Private ruling: Residency
Date of advice: 3 October 2017
Published: February 2018
Ruling period: Year ended 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: X November 2016

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: No | Q2: Is your income derived in the country Y assessable in Australia? | A2: No.

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You went to country Y to work on in the 2017 income year. Your work contract in Country Y is for 3 years at which point you will return to Australia. You rent accommodation in Country Y which is for your sole use. You intend on returning to Australia for a short visit at Christmas. You do not have any dependants. You do not have any Australian sourced income. You have a HECS debt. You are not eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

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 6 - 5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that 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. 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 for the period you are working in Country Y. Your Country Y income is not assessable in Australia. | Detailed Reasoning - Please note:: Changes have been made to the student loan repayment requirements. Please go to our web site at www.ato.gov.au and type in QC 47358. This sets out your obligations to repay your debt as a non-resident of Australia for tax purposes.