Private ruling: Residency
Date of advice: 30 November 2016
Published: April 2017
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Question and answer | Are you a resident of Australia for taxation purposes?

Relevant facts and circumstances: General Your country of origin is a foreign country. You are a citizen of a foreign country. In the five years prior to your arrival in Australia you lived in a foreign country. You arrive in Australia. The purpose of your visit is to obtain employment. The type of visa you were granted do not allow you to stay in Australia permanently. You have not applied to have the end date of your current visa extended. You have not applied for citizenship or permanent residency since your arrival in Australia. Your intention is to reside in Australia permanently. You departed Australia for holidays on several occasions: You have not previously entered Australia since your first arrival. You have not lodged any foreign income tax returns while living in Australia. Family and social connections You do not have a spouse. You do not have any dependants. None of your family accompanied you to Australia. You have not yet developed any professional, social or sporting connections in Australia. You have not maintained any professional, social or sporting connections with a foreign country. Accommodation and assets In Australia you live in rented accommodation. In a foreign country you lived in rented accommodation. While in Australia you do not have a permanent home available for your use in a foreign country. You have no assets outside of Australia. Your only asset in Australia is a superannuation account. Income and employment You do not receive any income from sources outside of Australia. While in Australia you do not still have an employment position or job being held for you in any overseas country. You have employment in Australia. You have never been a Commonwealth of Australia Government employee for superannuation (super) purposes. You have not enrolled in any course of study while in Australia that was for more than six months.

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 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. 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). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are: ● the resides test ● the domicile test ● the 183 day test ● 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 (IT 2650) . The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests. | Detailed Reasoning - The resides (ordinary concepts) test: The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word ' resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test. Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test: (i) Physical presence in Australia (ii) Nationality (iii) History of residence and movements (iv) Habits and "mode of life" (v) Frequency, regularity and duration of visits to Australia (vi) Purpose of visits to or absences from Australia (vii) Family and business ties to different countries (viii) Maintenance of place of abode. These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in IT 2650 and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia . It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances. There are several factors outlined above which indicate that you are a resident of Australia, specifically: ● You moved to Australia from a foreign country to live and work. You have not previously entered Australia. ● The purpose of your visit is to obtain employment. ● Your intention is to reside in Australia permanently. ● In Australia you live in rented accommodation. You have no residence in a foreign country. ● You have permanent employment in Australia. You do not have a position being held for you in a foreign country. ● You have no spouse or dependants and no family accompanied you to Australia. ● You have not lodged any foreign income tax returns while living in Australia. ● You do not receive any income from sources outside of Australia. ● You do not own any assets in a foreign country but in Australia you contribute to a superannuation fund account. Based on a consideration of all of the factors outlined above, you are a resident of Australia according to ordinary concepts as you maintained a continuity of association with Australia for the period of the ruling. | Detailed Reasoning - Your residency status: As you are a resident of Australia under one of the tests of residency outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you are considered to be an Australian resident for taxation purposes.