Final answer:
Australians must pay tax on worldwide income if they are tax residents, while foreigners must pay tax on Australian-sourced income. Tax laws and residency status can influence tax obligations, and they are subject to change through political processes.
Step-by-step explanation:
Understanding Tax Obligations in Australia and for Foreigners:
For Australians, the requirement to pay tax on income earned outside of Australia depends on their residency status for tax purposes. If they are considered to be Australian residents for taxation, they are subject to Australian tax on their global income, which includes income earned within and outside of Australia. Conversely, for foreign individuals, they are typically required to pay Australian tax on income that is earned within Australia. Income generated from sources outside of Australia is usually not taxed unless the individual is a resident for tax purposes.
Every year, taxpayers must declare their income, and the government uses this tax revenue to finance various government programs and public services. In the case of Australia, the Australian Taxation Office is the equivalent to the Internal Revenue Service in the United States, overseeing the collection of taxes and enforcement of tax laws. It is important to note that tax laws can vary significantly from one country to another, and they can be affected by various factors, including political decisions.
Foreigners working in Australia or earning Australian-sourced income must comply with Australian tax laws. Such laws require income tax to be paid on any income earned within the country, regardless of the taxpayer's country of origin. Similarly, Australian expatriates working abroad may have to pay tax on their foreign earned income, depending on their residency status for Australian tax purposes.