Income tax: are overseas students who are in Australia on short-term vocational experience entitled to a tax-free threshold?

As non-residents, overseas students who are in Australia on short-term vocational experience are not entitled to a tax-free threshold. Although each case must be decided on its merits these students are almost always non-residents. Only rarely would a vocational experience student meet the tests of residency set out in subsection 6(1) of the Income Tax Assessment Act 1936. Guidelines on applying these residency tests are set out in IT 2607.

Some of Australia's international tax agreements have provisions that specifically relate to students, but these provisions only refer to income derived outside of Australia. There are no provisions in Australia's international tax agreements that provide vocational experience students with a tax-free threshold.

As non-residents the vocational experience students have no tax-free threshold and are taxed from the first dollar of income derived in Australia. (Income Tax Rates Act 1986)