Private ruling: Residency of Australia for taxation purposes
Date of advice: 14 November 2025
Published: 5 January 2026
Ruling period: Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you a resident of Australia for taxation purposes from the relevant date? | A1: No. | Q2: Is the income you derive from your Australian employer Australian sourced income? | A2: Yes. | Q3: Are you required to pay tax on your Australian sourced income in Australia? | A3: Yes.

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You are not a permanent resident of any other country. You and your spouse went to Country Z for work purposes. Your spouse obtained employment in Country Z. You entered Country Z on a spouse resident visa. You are working for Employer Z. Employer Z is an Australian company. You have removed your name from the Australian Electoral Roll. You work full time. You previously worked for this company when you were living in Australia. You are working remotely in Country Z for your Australian employer. You were offered the remote position by your employer prior to leaving for Country Z. The remote position is different to the position you worked as in Australia. The terms and conditions of your previous position govern your current remote position. You commenced this role in Country Z prior to signing the contract. To access your work in Country Z you log into your email via Microsoft Outlook and the company website to perform your duties. You do not require a VPN to complete your work. You use a company software package to carry out your duties. You are paid in Australian dollars by your employer into an Australian bank account. Australian law governs your remote employment in Country Z as per the terms and conditions of your contract. You do not pay tax on this income in Country Z. You lived in a rental property while in Australia which you are no longer renting. You took personal items to Country Z with you. You and your spouse are living in a rental property in Country Z which you are paying for. The rental property in Country Z is for your sole use. You do not have any assets in Australia. You have family remaining in Australia your parents and siblings. You do not intend on returning to Australia to live and work. You have removed your name from the Australian Electoral Roll. You have removed your name from Medicare. Neither you nor your spouse are eligible to contribute to the PSS or the CSS Commonwealth super fund.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Detailed Reasoning - Residency Status:: For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition has four tests to determine your residency for income tax purposes. These tests are: • the resides test • the domicile tests • the 183-day test, and • the Commonwealth superannuation fund test. It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes. Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals . | Detailed Reasoning - The resides test: The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides, you are considered an Australian resident for tax purposes. Some of the factors that can be used to determine whether you reside in Australia include: • period of physical presence in Australia • intention or purpose of presence • behaviour while in Australia • family and business/employment ties • maintenance and location of assets • social and living arrangements. No single factor is decisive, and the weight given to each factor depends on your specific circumstances. Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests. | Detailed Reasoning - The domicile tests: Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia. Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile. For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent). Whether your permanent place of abode is outside Australia is a question of fact to be determined in light of all the facts and circumstances of each case. Key considerations in determining whether you have your permanent place of abode outside Australia are: • whether you have abandoned, in a permanent way, living in Australia • length of overseas stay • nature of accommodation, and • durability of association | Detailed Reasoning - The 183-day test: Under the 183-day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both: • your usual place of abode is outside Australia, and • you do not intend to take up residence in Australia. The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when are physically in a country. | Detailed Reasoning - The Commonwealth superannuation test: An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976 , or they are the spouse, or the child under 16, of such a person. | Detailed Reasoning - Application to your circumstances: We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that for the relevant period you are a not resident of Australia as follows. Considering your individual circumstances, we have concluded that you are not a resident of Australia according to ordinary concepts. You have gone to Country Z to live and work. Your spouse has also gone to Country Z to live and work. You do not intend on returning to Australia to live and work. You have left Australia indefinitely. We also consider that your domicile is in Australia as you are a citizen of Australia. The Commissioner is satisfied that you have a permanent place of abode outside Australia. We considered the following factors in forming our conclusion: • You have gone to Country Z indefinitely • You have gone to Country Z to live and work • Your spouse is in Country Z with you • You are renting accommodation in Country Z at your own expense. You will not be in Australia for more than 183 days in the relevant income year and you do not intend on being in Australia for more than 183 days in any future income years. You are not a resident under this test. You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test. You are not a resident of Australia for taxation purposes for the relevant income years. | Detailed Reasoning - Source of Income:: 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. In Nathan v. Federal Commissioner of Taxation [1918] HCA 45 at [189-190] it was recognised that the ascertainment of the actual source of a given income is a practical, hard matter of fact. As stated by Bowen J in Federal Commissioner of Taxation v. Efstathakis [1979] FCA 49 (the Efstathakis Case) at [9], to determine source: ... the answer is not to be found in the cases, but the weighing of the relative importance of the various factors which the cases have shown to be relevant. In the Cam, French and Efstathakis cases it was held that the source of the income was where the taxpayer performed the services: Commissioner of Taxation v Cam & Sons Ltd [1936] NSWStRp 34 (the Cam Case) - concerned wages paid to seamen employed to work on trawlers. They were engaged and paid in New South Wales, but most of their services were provided outside state territorial waters. Jordan CJ, with whom Street and Bavin JJ agreed in the Cam Case at 548, held that: Where income is derived from wages or salary, again the source has several factors. Personal exertion may be involved in negotiating and obtaining the contract of employment, in performing the stipulated services, and obtaining payment for them ... [I]n the ordinary case of the employment of a seaman ... where there is nothing special, either in the circumstances of the contract of employment or in the payment, and where the work is both done and paid for in the ordinary course, the all-important factor is the doing of the work; and the contract of employment and the payment are relatively insignificant and formal elements. But this is not necessarily the case with respect to all wages or salary. In the case of an appointment to a sinecure, the engagement and the payment may be the only significant factors. Accordingly, the wages had to be apportioned based on working time in and out of New South Wales territorial waters. Federal Commissioner of Taxation v French [1957] HCA 73 (the French Case) - the taxpayer was employed as an engineer by the Australian company CSR which carried on business in New South Wales and, relevantly, New Zealand. Each year, the taxpayer spent two or three weeks in New Zealand as inspecting engineer for the company in its New Zealand business. At all other times, the taxpayer performed services for the company in New South Wales. A majority of the High Court held that the wages paid in respect of the period in New Zealand were sourced in New Zealand, because this is where the services were performed, this being the most important factor in Mr French's situation (see French Case at 411, 417 and 422). However, the Court also made comments to the effect that this decision did not necessarily determine what would be most important in every personal services contract. For example Dixon CJ in the French Case at 405 in relation to a director and at 406 in relation to an accountant procured to achieve a specified result, and Kitto J at 417-418 refers to a situation where remuneration was payable regardless of service, and to a person who worked sometimes overseas who was paid while on sick leave, and to where a period of overseas service might in substance be merely incidental to Australian service. In the Efstathakis Case - the taxpayer was a Greek National resident in Australia who was employed by the Greek Government as a secretary/typist in the Greek embassy. She had applied for the job in Greece, and the post had been gazetted there. She performed the services in Australia. Her net pay was compiled in Greece, a cheque was drawn on a bank in Greece and then received in Australia. A condition of her employment was that she could be posted anywhere in the world, but she would probably have resigned, as she had put down roots in Sydney, having child there, buying a unit, and marrying a naturalised Greek Australian. Bowen CJ, with whom Brennan and Deane JJ agreed, held that the wages paid to the taxpayer had an Australian source. His Honour considered the above factors, but gave most weight to 'the residence of the taxpayer in Australia and the facts that the services were performed and payment received [in Australia]. The payment of remuneration depended upon actual performance of the services (the Efstathakis Case at [11]). As per the above cases, cases concerning the provision of personal services are decided by weighing up the outcomes of the consideration of the following three factors (with the weighting given to each determined by their relevance to the case): • the place where the contract of employment is entered, • the place where remuneration is payable, and • the place where the services are performed. In your situation, you have an employment contract with Employer Z who is an Australian company and carry out your duties in Country Z. The contract of engagement was formulated, prepared, and is governed by the laws that apply in Australia. Therefore, this factor significantly leans towards the source of the income being Australia. Your remuneration is paid by your Australian employer into a bank account located in Australia in Australian dollars. Therefore, this factor leans towards the source of the income being Australia. As mentioned above, in the Cam, French and Efstathakis cases it was held that the source of the income was where the taxpayer performed the services. However, in those cases the place where the taxpayer was located was the same as where the taxpayer did the work, where it was given effect to and where the outcome of the work occurred. Your case is distinguished from these cases as the place where your work was given effect to and were the outcome of the work occurred was with your employer in Australia. On the physical location of where your duties are performed alone, this would lean towards the source of the work being in Country Z. However, your physical location is not sufficient, the other factors listed above are also relevant. Considering this, the third factor leans towards the income being sourced in Australia. This is even more so, taking into account that you would be able to physically perform your work in any location in the world. Your employment duties have no relationship with Country Z apart from your physical presence. Furthermore, the company you are employed by does not deal with international logistics. You log into the company's website in Australia and use a company software package to perform your duties. Your employer offered you a contract knowing that you were moving to Country Z and in fact changed your position in order for you to remain employed with them. After considering all of the factors relating to your employment contract, remuneration, your duties and services you perform, the income you earned from your Australian contract is regarded as being sourced in Australia. As a non-resident of Australia for taxation purposes you are required to declare and pay tax on your Australian sourced income in Australia. You are required to declare your income from your work with Employer Z in your Australian tax return and you will be taxed at the non-resident rates of tax.