TFN linked to your name. You can check ABN status on the Australian Business Register using your TFN.
- Establish which structures generated income in any open lodgment year (generally the last four years for standard cases, longer if fraud or avoidance is involved).
- Lodge any outstanding nil or income returns to close off the ATO’s open compliance window.
- Cancel or wind up structures you no longer need, following the correct legal and tax sequencing.
- Seek written confirmation from the ATO (via your tax agent) that accounts are clear before treating the matter as resolved.
This is precisely the type of work where specialist Australian expat tax support delivers its clearest return. Generalist accountants often miss the interaction between trust deed terms, non-resident withholding rules, and the ATO’s lodgment history system. ODIN Tax handles exactly this type of multi-year, multi-structure cleanup for non-residents regularly, coordinating lodgments, penalty negotiations, and final wind-ups as a single managed process.
Frequently Asked Questions
About ODIN TaxODIN Tax is Australia’s specialist tax agent practice for Australian expats and non-residents, and part of the ODIN Group alongside Odin Mortgage. Headquartered in Hong Kong and serving clients across 40+ countries, ODIN Tax prepares non-resident tax returns, resolves years of overdue lodgments, and advises on complex residency and trust structures that generalist accountants routinely handle incorrectly. Led by Tax Director Pau Lam with over ten years of specialist experience, ODIN Tax holds a 4.9/5 Google rating from more than 330 verified client reviews. As a Registered Australian Tax Agent, ODIN Tax operates within the full regulatory framework of the Australian tax system, bringing the lived experience of being an expat together with deep technical knowledge of the ATO’s non-resident rules.
Have an ABN or trust you haven’t thought about in years? Now is the right time.ODIN Tax helps non-residents untangle complex ABN and trust situations, lodge outstanding returns, and close off ATO compliance exposure before it becomes a penalty notice. Visit www.odintax.com to book a confidential consultation with a Registered Australian Tax Agent who works exclusively with expats and non-residents.
Disclaimer: This article contains general information only and does not constitute personal tax advice. Tax obligations vary based on individual circumstances, the specific terms of your trust deed, your residency status, and the relevant financial year. All figures referenced apply to the 2025-26 financial year unless otherwise stated. Please consult a Registered Australian Tax Agent for advice specific to your situation.
References
- Australian Tax for Non-Residents: Key Taxation Rules … (www.symmetryconsulting.com.au)
- Australian tax: A guide for foreigners and expats (www.expertsforexpats.com)
- Non-Resident Tax Rules for Australia – ACT Tax Group (acttaxgroup.com.au)
- Expat Tax in Australia-Everything You Should Know (titanwealthinternational.com)
