Private ruling: Residency for tax purposes
Published: July 2012
Ruling period: Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2012

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

Relevant facts and circumstances: You were born in Country X. You are a citizen of Australia. You arrived in Australia a number of years ago. You have been living in Australia ever since arriving here. You left to work in Country X a few years ago. You have a work visa in Country X. You have a work contract which is due to end soon. You will return to Australia after the contract ends. You have a home in Australia which you have left vacant for your return. You have rental properties in Australia. You rent a property in Country X. You are required to move around with your current position in Country X. You have no intention of staying in Country X on a permanent basis. Neither you nor your spouse have ever been Commonwealth Government employees.

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

Reasons for decision: Summary: Generally where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. The terms 'resident' and 'resident of Australia', in regard to an individual, are defined within the tax provisions and provides four tests to ascertain the residency status. Relevant to your situation are the first two tests which are examined in detail in Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia. In examining these tests, IT 2650 provides a number of factors which assist in assessing a taxpayer's situation against the tests. A copy of this ruling is available from www.ato.gov.au. | Detailed Reasoning - The resides test: Whether the individual resides in Australia according to the ordinary meaning of the word resides. In your case, you are working in Country X. When you are working you stay in rented accommodation. You do not intend to live in Country X on a permanent basis and will return at the end of your work contract. Although you have economic ties to in Country X by way of your employment your ties to Australia are stronger as you maintain a home in Australia, you have assets in Australia by way of a home and rental property. Based on these facts, you are residing in Australia according to the ordinary meaning of the word. Therefore, you meet the 'resides test' and are a resident of Australia for tax purposes. | Detailed Reasoning - The domicile test: Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia. Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence. In your case, your domicile is Australia. In your case the Commissioner is not satisfied that you have a permanent place of abode outside of Australia because: · You stay in rented accommodation · You maintain a home in Australia · You intend to return to Australia when your contract ends Therefore, you are a resident of Australia under this test. | Detailed Reasoning - Your residency status: As you meet the resides and domicile tests, you are considered to be a resident of Australia for tax purposes.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.