Private ruling: Residency
Published: May 2013
Ruling period: Year ending 30 June 2013
Date scheme commenced: 1 July 2012

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

Relevant facts and circumstances: You were born in country X. You are a duel citizen of Country X and country Y. You moved from Country X to Country Y a number of years ago. You live in Country Y with your family. You work in Australia. You work on a fly in fly out basis from country Y. You work on a continuous X week on X week off roster. You are in Australia for more than 183 days each year. You have a permanent contract with no end date. All annual leave is considered to be taken during your rostered time off. You spend your rostered time off with your family at your home in Country Y. You live in camp style accommodation at your work site. You have a room at the site which has an ensuite bathroom, TV, single bed, desk etc. You do not share your room with anyone. You have this room each time you commence your work. You store some personal items in the room. You have friends in Australia. You are contemplating moving your family to Australia to live. Neither you nor your spouse are currently or have ever been Commonwealth government employees.

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: 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. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: · the resides test · the domicile test · the 183 day test · The superannuation test. The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they will be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd 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'. Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individuals behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here. The following factors are useful in determining whether your behaviour over the time spent in Australia reflects a degree of continuity, routine or habit that is consistent with residing here: (a) intention or purpose of presence; (b) family and business/employment ties; (c) maintenance and location of assets; and (d) social and living arrangements You are working in Australia on a fly in fly out basis from Country Y. You work X weeks on and X weeks off. You go back to Country Y to be with your family for the X weeks you have off. You have a home in Country Y which you return to each time. You live in camp style accommodation at the work site which has a single bed, ensuite bathroom, TV, desk etc. This accommodation is supplied by the company who you provide services to. You are not residing in Australia according to ordinary concepts as you are not living in Australia on a permanent basis. You choose to work in Australia and your home and family are in Country Y where you return to every three weeks. You are not a resident under this test. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. Your domicile of origin is Country X. Your domicile of choice is Country Y. You are contemplating coming to Australia to live in the future but have not done. Therefore your domicile is not Australia and you are not a resident under this test. | Detailed Reasoning - The 183-day test: Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You spend 190 days working in Australia. The Commissioner is satisfied that your usual place of abode is in Country Y and at this point you do not intend to take up residence in Australia. You are not a resident under this test. | Detailed Reasoning - The superannuation test: An individual is a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee. This test does not apply to you. You are not a resident under this test. | Detailed Reasoning - Your residency status: You are not a resident of Australia for taxation purposes.