Private ruling: Residency of Australia for taxation purposes
Date of advice: 9 April 2026
Published: 29 June 2026
Ruling period: Year ended 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you a resident of Australia for taxation purposes for the relevant income years? | A1: No. | Q2: Is the source of your income from the Australian Employer in Australia? | A2: Yes. | Q3: Are you required to pay tax on your income received from the Australian Employer in Australia? | A3: Yes.

Relevant facts and circumstances: You were born in Australia. You are a citizen of Australia. You relocated to live and work in Country Z a few years ago. You have lived in Country Z since the time of your relocation to the present date. At the time of your move to Country Z, you intended to relocate to Country Z and establish a home there with your then partner (now your spouse) for an indefinite period. You have no intention in the foreseeable future to return to Australia on a permanent basis. You and your spouse were married a few years ago. Your spouse is a citizen of Country Z: they have never lived in Australia. You and your spouse live in a leased property in Country Z. You have lived in permanent accommodation (by way of long-term leases) since you moved to Country Z. You intend to continue residing in Country Z for the foreseeable future. Prior to your departure to Country Z, you were employed by Employer Z. When you relocated to Country Z, you took leave without pay from Employer Z and were subsequently engaged to a position with the Employer Y. You returned to active employment with Employer Z in a position to Country Z. You continued to live and work in Country Z during this time. Employer Z issues your payslips and makes Pay as You Go (PAYG) withholding payments to the Australian Taxation Office on your behalf. Employer Z makes contributions to your superannuation account in Australia. However, to facilitate payment, Employer Z pays your net wage to Employer Y in Country Z. Employer Y then remits the wages owing to you. Your wage is paid in Country Z currency into your Country Z bank account. You obtained a visa from the Country Z government, making you a permanent resident of Country Z. Prior to this, you were living and working in Country Z on another visa. Your Australian assets are limited to a number of bank accounts (with the same bank), an Australian credit card, and your Australian superannuation. You have limited ongoing connections with Australia apart from your parents and siblings, who all reside in Australia. Most of your social connections are located in Country Z. You have short-term social visits to Australia each year, since you relocated to live in Country Z. These visits have generally been a couple of weeks in length. You have visited your parents, siblings, and extended family members. You have made some work trips to Australia since resuming work with Employer Z. These work-related trips were for a few days each time. As you have been an ongoing employee with Employer Z, you entered an original contract when you first became employed by Employer Z whilst you were living in Australia. You were not required to sign a new written contract in taking your new position with Employer Z in Country Z, because taking up the posting involved an internal transfer at level within the organisation. Instead, after you applied for the position, you were offered the position verbally and then accepted the role via email. This occurred a couple of years ago and you were in Country Z. You changed the end date of your position with Employer Z as you will be leaving your job. You intend to remain living and working in Country Z. As an employee of Employer Z, your employment and conditions of service are governed by the Employer Z Agreement governing all employees.

Relevant legislative provisions: Income Tax Assessment Act 1936 subsection 6(1) | Income Tax Assessment Act 1936 section 6-5 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition has four tests to determine your residency for income tax purposes. These tests are: • the resides test • The domicile tests • The 183-day test, and • the Commonwealth superannuation fund test. It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes. Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals . | Detailed Reasoning - The resides test: The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides, you are considered an Australian resident for tax purposes. Some of the factors that can be used to determine whether you reside in Australia include: • period of physical presence in Australia • Intention or purpose of presence • Behaviour while in Australia • Family and business/employment ties • Maintenance and location of assets • Social and living arrangements. No single factor is decisive, and the weight given to each factor depends on your specific circumstances. Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests. | Detailed Reasoning - The domicile tests: Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia. Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile. For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent). Whether your permanent place of abode is outside Australia is a question of fact to be determined considering all the facts and circumstances of each case. Key considerations in determining whether you have your permanent place of abode outside Australia are: • whether you have abandoned, in a permanent way, living in Australia • length of overseas stay • nature of accommodation, and • durability of association | Detailed Reasoning - The 183-day test: Under the 183-day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both: • Your usual place of abode is outside Australia, and • You do not intend to take up residence in Australia. The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when are physically in a country. | Detailed Reasoning - The Commonwealth superannuation test: An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976 , or they are the spouse, or the child under 16 of such a person. | Detailed Reasoning - Application to your circumstances: We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that for the relevant period you are not a resident of Australia as follows. Considering your individual circumstances, we have concluded that you are not a resident of Australia according to ordinary concepts. You have been living and working in Country Z for several years. You do not intend on returning to Australia to live and work for the foreseeable future. You live with your spouse in Country Z. You are a permanent resident of Country Z. We also consider that your domicile is in Country Z as you hold a visa which means you are now a permanent resident of Country Z. Therefore, your domicile of choice is Country Z and you are not a resident of Australia under the domicile test. You were not in Australia for more than 183 days in the previous income year and you do not intend on being in Australia for more than 183 days in the following income year. You are not a resident under this test. You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test. You are not a resident of Australia for taxation purposes for the relevant income years. Source of Income : 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. In Nathan v. Federal Commissioner of Taxation [1918] HCA 45 at [189-190] it was recognised that the ascertainment of the actual source of a given income is a practical, hard matter of fact. As stated by Bowen J in Federal Commissioner of Taxation v. Efstathakis [1979] FCA 49 (the Efstathakis Case ) at [9], to determine source: ... the answer is not to be found in the cases, but the weighing of the relative importance of the various factors which the cases have shown to be relevant. In the Cam , French and Efstathakis cases it was held that the source of the income was where the taxpayer performed the services: Commissioner of Taxation v Cam & Sons Ltd [1936] NSWStRp 34 (the Cam Case ) - concerned wages paid to seamen employed to work on trawlers. They were engaged and paid in New South Wales, but most of their services were provided outside state territorial waters. Jordan CJ, with whom Street and Bavin JJ agreed in the Cam Case at [548], held that: Where income is derived from wages or salary, again the source has several factors. Personal exertion may be involved in negotiating and obtaining the contract of employment, in performing the stipulated services, and obtaining payment for them.... [I]n the ordinary case of the employment of a seaman... where there is nothing special, either in the circumstances of the contract of employment or in the payment, and where the work is both done and paid for in the ordinary course, the all-important factor is the doing of the work; and the contract of employment and the payment are relatively insignificant and formal elements. But this is not necessarily the case with respect to all wages or salary. In the case of an appointment to a sinecure, the engagement and the payment may be the only significant factors. Accordingly, the wages had to be apportioned based on 'working time in and out of New South Wales territorial waters. Federal Commissioner of Taxation v French [1957] HCA 73 (the French Case ) - the taxpayer was employed as an engineer by the Australian company CSR which carried on business in New South Wales and, relevantly, New Zealand. Each year, the taxpayer spent two or three weeks in New Zealand as inspecting engineer for the company in its New Zealand business. At all other times, the taxpayer performed services for the company in New South Wales. A majority of the High Court held that the wages paid in respect of the period in New Zealand were sourced in New Zealand, because this is where the services were performed, this being the most important factor in Mr French's situation (see French Case at [411, 417 and 422]). However, the Court also made comments to the effect that this decision did not necessarily determine what would be most important in every personal services contract. For example Dixon CJ in the French Case at [405] in relation to a director and at [406] in relation to an accountant procured to achieve a specified result, and Kitto J at [417-418] refers to a situation where remuneration was payable regardless of service, and to a person who worked sometimes overseas who was paid while on sick leave, and to where a period of overseas service might in substance be merely incidental to Australian service., and In the Efstathakis Case - the taxpayer was a Greek National resident in Australia who was employed by the Greek Government as a secretary/typist in the Greek embassy. She had applied for the job in Greece, and the post had been gazetted there. She performed the services in Australia. Her net pay was compiled in Greece, a cheque was drawn on a bank in Greece and then received in Australia. A condition of her employment was that she could be posted anywhere in the world, but she would probably have resigned, as she had put down roots in Sydney, having a child there, buying a unit, and marrying a naturalised Greek Australian. Bowen CJ, with whom Brennan and Deane JJ agreed, held that the wages paid to the taxpayer had an Australian source. His Honour considered the above factors, but gave most weight to 'the residence of the taxpayer in Australia and the facts that the services were performed and payment received [in Australia]. The payment of remuneration depended upon actual performance of the services (the Efstathakis Case at [11]). As per the above cases, cases concerning the provision of personal services are decided by weighing up the outcomes of the consideration of the following three factors (with the weighting given to each determined by their relevance to the case): • the place where the contract of employment is entered, • the place where remuneration is payable, and • the place where the services are performed. In your situation, you are employed by Employer Z. The initial contract of engagement was formulated, prepared, and is governed by the laws that apply in Australia. Therefore, this factor significantly leans towards the source of the income being Australia. Your remuneration is paid by your Australian employer to Employer Y located in Country Z and it is then paid by Employer Y to you in Country Z currency into your Country Z bank account. Therefore, these factors lean towards the source of the income being Australia. As mentioned above, in the Cam , French and Efstathakis cases, it was held that the source of the income was where the taxpayer performed the services. However, in those cases the place where the taxpayer was located was the same as where the taxpayer did the work, where it was given effect to and where the outcome of the work occurred. Your case is distinguished from these cases, as the place where your work was given effect to, and where the outcome of the work occurred, was with your employer in Australia. On the physical location of where your duties are performed alone, this would lean towards the source of the work being in Country Z. However, your physical location is not sufficient, the other factors listed above are also relevant. Considering this, the third factor leans towards the income being sourced in Australia. After considering all of the factors relating to your employment with Employer Z, remuneration, your duties and services you perform, the income you earned from your employment with Employer Z is regarded as being sourced in Australia. In determining your liability to pay tax in Australia it is necessary to consider any applicable double tax agreements (DTA). Sections 4 and 5 of the International Tax Agreements Act 1953 (Agreements Act) incorporate that Act with the ITAA 1936 and the ITAA 1997 and provide that the provisions of a double tax agreement have the force of law. Australia has a DTA with Country Z. The application of the DTA means that as your income from Employer Z is Australian sourced, and as you are a citizen of Australia and not Country Z, your income derived from your employment with Employer Z is assessable in Australia. As a non-resident of Australia for taxation purposes, you are required to declare and pay tax on your Australian sourced income in Australia. You are required to declare your income from your work with Employer Z in your Australian tax return and you will be taxed at the non-resident rates of tax.