Private ruling: Residency - working overseas
Ruling period: Year ended 30 June 2007 | Year ended 30 June 2008 | Year ended 30 June 2009
Date scheme commenced: 1 July 2006

Ruling: Q1: Are you an Australian resident for taxation purposes while working overseas? | A1: No

Relevant facts and circumstances: You are a citizen of Australia. You quit your job in Australia and travelled to country X. You commenced employment in country X. Your employment period with your country X employer was for X years. You were initially on a working holiday visa, however you were able to apply for a working permit, which you did. During your time in country X you rented the same property for the entire period. You opened a bank account in country X and subsequently closed your Australian bank account. Prior to leaving Australia you were living in a rental property. You did not own a property in Australia. While working in country X, you returned to Australia on a few occasion for holiday and to visit friends and relative. You do not have any dependant. You intended to stay in country X indefinitely and were planning to apply for residency. However, by the middle of 200X the economic situation had changed significantly in country X, you were force to take a pay cut and your working conditions deteriorated, this coincided with some issues with your family in Australia. At this point you made the decision to leave country X and return to Australia. You are not a member of the Commonwealth Government of Australia.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) Reason for decision | The terms 'resident' and 'resident of Australia' are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA1936). The definition provides a series of tests to ascertain whether a person is a resident of Australia. These tests are: · the resides test | · the domicile test | · the 183 day test | · the superannuation test. | Two of the tests that are relevant to your circumstance depend on whether or not you could be considered to be residing permanently or for a considerable period of time in country X, such that it is your settled or usual place of abode. | You have lived and worked in country X and intended to remain working there indefinitely. Although you maintain an association with Australia through your relative and friends, your associations with country X are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that you have established a permanent or long-term residence outside of Australia. | The other residency test that is potentially relevant to your circumstances involves membership of a superannuation scheme set up for employees of the Commonwealth. As you are not members of such a scheme, however, this test will not apply. | In view of the above, it has been concluded that you will not be a resident of Australia for taxation purposes while working overseas.

Reasons for decision: Summary: The terms 'resident' and 'resident of Australia' are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA1936). The definition provides a series of tests to ascertain whether a person is a resident of Australia. These tests are: · the resides test · the domicile test · the 183 day test · the superannuation test. Two of the tests that are relevant to your circumstance depend on whether or not you could be considered to be residing permanently or for a considerable period of time in country X, such that it is your settled or usual place of abode. You have lived and worked in country X and intended to remain working there indefinitely. Although you maintain an association with Australia through your relative and friends, your associations with country X are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that you have established a permanent or long-term residence outside of Australia. The other residency test that is potentially relevant to your circumstances involves membership of a superannuation scheme set up for employees of the Commonwealth. As you are not members of such a scheme, however, this test will not apply. In view of the above, it has been concluded that you will not be a resident of Australia for taxation purposes while working overseas.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.