Private ruling: Residency
Published: August 2014
Date scheme commenced: 1 July 2014

Ruling: Question and answer: | Are you a resident of Australia for income tax purposes? | Yes.


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

Reasons for decision: Detailed Reasoning - Residency: The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936) and subsection 995(1) of the ITAA 1997. The definition provides four tests which will help us ascertain whether you were a resident of Australia for income tax purposes when you came here on a working holiday in mm/yyyy. These tests are: (i) residence according to ordinary concepts; (ii) the domicile test; (iii) the 183 day/usual place of abode test; and (iv) the Commonwealth superannuation test. The primary test for deciding your residency status is whether you resided in Australia according to the ordinary meaning of the word resides. However, where you were not residing in Australia according to ordinary concepts, you may still have been considered a resident of Australia for tax purposes if you satisfied the conditions of one of the other three tests. | Detailed Reasoning - Residence according to ordinary concepts: The ordinary meaning of the word 'reside', according to the Macquarie Dictionary , 2001, rev. 3 rd 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 residency status for tax purposes of individuals entering Australia. The ruling states that when determining residency according to ordinary concepts we must look at all the facts and circumstances of each individual. In particular, their behaviour and period of physical presence in Australia are significant aspects and are examined together with the following factors: _ intention or purpose of presence; _ family and business/employment ties; _ maintenance and location of assets; and _ social and living arrangements Behaviour You arrived in Australia for the purpose of a working holiday. You are single with no dependants. On arrival in Australia you gained an employment contract for a number of months through an employment agency. This contract can be extended for a further 6 months. You are living in a long term rental apartment with friends. The only assets that you own are a motor vehicle and tools that are all located in Australia. You have joined a local gym in Australia and are a member of a sporting organisation. This behaviour is consistent with someone who has established a routine or pattern of habitual behaviour in Australia. Period of physical presence in Australia When behaviour consistent with residing here is demonstrated over a considerable time, you will be regarded as a resident from the time the behaviour commences. The Commissioner's view of the law is that 6 months is a considerable time when deciding whether an individual's behaviour is consistent with residing here. In your case you entered Australia on a working holiday visa. You have not left Australia since your arrival. Although you are planning to return to country Y for a short holiday, your intention is to return to Australia and live for a number of years. | Detailed Reasoning - Conclusion: In view of the above, the Commissioner considers that your behaviour in Australia reflects a degree of continuity, routine and habit that is consistent with residing here. Accordingly, you are considered to be an Australian resident for taxation purposes from the time you arrived in Australia under the 'resides test'. As you have satisfied one of the four residency tests, it is not necessary to consider the remaining 3 tests. | Detailed Reasoning - Your residency status: As you are considered to be a resident of Australia under one of the tests of residency outlined in subsection 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936, you are considered to be an Australian resident for taxation purposes for the income years included in this ruling.

Relevant facts: You were born in country Y and are a citizen of country Y. | You arrived in Australia for a working holiday on a working holiday visa. Once the visa expires you intend to apply for an extension. | While in Australia you are living in a rented apartment with friends. | On arrival in Australia you gained an employment contract for a number of months with an employment agency that can be extended. | While in Australia you are not paying income tax to any other jurisdiction. | You have not left Australia since your arrival. Although you are returning to country Y for a short holiday, your intention is to return to Australia. | The majority of your assets are held in Australia. | You do not have any social or sporting ties in country Y. | Your social and sporting ties in Australia consists various memberships. | You intend to stay in Australia for a number of years.