Private ruling: Residency
Date of advice: 26 June 2017
Published: October 2017
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Question and answer | Are you a resident of Australia for taxation purposes while you were working in Country B? | No.

Relevant facts and circumstances: General Your country of origin is foreign country A. You are a citizen of Australia. You have no other citizenship other than Australia. You have not been granted permanent residency by any country. You departed Australia. Your destination overseas was foreign country B: ● No other country other than foreign country B was visited. ● Date of Arrival in foreign country B: Late 2015. ● Date of Departure out of foreign country B: Mid 2016. ● Your purpose of visit was for employment. You entered foreign country B on an employment visa. The visa does not allow me to stay there permanently. Your visa was supplied by your employer. It is subject to renewal every 3 to 6 months by your employer on a regular basis. Your intention was to work and stay in foreign country B for an indefinite amount of time. This intention was formulated at the time of accepting the employment contract. The employment contract specifies that the place of work would be on site in foreign country B on a construction project. Upon completion of that project, the intent was to be redeployed back to the employer’s head office in foreign country B to take up an office position in that location for an unspecified amount of time. The Australian Electoral Commission and Medicare were not informed. You did not inform your private health insurance provider of your departure. You stated on your incoming and outgoing passenger cards that you were leaving Australia permanently. No Australian income tax return was lodged when you were overseas. Accommodation Your address in foreign country B was: ● This was a house rented by your employer, under your employer’s name. ● You had exclusive use at all time. ● The term of lease is X months plus X months option to renewal in line with the duration of the project lifespan in foreign country B. Assets You own a house in Australia. This house is provided to someone rent-free to live and care for someone else who also resides in the property. While you were overseas you received bank interest from a savings deposit in a bank account. The bank was notified of your departure from Australia. Prior to your departure your household effects were given to your parent for safekeeping. Your personal effects were taken with you to foreign country B; otherwise they were handed to your parents in Australia for safekeeping. Your overseas assets included foreign country B bank account, household effects such as white goods and appliances, television and electronic goods and furniture. You lodged tax returns in foreign country B. You were considered to be tax residence of foreign country B and liable to pay tax to the foreign country B tax office. Family and social connections You did not maintain any professional, social or sporting connections with Australia. Local club membership was cancelled before you left Australia. No professional, social or sporting connections were established while you were in foreign country B. You obtained an overseas qualification in foreign country B. No professional or occupational membership was maintained in Australia while you were overseas in foreign country B. Employment The name of your foreign country B employer is X. Your employment contract has no end date. The employment contract was set up in such a manner that any R&R (rest and return) would be within foreign country B only. The company does not pay for flights to and from Australia other than initial mobilisation and final demobilisation. Your initial plan was to work in foreign country B for several years but unexpected changes at work resulted in terminating the overseas work contract after a year. You have never been employed by the Commonwealth of Australia. You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990. You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976. No position or job was held for you in Australia while you were working in foreign country B.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 subsection 995-1(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 for the period of the ruling. Accordingly you are not a resident of Australia for income tax purposes under subsection 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.