Private ruling: Residency for tax purposes
Published: February 2014
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ending 30 June 2014
Date scheme commenced: 1 July 2011

Ruling: Question and answer | Are you a resident of Australia for tax purposes? | No.

Relevant facts and circumstances: You were born in, and are a citizen of, Australia. You left Australia in 20XX to work in Country X. Prior to leaving Australia, you lived at your relative's house. Your first employment contract in Country X was for one year, renewable up to 5 years. You current employment in the country is on a permanent ongoing basis. Your spouse, who is a citizen of Country X, lives with you in Country X. You were initially on a 3 year renewable work visa. You changed to a renewable spousal visa in 2013. You will be eligible to become a permanent resident in 20YY. You have no immediate plans to leave Country X. You live in a rental property and have purchased furnishings in the country. You do not have any property or assets in Australia. You pay taxes in Country X and you are a member of the Country X public health insurance, public pension and unemployment insurance systems. You have a joint savings account in Australia but do not have any other source of income in Australia. Neither you, nor your spouse, have ever been Commonwealth Government of Australia employees. You recently studied at an Australian university via distance education on a part-time basis. This was a Commonwealth Supported Place and you paid all fees upfront. When you applied for the Commonwealth Supported Place, the only stated requirement was Australian Citizenship and you were told that Australians living overseas were still eligible. You have been informed that since January 2013, students commencing new courses of study must spend at least one semester in Australia to be eligible for a Commonwealth Supported Place, however, as you are an existing student these changes do not affect you.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5. | Income Tax Assessment Act 1936 Section 6(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 Taxation Ruling IT 2650 Income Tax: Residency - permanent place of abode outside Australia, a copy of which is available from www.ato.gov.au . Given regard to your circumstances as a whole and a consideration of the relevant residency tests, it is accepted that you are not a resident of Australia for tax purposes.