Private ruling: Residency – departing Australia
Date of advice: 4 April 2018
Published: June 2018
Ruling period: Year ended 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No.

Relevant facts and circumstances: You departed Australia to begin working overseas during the relevant income year. While working overseas you live in a mine site village. Your employment contract as a technical advisor is with a foreign company located outside of Australia and there is no end date applicable to the contract. You currently hold a work visa in the country of your employment. On your work breaks you return to another overseas country and reside with your spouse and child in a rental property. Your intention is to reside with your spouse and child in that country for the indefinite foreseeable future. Your spouse and their extended family are from that country and you both have friends living there. Your intended length of stay overseas is a minimum of 5-10 years. Before departing Australia you resided with your spouse and child in a rental property however the lease for this property has now ended. Your only asset located in Australia is a bank account. You have purchased a motor vehicle for your spouse to use overseas. You do not have a permanent place to return to live in if you visit Australia. You have not returned to Australia since your departure and you do not have any plans to return to Australia in the foreseeable future. You are not a member of the superannuation scheme established under the Superannuation Act 1990, or an ‘eligible employee’ for the purposes of the Superannuation Act 1976.

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 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.