Private ruling: Residency for tax purposes
Published: September 2012
Ruling period: Year ending 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Question and answer | Are you a resident of Australia for taxation purposes? | Yes.

Relevant facts and circumstances: You are a citizen of Australia. You were born in Australia. You are in Australia for more than 183 days in any financial year. You work 28 days on and 28 days off. You intend to visit an overseas country during your time off work. You will stay with friends in the overseas country. You rent a property in Australia. You have bank accounts in Australia and no other assets in Australia or any other country. You have family in Australia and a family member overseas. You consider Australia your home and you intend to live and work in Australia into the future. You have never been a Commonwealth Government employee.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1). | Income tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1997 Subsection 995-1(1).

Reasons for decision: Summary: Generally where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions and provides four tests to ascertain the residency status. Relevant to your situation are the first two tests which are examined in detail in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. In examining these tests, IT 2650 provides a number of factors which assist in assessing a taxpayer's situation against the tests. A copy of this ruling is available from www.ato.gov.au. | Detailed Reasoning - The resides test: Whether the individual resides in Australia according to the ordinary meaning of the word resides. In your case you live and work in Australia. You intend to visit an overseas country during your time off work. You will be in Australia for more than 183 days in any financial year. You do not intend to live permanently overseas and will stay with friends during your visits overseas. Your ties to Australia are closer than to the overseas country as your family are in Australia and you rent a home in Australia. Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax purposes. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia. Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. Your domicile is Australia. In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia because: You live and work in Australia You maintain a home in Australia You do not intend to make any other country your home Therefore, you are a resident of Australia under this test. Your residency status As you meet the resides and domicile tests, you are considered to be a resident of Australia for tax purposes. As a resident of Australia for taxation purposes you are required to declare all your income both in and out of Australia in your Australian tax return.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.