Private ruling: Residency
Date of advice: 22 December 2017
Published: May 2018
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: XX/XX/XX

Ruling: Q1: Did you cease to be a resident of Australia for taxation purposes when you departed Australia? | A1: Yes.

Relevant facts and circumstances: You are a citizen of Australia and you hold an Australian passport. You were born in Australia. You departed Australia during the 20XX - XX financial year. You have a work visa and you are a temporary resident for non-touristic reasons with work permitted issued by a foreign government. Your visas are given on a six monthly basis, which are rolled over to coincide with work contracts. Your main reason for going to the foreign country is primarily for work and as a result you have made it your place of abode. You also take the opportunity in your down time to explore the country and surroundings. You intend to reside overseas for at least two years and this could possibly extend beyond two years, if not permanently. You have no plans yet to return to Australia permanently other than a planned holiday to visit family. Since leaving Australia you have visited Australia a few times for short periods to visit family and to attend to other personal matters. You are currently renting an apartment in the foreign country and you have provided a copy of the lease agreement. The lease is for a period of XX years. You do not have any assets overseas. You do not have a permanent place to stay in Australia. When you visit you stay with your sibling. You have XX savings accounts in Australia. You do have an employment contract with your current employer which initially runs for XX years. There is an option for an extension. You pay tax on your contract income in the foreign country; you are assessed based on their tax system. You live overseas by yourself; your children live in another country with their parent. You do not have any social or sporting connections in Australia. You do not have any social or sporting connections outside Australia. You are not an Australian Commonwealth Government employee, nor have you been a spouse of one.

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

Reasons for decision: Summary: Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax 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: (i) the residence according to ordinary concepts test; (ii) the domicile/permanent place of abode test; (iii) the 183 days/usual place of abode test; and (iv) the Commonwealth superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. Based on the facts you have provided, we can conclude that you do not satisfy any of the tests of residency. Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.