Private ruling: Residency
Date of advice: 7 October 2020
Published: November 2020
Ruling period: Year ended 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2019

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

Relevant facts and circumstances: You were born in country Y. You are a citizen of country Y. You arrived in Australia with your family in 20xx. You entered Australia on a temporary visa. The visa allows you to apply for a permanent residency visa after 3 years. Since your arrival you have been living in a rental house with your family. Since your arrival you have not been absent from Australia. Prior to coming to Australia, you were living in your family house in country Y. Your family house in country Y was left vacant. You own bank accounts and a car in Australia. You maintain your membership with your home country church. You do not receive any income from sources outside of Australia. You intend to reside in Australia permanently. You and your spouse are not eligible employees in the Commonwealth Superannuation Scheme (CSS) or Public Sector Superannuation Scheme (PSS).

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) | Income Tax Assessment Act 1997 Section 995-1

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 (and permanent place of abode) 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. | Detailed Reasoning - The resides test: The resides test is the primary test for determining the residency status of an individual for taxation purposes If residency is established under the resides test, the remaining three tests do not need to be considered. However, if residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests. The 'resides test' considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. As the word 'reside' is not defined in Australian taxation law, it takes its ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936. The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'. Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia , discusses the Commissioners view on the application of the 'resides' test when determining an individual's residency status. As per Taxation Ruling TR 98/17, your behaviour whilst you are staying within Australia is used as an indicator as to your status of resident for the given period. In your case, you travelled to Australia with your family; your spouse has gained long term employment; you entered a rental agreement and participated in social activities. Given your circumstances as a whole it is accepted that you are a resident of Australia for taxation purposes from arrival.