Private ruling: Foreign income
Published: May 2013
Ruling period: Year ending 30 June 2012, | Year ending 30 June 2013, | Year ending 30 June 2014.
Date scheme commenced: 1 July 2011.

Ruling: Question and answer | Are you an Australian resident for tax purposes from the date you departed Australia? | No.

Relevant facts and circumstances: You are a citizen of Australia. You departed Australia in the relevant year with a visa. You intend to rent and work overseas indefinitely. You are a resident of the overseas country for taxation purposes. You did not become a resident solely of the overseas solely for the purpose of performing the governmental functions, you applied for employment after arriving overseas. You resigned from your employment in Australia. You are not a permanent employee of the Commonwealth for the purposes of the PSS membership or any other purpose under section 3 of the Superannuation Act 1990 . You are employed as a locally engaged overseas employee. You receive salary and wages in respect of your employment. The overseas country normally taxes salary and wage income. There is taxation treaty between the Australian Government and the overseas country. You have no assets in Australia. You live independently overseas.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 6-5 | Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1936 Subsection 6(1) | Income Tax Assessment Act 1997 Paragraph 6-5(3)(a)

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. | Detailed Reasoning - For your information: Effect of the Double Tax Agreement As stated by you, you are a locally engaged resident of the overseas country for taxation purposes and did not become a resident overseas solely for the purpose of performing employment or services there. As such we would recommend you contact your local taxation authorities to discuss the effect of the Double Tax Agreement. The applicable double tax agreement is the Convention between Australia and Overseas Country for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. This agreement came into force prior to your departure.