Private ruling: Residency for taxation purposes
Date of advice: 17 January 2018
Published: May 2018
Ruling period: Period ending 30 June 2014 | Period ending 30 June 2015 | Period ending 30 June 2016
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the taxpayer a resident of Australia for Taxation purposes from when they departed Australia? | A1: No

Relevant facts and circumstances: You were born in Australia. You are an Australian Citizen. You maintain an Australian passport. You are single and do not have any children. Between July 2013 and October 2013 you did not have a lease, or own property in Australia. Between July 2013 and October 2013 you actively searched for employment overseas. You resigned from your Australian employer when you obtained employment with an overseas company Your employment was for an indefinite period. You departed Australia to take up your position in late 2013. You advised the Electoral Office to remove your name from the electoral roll. You suspended your Australian Private Health Insurance. You cancelled your Australian mobile phone account. You had your name removed from Medicare records. You notified your financial institution you were leaving the country. You marked your Immigration Outgoing Passenger Card as “exiting permanently”. You took most of your personal possessions. You retained no property or rental lease in Australia. You travelled on a two year Employment Resident visa that allowed you to work and reside in country A; this visa included an option to extend. Your intention was to extend the visa and remain in country A. Your employer paid you a mobilisation allowance. You had long-term accommodation in country A that was sub-let from the lease holder. The apartment was equipped with all the usual facilities that a home would have. All expenses were evenly shared between you and the lease holder. You contributed to the facilities of the home. You had health and group insurance supplied by your employer as part of your remuneration package. This company was not Australian. You held a private mobile account in country A. You built and maintained friendships and undertook social activities. In 2014 the company moved you to an office in country B. Your contract indicated you were contracted to country B indefinitely. You moved to country B and obtained a resident visa that allowed you to live and work in country B You had long-term accommodation when you moved to country B You signed a two year lease. You purchased bedroom, dining and kitchen furniture for the apartment. You had transported all of your possessions from country A to take up this position. You had a bank account in country B for daily use. You were an active member of a yoga studio. You were enrolled in a 300 hour yoga teaching training course. You resigned from your employer and returned to Australia due to health reasons in late 2015. You have never worked for the Australian Public Service and are not a contributing member of the Commonwealth Superannuation Scheme or the Public Service Superannuation Scheme.

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

Reasons for decision: Summary: Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation 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 (and permanent place of abode) 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 you have not satisfied any of the tests of residency. Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 from departure from Australia in Spring 2013 until your return in Spring 2015.