Private ruling: Residency
Published: April 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Questions and answers | Are you a resident of Australia for taxation purposes? | No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You were born in Country A You are a citizen of Country A. You hold a Country A passport. You entered Australia on a subclass 457 visa. You will spend 2-3 months a year in Australia working. You arrived in Australia to start your employment in early 20XX and will be leaving Australia a few months later. You will return to Australia on early 20YY and 20ZZ for similar short periods. When you are not working in Australia you spend most of your time living in Country B and the rest in Country C where you also have employment. You are continuously looking for permanent sponsored work in Australia. You have a savings bank account in Australia. When in Australia you stay in rented accommodation or with friends. You have limited social ties with Country A. You have strong social and professional connections with Australia. You are not nor have been a Commonwealth government of Australia employee.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection6(1). | Income Tax Assessment Act 1997 Section 6-5. | Income Tax assessment Act 1997 . Subsection 995-1(1)

Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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. These tests are: 1. The resides test 2. The domicile test 3. The 183 day test 4. The superannuation test The first two tests are examined in detail in Taxation Ruling IT 2650. | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. As you are residing outside of Australia and only visit Australia on a sub class 457 visa, you do not meet the resides test. | Detailed Reasoning - The domicile test: If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia. Domicile is a legal concept to be determined according to the Domicile Act 1982 and to the common law rules which the courts have developed in the field of private international law. The primary common law rule is that a person acquires at birth a domicile of origin, being the country of his or her father's permanent home. You are a Country A citizen who has a working visa to enter Australia for work purposes. You have not applied for permanent residency of Australia. You have retained your domicile of birth. You do not have an Australian domicile. As you do not have an Australian domicile you are not a resident of Australia for tax purposes under this test. | Detailed Reasoning - 183 day test: When 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. This test does not apply to you as you will not be present in Australia for more than 183 days in the period of the ruling. | Detailed Reasoning - The superannuation test: An individual is a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS), or that person is the spouse or child under 16 of such a person. You are not a Commonwealth Government employee. Therefore you are not a resident under this test. | Detailed Reasoning - Your residency status: As you do not meet any of the residency tests you are not a resident of Australia for taxation purposes.