Private ruling: Residency for tax purposes and assessability of foreign income
Published: November 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012 | 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 2009

Ruling: Questions and answers | Are you a temporary resident of Australia for taxation purposes? | Yes. | Are you required to declare income derived overseas in your Australian tax return? | No.

Relevant facts and circumstances: You are a citizen of an overseas country. You have a Special Category Visa (SCV); this visa is a temporary visa granted under the Migration Act 1958 and is not a protected visa. You are a temporary resident of Australia. You are not a permanent resident of Australia. You and your spouse are not residents of Australia for the purposes of the Social Security Act .

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 768-910. | Income Tax Assessment Act 1997 Section 768-915.

Reasons for decision: Summary: Temporary residency You are a temporary resident if you: · hold a temporary visa granted under the Migration Act 1958 · are not an Australian resident within the meaning of the Social Security Act 1991, and · do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991. The Social Security Act 1991 defines an Australian resident as a person who resides in Australia and is an Australian citizen, the holder of a permanent visa, or a protected special category visa holder. In your case, you are not an Australian resident within the meaning of the Social Security Act 1991 as you are not an Australian citizen, the holder of a permanent visa, or a protected special category visa holder. In your case you are a temporary resident because: · you hold a temporary visa granted under the Migration Act 1958 · you are not an Australian resident within the meaning of the Social Security Act 1991, and · you do not have a spouse who is an Australian resident within the meaning of the Social Security Act 1991. Foreign source income From 1 July 2006, those taxpayers considered to be temporary residents do not have to pay tax in Australia on most of their foreign income if they: · are an individual who is an Australian resident for tax purposes, and · satisfy the requirements of being a temporary resident. Section 768-910 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that ordinary income derived from a foreign source (excluding employment related income and capital gains on shares and rights acquired under employee share schemes) is exempt from income tax in Australia when derived by a temporary resident in Australia. Therefore, as you are a temporary resident of Australia for taxation purposes, any overseas sourced income you have derived will be exempt from income tax in Australia under section 768-910 of the ITAA 1997. This income is not required to be declared in your Australian income tax return.

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