Private ruling: Residency – departing Australia
Date of advice: 16 February 2018
Published: June 2018
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021 | Year ended 30 June 2022
Date scheme commenced: 1 July 2016

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

Relevant facts and circumstances: You are an Australian citizen. Timing of events since leaving Australia You and your partner departed Australia in the 2015/16 financial year to live in Country A. You have no children / dependents. Your partner is a Country A citizen. They were living in Australia as a permanent resident before relocating to Country A. The parents of your partner still live in Australia as permanent residents. You entered Country A on a standard tourist visa. In the 2015/16 financial year you signed an employment contract with a company in Country A. In the 2015/16 financial year you received an in-principle approval (IPA) letter stating that your Employment Pass would soon commence. In the 2015/16, you flew back to Australia on a holiday, exiting Country A on your tourist passport. You returned and entered Country A using your IPA letter. In the 2015/16 financial year you transitioned to an Employment Pass. The Employment Pass visa is available for foreign professionals with a job offer in Country A who meet certain eligibility criteria. The duration of the Employment Pass is two years for first-time candidates and up to three years for renewals. You intend to apply for an extension of the Employment Pass so you will be present in Country A for approximately five years. Employment Passes are generally renewed as a matter of course. As of yet, you have not made any application to apply for permanent residency in Country A. In practice, permanent residency in Country A will only be considered after at least two years of residing there. You are currently a first-time candidate. You can apply for a renewal of the Employment Pass if you are still employed when their Employment Pass expires (i.e. the 2017/18 financial year). If your employment ceases and you cannot find another source of work, you will be required to leave Country A. At the date of this Application, you are still employed by a Country A company. You live at an address in Country A with your partner. You have always lived at this address since arriving in Country A. The property is available exclusively for you and your partner. Copies of correspondence mailed to the address, including bank statements and your Country A IRD Notice of Assessment can be provided as required. Your intentions on returning to Australia Since your departure from Australia, you have returned to Australia for short visits for the purposes of visiting family on four occasions. You do not intend to return to Australia in the foreseeable future, other than to visit family for short periods of time. Since relocating to Country A in the 2015/16 financial year, you have taken eight holidays, four of which have been spent in Australia. Your connection with Australia You do not own any assets (including motor vehicles or real estate) in Australia. You stayed with your parents when you visited Australia on your holidays. You do not own any shares in any Australian resident companies, or control any Australian trusts. You do not maintain any social or sporting connections in Australia. You are not a member of any social or sporting clubs / groups. You were not a Commonwealth Government of Australia employee for superannuation purposes prior to moving to Country A. You are not enrolled with the Electoral Office at his time of departure from Australia. You maintain a savings and everyday bank account in Australia. These accounts each have a nominal balance. The sum of the accounts is below $10,000. You have been unable to update your bank details to reflect your status as a non-resident as you are currently overseas. You intend to do this next time you return to Australia. You do not have Australian medical insurance. Your connection with Country A You have an opened a bank account in Country A which is used for your salary and everyday transactions. This bank account is a personal bank account. You are lodging income tax returns in Country A. You lodged your 2016/2017 financial year tax return as a resident of Country A

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. | Detailed Reasoning - Income Periods: You have requested a private ruling from the 16 January 2018 for an indefinite period. Due to the possibility of change to the law, the possibility of changes in your circumstances, and the risk that a subsequently issued public ruling might override a private ruling the Commissioner has issued, the Commissioner has provided a private ruling until the 2021/22 income year. You can request a further ruling after this time if you are still unsure about this issue.