Private ruling: Whether a taxpayer can be declared non-resident for tax purposes
Date of advice: 6 June 2016
Published: July 2016
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20YY | Year ending 30 June 20ZZ
Date scheme commenced: 1 July 20WW

Ruling: Q1: Are you a resident of Australia for tax purposes from July 20WW? | A1: No.

Relevant facts and circumstances: You left Australia to commence employment in Country X on July 20WW. You were initially employed under a contract of employment that extended over several years. This was extended with a final end date of December 20AA. You have provided the original employment contract and the latest contract extension. Your spouse did not join you initially while you travelled to Country X. Your spouse left Australia to join you at a later date. You, your spouse and your children hold visas which allow them to reside and work in Country X. You have spent no more than 30 days in Australia since leaving. Your main residence had been tenanted. You had no other assets within Australia. Your children live with you in Country X. Your mail has been re-directed to Country X. You and your spouse have removed yourselves from the electoral role in Australia. All Australian bank accounts have been closed apart from those required for the rental of an investment property. Your wages are deposited into an account in Country X.

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. Where a taxpayer has immediate family in Australia and has maintained assets in Australia, under these circumstances they would be considered a resident of Australia for taxation purposes because they either meet the domicile and or the resides test(s) under subsection 6(1) of the ITAA 1936. In your circumstances, your spouse joined you in Country X and you have no assets in Australia, apart from the tenanted property. Your children live with you and attend school locally. The 183 day test and the superannuation test do not apply to you as you will not have been in Australia for 183 days in any of the proposed periods nor are you an eligible member of the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS). You are not eligible for any employer superannuation contributions in Australia. Accordingly, you will not meet the requirements of any of the residency tests. Therefore, from July 20WW you are not a resident of Australia for the purpose of taxation. Despite your non-residency status you will still be obliged to lodge taxation returns to report your Australian income from your rental property.