Private ruling: Residency
Date of advice: 28 September 2017
Published: February 2018
Ruling period: Year ended 30 June 201X | Year ending 30 June 201Y | Year ending 30 June 201Z
Date scheme commenced: April 201X

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

Relevant facts and circumstances: You are a citizen of Australia and country Y. You were born in Australia. You went to country Y to live and work in the 201X income year. Your contract is for 2 years and you can extend the contract. You intend on being in Country Y for at least 2 years. You rent accommodation in Country Y. You have taken all your personal belongings to Country Y with you. You have a bank account in Australia. You own a 50% share in a rental property in Australia. You have not returned to Australia since leaving. You do not intend on returning to Australia in the first 12 months of your move to Country Y. You do not have any dependants. You do not have a spouse. You are not eligible to contribute to the PSS or the CSS Commonwealth super funds.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(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. 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 subsection 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 for the period you are working in country Y. You are not required to declare the income you derive in country Y in your Australian tax return.