Private ruling: Residency for tax purposes
Published: June 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

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

Relevant facts and circumstances: You are a citizen of Australia. Your country of origin is Country Y. You have no intention of ever returning to Country Y. You are living and working in Country X. Your employment contract is for a number of years. Your employer is based in Australia. Your salary is paid into your Australian bank account. Your employer pays superannuation contributions into your Australian fund. Your employer does not withhold any taxes from your salary. You intend to return to Australia when your contract ends. Your family have accompanied you to Country X. You rent an apartment in Country X. You have no assets overseas. You are renting out your house in Australia while you are overseas. You intend to return to Australia for brief visits of a few days. Neither you, nor your spouse, have ever been Commonwealth government of Australia employees.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision: Summary: Generally 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 within the tax provisions and provides four tests to ascertain the residency status. Relevant to your situation are the first two tests which are examined in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia, a copy of which is available from www.ato.gov.au. Given regard to your circumstances as a whole and a consideration of the relevant residency tests, it is accepted that you are not a resident of Australia for tax purposes. As you are not a resident for tax purposes, your foreign salary is not taxable in Australia.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.