Private ruling: Residency
Date of advice: 1 September 2016
Published: October 2016
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Question and answer: | Are you a resident of Australia for income tax purposes? | Yes.

Relevant facts and circumstances: You migrated to Australia from in 20XX with your spouse and child. Your spouse and child have stayed in Australia. You have travelled overseas to work. You are in Australia for two or three months and work overseas for three or four months. During the relevant financial year you have been out of Australia for employment for more than half the income year. You have paid tax in the country in which you are employed. You do not have an employment position or job being held for you in any overseas country. You are a citizen of your country of origin and are in the process of gaining Australian citizenship. You currently have a permanent resident visa, which allows you to remain in Australia for 5 years. You intend to reside in Australia permanently. You and your family live in a home that you have rented since your migration to Australia. You have sold your home in your country of origin. You have rental accommodation in the country of your employment. You maintain bank accounts outside Australia. You have bank accounts, a car and household assets in Australia. Neither you nor your spouse a Commonwealth of Australia Government employees for superannuation purposes.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1). | Income Tax Assessment Act 1936 Subsection 6(1). | Income Tax Assessment Act 1997 Subsection 6-5(2).

Reasons for decision: Summary: 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 (and permanent place of abode) test, • the 183 day test, and • the superannuation test. The first two tests are examined in detail in TAXATION RULING NO. IT 2650 INCOME TAX: Residency - Permanent Place of Abode Outside Australia . The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. An individual need only satisfy the conditions of one of the four tests to be deemed a resident of Australia for income tax purposes. The resides test The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. As the word 'reside' is not defined in Australian taxation law, it takes its ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936. Based on the facts of your case, you are residing in Australia according to the ordinary meaning of the word. Therefore you are a resident of Australia under this test. The domicile test Under this test, a person whose domicile is in Australia will be considered a resident of Australia for taxation purposes; unless the Commissioner is satisfied the person's permanent place of abode is outside Australia. In your case, your domicile of origin is outside Australia. A person maintains there domicile of origin unless and until they acquire a domicile of choice in another country. As it is your intention to make Australia your permanent home, you have acquired a domicile of choice in Australia. As you have sold your overseas home and are renting properties for the period of your overseas employment, you do not have a permanent place of abode outside Australia; therefore you are a resident of Australia under the domicile test. The 183-day test Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. You were not physical present in Australia for a period of greater than 183 days, therefore you were not a resident of Australia under this test. The Superannuation test An individual is considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS. You and your spouse have never been a member of the CSS or PSS. Accordingly, you were not a resident under this test. Your residency status You are a resident of Australia for tax purposes during the income year in question.