Private ruling: International Residency
Date of advice: 8 February 2018
Published: June 2018
Ruling period: Period ending 30 June 2018 | Period ending 30 June 2019 | Period ending 30 June 2020
Date scheme commenced: 1 July 2017

Ruling: Q1: Will you be a non-resident of Australia under section 6(1) of the Income Tax Assessment Act 1936 ? | A1: Yes | Q2: Will you be a non-resident of Australia under section 6(1) Income Tax Assessment Act 1936, if your spouse is an Australian resident for tax purposes? | A2: Yes | Q3: If you are a resident of Australia for tax purposes under section 6(1 ) Income Tax Assessment Act 1936, will you be a treaty resident of Country A under article XX of the Agreement between the Government of Australia and the Government of Country A for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (“DTA”)? | A3: Not applicable | Q4: Will you be exempt from taxation under article YY of the DTA in relation to your remuneration derived from your CEO duties of the joint venture? | A4: Yes | Q5: Will you be exempt from taxation in Australia under article ZZ of the DTA in relation to your remuneration derived from your local Australian academic position with an Australian university where they will be conducting research and presenting teachings? | A5: Yes

Relevant facts and circumstances: You are a citizen of Country A. You have not lived in Australia previously. You are currently employed by an entity which is a joint venture between an Australian University and a university based in Country A. You will be in Australia to conduct research and provide teachings Your time in Australia will not exceed 183 days in any financial year. The costs associated with your duties will not be borne by the Australian University. You will travel to Australia on a temporary visa. You maintain a permanent home in Country A in which you currently reside and to which you will return to upon departing Australia after each trip. Your home will remain untenanted and available for use at all times. You will retain your house and bank accounts in Country A. When in Australia you and your spouse will be staying in temporary rental accommodation (campus accommodation or serviced apartment). Your spouse is also a citizen of Country A. Your spouse is likely to seek employment in Australia. Your spouse may spend more than 183 days in Australia in each financial year. Your spouse will periodically return with you to Country A. Your spouses’ employer will sponsor your spouse on an Australian temporary visa. You and your spouse are not eligible to contribute to an Australian Commonwealth Superannuation Scheme

Relevant legislative provisions: Section 6(1) Income Tax Assessment Act 1936

Reasons for decision: Detailed Reasoning - Detailed reasoning: There are four tests for determining whether an individual is a resident for tax purposes. These tests are: (1) residence according to ordinary concepts; (2) the domicile and permanent place of abode test; (3) the 183 day test; and (4) the Commonwealth superannuation fund test. On the information and facts provided, you do not meet any of the tests and are therefore considered a non-resident for tax purposes. | Detailed Reasoning - Detailed reasoning: While in some circumstances the circumstances of a spouse may influence the residency status of an individual, as you have had no previous relationship, and are only visiting Australia on a very short term basis your spouse’s residency status does not make you a tax resident of Australia. | Detailed Reasoning - Detailed reasoning: You are not a resident of Australia for tax purposes under section 6(1) Income Tax Assessment Act 1936 , so you are a resident of Country A under Article XX of the Agreement between the Government of Australia and the Government of Country A (Double Tax Agreement or “DTA”) and the ‘tie-break’ provisions of that article are not operative. | Detailed Reasoning - Detailed reasoning: Under Article YY of the DTA, a resident of Country A can be exempt from taxation of their employment income derived in Australia where the following conditions are met: ● the recipient is present in Australia for a period or periods not exceeding in the aggregate 183 days in a year of income in Australia; and ● the remuneration is paid by, or on behalf of, an employer who is not a resident of Australia; and ● the remuneration is not deductible in determining taxable profits of a permanent establishment or a fixed base which the employer has in the Australia. As you meet all points for determining exemption from taxation –you will not exceed 183 days, the Joint Venture is not a resident of Australia and your employment will remain with the joint venture you will be exempt from taxation under article YY of the DTA in respect to your remuneration derived from your duties pertaining to the joint venture. | Detailed Reasoning - Detailed reasoning: As you are a resident of County A and have a requirement to report your income in that country, you meet the requirements of Article ZZ of the DTA that states the income from the activities from your role with the Australian university would be exempt from tax in Australia.