Private ruling: Your residency status
Date of advice: 1 July 2016
Published: August 2016
Ruling period: Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019
Date scheme commenced: 1 July 2015

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: No.

Relevant facts and circumstances: You are a citizen of Australia. Your country of origin is Australia. You are a current employee of the Australian Public Service (APS). You intend to resign from the APS to undertake an ongoing locally engaged staff position at the Embassy of Australia in a foreign country. You note that in accordance with the terms and conditions of employment locally engaged "…employees are not Australian Public Service employees, and the terms and conditions of employment pertaining to Australian Public Service employees are excluded under this type of employment." As at the commencement of your locally engaged staff position, you intend to move permanently to the foreign country and set up a permanent home in that country. In order to live permanently and work in the foreign country you will obtain an appropriate Diplomatic Visa, which is provided to full-time employees assigned by a government, coming only to work at a foreign embassy or consulate in the foreign country to perform duties which take place at an embassy. You are currently a member of the Public Sector Superannuation Accumulation Plan (PSSap). However once you resign from the APS in month 20XX you understand that you will cease to be an active member of this scheme (i.e. no employer or self-contributions will be made into this Scheme). In your new position all salary and related payments are calculated and paid in foreign currency and will be paid into a foreign bank account. You have been informed that the Embassy does not deduct taxes or social security payments. The foreign country normally taxes salary and wage income. There is a taxation treaty between the Australian Government and the foreign country. You own a property in Australia. As a result of your intention to live permanently in the foreign country you intend to either rent out the property to tenants or leave it in the custody and control of family, until the property market improves and its sale is financially viable. You have undertaken the ATO's residency e-tool and you believe that you are to be treated as a foreign resident for tax purposes. As such you will be required to declare any income earned in Australia, including employment income, rental income, Australian pensions and annuities, capital gains on Australian assets. You have not yet notified the Australian Electoral Commission of your departure but intend to request your removal from the electoral roll now that you have access to Internet and you are able to complete and return the form electronically. You intend to notify relevant Australian financial institutions of your residency status as soon as practicable after receiving your private ruling. You are not married and you were not accompanied by anyone. You had been living in a de facto relationship during this financial year but you are no longer living together. You have no joint or communal property or finances. You do not have any dependants.

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

Reasons for decision: Summary: Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The tests are: • the resides test, • the domicile test, • the 183 day test, and • the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency. Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from when you departed Australia.