Private ruling: Residency
Date of advice: 3 October 2016
Published: November 2016
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Question and answer | 1. Are you a resident of Australia for taxation purposes for the period 1 XXXX 2016 to 31 XXXX 2016? | No. | 2. Is the source of your income for the period 1 XXXX 2016 to 31 XXXX 2016 Country Y? | Yes | 3. Are you required to pay tax on the income derived from 1 XXXX 2016 to 31 XXXX 2016 in Country Y in an Australian tax return? | No.

Relevant facts and circumstances: You are a non-resident of Australia for taxation purposes. You will commence work for an Australian based company on 1 XXXX 2016. You will carry out the work for the Australian company in Country Y from 1 XXXX 2016 to 31 XXXX 2016 You and your family will move back to Australia after 31 XXXX 2016. You will continue to work for the Australian company in Australia and will become a resident of Australia for taxation purposes upon your return to Australia.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1). | Income Tax Assessment Act 1997 Subsection 6-5.

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. You are a non-resident of Australia for taxation purposes. You are only required to declare income in Australia from an Australian source. You will carry out work for the Australian company from Country Y. The source of a taxpayer's income is the place where the services are performed: French v. FC of T (1957) 98 CLR 398. The source of your income will be Country Y as you will perform the work duties while you are living in Country Y. As a non-resident of Australia for the period 1 XXXX 2016 to 31 XXXX 2016 you are not required to pay tax on the income you derive from the Australian company in Australia for the above period. The company will not need to withhold from this payment for the above period. Once you return to Australia to work for the company, your income will be assessable in Australia and the company will need to withhold tax from the payments.