Private ruling: Residency
Date of advice: 30 July 2018
Published: September 2018
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you a resident of Australia for income tax purposes? | A1: Yes

Relevant facts and circumstances: You were born in country Y. You are a citizen of Country Y. You have a 188 visa to enter Australia. You and your spouse have entered and left Australia a number of times since early 2016. You own a house in Australia. Two of your children live in the house in Australia. Your youngest child lives in Country Y with you and your spouse. You have a house in Country Y which you and your family live in. You have a business in Country Y. You were in Australia for more than 183 days in the 2018 income year. You intend on taking up permanent residency in Australia. Neither you nor your spouse are 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 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation 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. The first two tests are examined in detail in Taxation Ruling IT 2650 – Income tax: residency – permanent place of abode outside Australia. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes. 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 are a resident of Australia for income tax purposes under the 183 day test. You were in Australia for more than 183 days in the 2018 income year and it is your intention to take up permanent residency in Australia in the future.

ATO view documents: Taxation Ruling TR 98/17 – Income tax: residency status of individuals entering Australia