Private ruling: Residency
Date of advice: 9 October 2015
Published: October 2015
Ruling period: Year ended 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2014

Ruling: Question and answer | Are you a resident of Australia for the purposes of the Double Tax Agreement between Australia and Country Y? | No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are a resident of Australia for taxation purposes. You are a resident of Country Y for taxation purposes. You live and work in Country Y. You work X days on and Z days off. You pay tax in Country Y. You receive interest on your Australian bank accounts and have no other income in Australia. You own a block of land in Australia with no house on it. You have a car in Australia, You are on the electoral roll in Australia and you have a Medicare card. When you return to Australia for visits you stay with family and friends. You rent a house in Country Y.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5. | International Tax Agreements Act 1953 Sch4-Art4.

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 non-resident of Australia for taxation purposes, your assessable income includes only income from an Australian source. In determining your liability to pay tax in Australia it is necessary to consider not only the domestic income tax laws but also any applicable double tax agreements. Section 4 of the International Tax Agreements Act 1953 (Agreements Act) incorporates that Act with the Income Tax Assessment Act 1936 (ITAA 1936) and the ITAA 1997 so that all three Acts are read as one. The Agreements Act overrides both the ITAA 1936 and ITAA 1997 where there are inconsistent provisions (except in some limited situations). Section 5 of the Agreements Act states that, subject to the provisions of the Agreements Act, any provision in an Agreement listed in section 5 has the force of law. The Country Y agreement is listed in section 5 of the Agreements Act. The agreement operates to avoid the double taxation of income received by residents of Australia and Country Y. In your case, you are a resident of both Australia and Country Y for tax purposes, according to each country's domestic law. Paragraph A of Article B of the double tax agreement sets out the factors to be considered when determining a person's residence for the purpose of the agreement, where the person is a resident of both Australia and Country Y under domestic law. Where by reason of the preceding provisions of this Article a person, being an individual is, a resident of both Contracting States, then the status of the person shall be determined in accordance with the following rules: (a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person; You only have a permanent home available to you in Country Y. When you return to Australia you stay with family and friends. Therefore for the purposes of the DTA between Australia and Country Y you are not a resident of Australia.