An Australian resident is generally taxable on income from all sources, that is worldwide. You may get credit for tax paid in other countries and any foreign rebates (such as imputation credits) that you receive will be passed on in Australia, but if you do have income from offshore you do need to declare it to Australian Tax Authorities.

This is why there are so many dodgy outfits running around trying to convince you to invest offshore secretly, you'll need an anonymous bank account or to invest via complicated vehicles that obscure the original owner of the money. If you had huge amounts of money and you could get away with it you may well have an interest in investing in a discrete foreign fund, and Swiss banks have for years (and for a very high fee) been helping people do that - although these days due to pressure from, among others, the United States IRS, they aren't as willing to help cheats any more and the practice is not as common as it used to be.

If you don't have millions of dollars sitting around genuine offshore bankers would not be bothered with your little account, these guys handle huge sums of money and a million isn't much by their standards. Those people that call you up with an unsolicited phone call to offer you a tax dodge service or advertise these schemes in newspapers or the Internet are therefore just common crooks that intend merely to steal your money rather than invest it.

If you have only a little bit of money you would have little need to get involved with an offshore investment group, it wouldn't be the effort and the huge fees. Why put yourself at risk of huge financial losses and/or criminal tax fraud charges for the few thousand dollars tax you would pay in Australia? If you were shifting large amounts of money though, sophisticated money tracking systems designed to defeat money laundering would most likely detect the transfer, and in the unlikely event that the promoter of the offshore scheme does not just vanish with your money you may be found out by the ATO, and charged with tax evasion.

Salary or wages that are derived and taxed overseas by an Australian resident are generally exempt from further tax in Australia if the period of overseas service exceeded 90 days. However the exempt income is taken into account to calculate an average tax rate payable on other Australian income.

Where Australian residents control foreign companies or have transferred assets to foreign trusts, their foreign income is taxed according to an accrual system.

Thus residents are taxed in Australia on at least some of this income, regardless of whether or not any dividends or distributions have actually been made. On the other hand, if the income has already been taxed in a comparable tax country the income may be exempt from further tax in Australia.

Where an Australian resident pays tax on foreign income that is taxable in Australia, a tax credit equal to the foreign tax he or she has paid is allowed.

Under the foreign tax credit legislation, such a credit is limited to the lesser of the foreign tax paid or the amount of the Australian income tax referable to the foreign source income. A taxpayer with excess credits can carry them forward for a maximum of five years and apply them against tax payable on the same class of foreign income.