Private ruling: Residency
Date of advice: 30 April 2019
Published: June 2019
Ruling period: Year ended 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No | Q2: Is your income derived in Country Y assessable in Australia? | A2: No

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 family went to Country Y for work purposes in July 2017. You intend on working in Country Y for 3-4 years. You have an alien registration card to enter country Y. This card allows you to be in Country Y for the duration of your work in Country Y. You rent accommodation in country Y. You have purchased items for the accommodation in country Y. You took personal and household items to Country Y with you. Your spouse will not work in country Y. Your child attends child care in country Y. You have a house in Australia which is being rented out for the period you are in Country Y. You have a bank account in Country Y. You have no plans to return to Australia in the near future. You have removed your name from the electoral roll. You have notified your bank in Australia that you are a non-resident of Australia for taxation purposes. You and your spouse are not eligible to contribute to the PSS or the CSS 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 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. 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 section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 and your income derived in Country Y for the period you are working in Country Y is not assessable in Australia as the source of this income is Country Y.