Private ruling: International residency
Date of advice: 13 February 2018
Published: June 2018
Ruling period: Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020
Date scheme commenced: 1 January 2018

Ruling: Q1: Are you a resident of Australia for taxation purposes? | A1: Yes | Q2: Are you a temporary resident for tax purposes? | A2: Yes

Relevant facts and circumstances: You were born outside of Australia and are a citizen of country x. You were living outside of Australia for more than five years before arriving in Australia. You arrived in Australia in in the 2016/17 financial year. You are here on a temporary Visa. You left Australia once for a holiday. You had not previously entered Australia before moving here. You have not lodged foreign income tax returns whilst living in Australia. You do not have a spouse or dependants. You have come to Australia with your family. You are a full time student and participate in local sporting events within the school environment. You have no professional/social ties outside of Australia. While living outside of Australia you and your family lived in a rental property. You own no property outside of Australia. You have no assets outside Australia. You have one bank account within Australia. You receive no income from outside of Australia. You have no employment position or job being held for you outside of Australia. You have never been a Commonwealth of Australia government employee for superannuation purposes. You started a job in the 2017/18 financial year.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) | Income Tax Assessment Act 1997 768-910 | Income Tax Assessment Act 1997 768-915 | Income Tax Assessment Act 1997 Subsection 995-1(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. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987 ), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. Although the question of whether a person resides in a particular country is a question of fact, the courts have referred to and taken into account various factors considered to be relevant. These are: ● whether the person is physically present in that country at some time during the year of income ● the history of the person's residence and movements ● if the person is a visitor to the country, the frequency, regularity, duration and purpose of the visits ● if the person is outside the country for part of the relevant income year, the purpose of the absences ● the family and business ties which the person has with the particular country, and ● whether a place of abode is maintained by the person in the relevant country or is available for his or her use while there. Applying the above to your circumstances: 1. You are living, working and studying in Australia. 2. You’ve been here in excess of 12 months and have only left once for a holiday. 3. You reside with your family here in Australia. 4. Your family were renting outside of Australia and have no assets outside of Australia . Your behaviour in Australia reflects a degree of continuity, routine and habit that is consistent with residing here. Accordingly, you are an Australian resident for taxation purposes from the time you arrived in Australia. | Detailed Reasoning - Temporary resident: Subsection 995-1(1) of the ITAA 1997 specifies that a taxpayer is a temporary resident if: a. they hold a temporary visa granted under the Migration Act 1958; b. they are not an Australian resident within the meaning of the Social Security Act 1991, and c. their spouse is not an Australian resident within the meaning of the Social Security Act 1991. Under the Social Security Act 1991, an Australian resident is a person who resides in Australia and is either an Australian citizen or holds a permanent resident visa. Although you are a resident of Australia for taxation purposes, you are also a temporary resident of Australia because you are not an Australian citizen, you do not have a spouse who is an Australian citizen, and you have not yet received your permanent resident visa. Therefore you are currently a temporary resident.