Private ruling: Temporary residency and assessable income
Published: September 2017
Ruling period: Year ended 30 June 2015 | Year ended 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you a temporary resident of Australia? | A1: Yes. | Q2: Will you remain a temporary resident until your status changes to a resident for the purpose of the Social Security Act 1991 ? | A2: Yes. | Q3: Is your foreign income assessable in Australia? | A3: No.

Relevant facts and circumstances: You are the holder of a temporary visa. You are not a resident of Australia within the meaning of the Social Security Act 1991 . Your spouse is not a resident of Australia within the meaning of the Social Security Act 1991 . You receive foreign income.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 995-1(1) | Income Tax Assessment Act 1997 Section 768-910 | Income Tax Assessment Act 1997 Subsection 768-915(1) | Income Tax Assessment Act 1997 Section 768-955

Reasons for decision: Detailed Reasoning - Temporary Residency: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) states that you are a temporary resident if: a) You hold a temporary visa granted under the Migration Act 1958 ; and b) You are not an Australian resident within the meaning of the Social Security Act 1991 ; and c) Your spouse is not an Australian resident within the meaning of the Social Security Act 1991 . However, it states that you are not a temporary resident if you have been an Australian resident and any of the above paragraphs are not satisfied after 6 April 2006. You are the holder of a temporary visa. You and your spouse are not residents of Australia within the meaning of the Social Security Act 1991 . You will remain a temporary resident of Australia unless your status changes in Australia. | Detailed Reasoning - Foreign source income: From 1 July 2006, those taxpayers considered to be temporary residents do not have to pay tax in Australia on most of their foreign income if they: ● are an individual who is an Australian resident for tax purposes, and ● satisfy the requirements of being a temporary resident. Section 768-910 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that ordinary income derived from a foreign source (excluding remuneration from employment performed overseas and capital gains on shares and rights acquired under employee share schemes) is exempt from income tax in Australia when derived by a temporary resident in Australia. Therefore, as you are a temporary resident of Australia for taxation purposes, any foreign sourced income you have derived will be exempt from income tax in Australia under section 768-910 of the ITAA 1997. This income is not required to be declared in your Australian income tax return.