Private ruling: Residency of Australia for taxation purposes.
Date of advice: 9 April 2019
Published: May 2019
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No. Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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. Section 995-1 of the 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 Aust ralia 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.

Relevant facts and circumstances: You were born in Country Y. You are a citizen of Australia. You left Australia in the 2016 income year to work in country Z. You have a work visa to enter Country Z. The visa is renewed every two years. You have an ongoing work contract in Country Z. You come back to Australia to visit family and friends. You do not exceed 183 days in any financial year in Australia. You stay in your family home when you return to Australia. Your Spouse lives in the family home in Australia. You financially support your spouse and pay the mortgage on the family home. You and your spouse have a mutual agreement and live separately. You have adult children who live in Australia. You live in employer provided accommodation in Country Z. You have purchased household items for the accommodation in country Z. You have a rental property in Australia along with a vehicle and bank account. You have sporting and social connections in Country Z. You are not eligible to contribute to the CSS or the PSS Commonwealth super funds.

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