Private ruling: Residency
Published: January 2014
Ruling period: 1 July 2013 to 30 June 2014.
Date scheme commenced: 1 July 2013.

Ruling: Question and answer: | Will you be a resident of Australia for taxation purposes between 1 July 2013 and 30 June 2014? | No.

Relevant facts and circumstances: You were born in another country. You are a citizen of another country. You are not a citizen of any other country. You usually live in another country where you are entitled to reside permanently. You have a house in another country. You have a family. Your family resides in another country. You have friends in another country. You pay income tax in another country. You have been employed permanently in another country for many years. You are an employee of a foreign company that has a project in Australia (the Australian project). Your foreign employer sends you to Australia in relation to the Australian project. Between 1 July 2013 and 30 June 2014 you may spend more than 183 days in Australia because of the Australian project. Your trips to Australia are purely for work purposes related to the Australian project. You come to Australia on an E-visitor visa. Your E-visitor visa does not allow you to stay permanently in Australia. When you come to Australia you stay by yourself in different apartments. No members of your family accompany you on your trips to Australia. You have a permanent place to live overseas. You do not rent this out when you travel to Australia. You do not have a permanent place to stay in Australia. You have no assets in Australia. Your only connections in Australia are professional ones. You have never been employed by the Australian government. You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990. You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976. You are not the spouse or a child under 16 of a person who is a member of the PSS or an eligible employee in respect of the CSS.

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

Reasons for decision: Detailed Reasoning - Residency for taxation purposes: 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: · the resides test, · the domicile test, · the 183 day test, and · the superannuation test. If any one of these tests is met, an individual will be a resident of Australia for taxation purposes. The resides test is the primary test for determining the residency status of an individual for taxation purposes. If residency is established under the resides test, the remaining three tests do not need to be considered. However, if residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests. | Detailed Reasoning - The resides test: The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. As the word 'reside' is not defined in Australian taxation law, it takes it's ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936. The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'. The question of whether an individual 'resides' in a particular country is a question of fact and degree and not of law. In deciding this question, the courts have consistently referred to and taken into account the following factors as being relevant (Case 5/2013 (2013) AATA 394, paragraph 49): (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 Australia and the other country, and (viii) maintenance of a place of abode. No single factor is necessarily decisive, many are interrelated and the weight given to each factor varies depending on individual circumstances. Having considered the facts of your case, we cannot conclude you will be residing in Australia according to the ordinary meaning of the word between 1 July 2013 and 30 June 2014. In particular we note that: · Although you may spend in excess of 183 days in Australia between 1 July 2013 and 30 June 2014, your trips to Australia are purely for business purposes related to the Australian project of your foreign employer. · You have no permanent place to stay in Australia but you do have a permanent place to live overseas. · You usually live in another country with some of your family and none of your family accompanies you when you travel to Australia. · Your family and friends are all in another country and you have only some professional contacts in Australia. · You have no assets in Australia and no intention of living here. In view of the above, you will not be a resident of Australia for taxation purposes under the resides test between 1 July 2013 and 30 June 2014. | Detailed Reasoning - The domicile test: Under this test, a person whose domicile is in Australia will be a resident of Australia for taxation purposes. A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin' and will not usually change, but can in some circumstances. For example, a person can acquire a domicile in another country by choice but to do so, a person must have an intention to make their home indefinitely in a country outside their domicile of origin. Your domicile of origin is outside of Australia and it cannot be said that you have obtained a domicile of choice in Australia because you have stated you have no intention of living in Australia. You will not be a resident of Australia under the domicile test between 1 July 2013 and 30 June 2014. | Detailed Reasoning - The 183-day test: Under this test, a person who is in Australia for 183 days (not necessarily consecutively) during an income year may be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia. Taxation Ruling TR 98/17 - Income tax: residency status of individuals entering Australia specifies that in most cases, if an individual is not residing in Australia under the resides test, their usual place of abode is outside Australia. As previously discussed, you are not a resident of Australia under the resides test. Rather, you travel here for work purposes and although you may spend more than 183 days in Australia between 1 July 2013 and 30 June 2014, the Commissioner accepts that your usual place of abode is in another country where you usually live with your family. You will not be a resident of Australia under the 183 day test between 1 July 2013 and 30 June 2014. | Detailed Reasoning - The superannuation test: This test is not relevant in your situation as it only applies to persons eligible to contribute to the superannuation funds for Australian government officers, their spouses, or their children under the age of 16 years. | Detailed Reasoning - Conclusion - your residency status: You will not satisfy any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 between 1 July 2013 and 30 June 2014 and will not be a resident of Australia for taxation purposes during that time.