Private ruling: Residency
Date of advice: 12 November 2025
Published: 5 January 2026
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you a resident of Australia for tax purposes for the year ended 30 June 20YY? | A1: No. | Q2: Will your working holiday maker (WHM) income be taxed on the same basis as an Australian resident for the 20YY income year? | A2: No.

Relevant facts and circumstances: You are a citizen of Country A. From MM 20YY until MM 20YY, you lived in Country A and studied Course A. From MM 20YY until MM 20YY, you travelled to Country B on an academic exchange programme as part of Course A. From MM 20YY until MM 20YY, you lived in Country A and completed your Course A. From MM 20YY to MM 20YY, you were living and working full time in Country A as a Job A for Company A. On DD MM 20YY, you arrived in Location A Australia on a Working Holiday visa (Subclass 417). Your visa was granted on DD MM 20YY and was valid for XX months. You spent a few months travelling along the East Coast of Australia. On DD MM 20YY, you settled in Location B Australia in a share flat with a monthly rolling lease. In the following months until MM 20YY, you were actively seeking employment for a sponsorship opportunity to assist you in staying in Australia permanently. You intend to obtain permanent residency and Australian citizenship in the future. On DD MM 20YY, your employer applied for the subclass 482 visa. You provided documentation that confirms that the visa was approved on the same date. Your intention to take up residency, through employment sponsorship and the approval of a more long term visa did not occur during the ruling period. From DD MM 20YY, you had temporary full time employment with Company A. During the ruling period you also earned assessable income at major Australian banks and insurance companies. In Australia, you are a member of a social sporting team and participate in weekly games. You have held a gym membership in Australia since MM 20YY. You have an Australian bank account. You have a bank account in Country A. You do not own or rent a property in Country A. Your family resides overseas. You have no financial obligations in Country A, and do not wish to live there anymore. You have a Superannuation account with Company B in Australia. You are not a contributing member or, the spouse of or a child under 16 of a person who is a member of the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS).

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 6(1) | Income Tax Rates Act 1986 Subsection 3A(1) | Income Tax Rates Act 1986 Part I of Schedule 7 | Income Tax Rates Act 1986 Part III of Schedule 7 | Income Tax Assessment Act 1997 Subsection 995-1(1)

Reasons for decision: Summary: No. | Detailed Reasoning - Question 2: Will your working holiday maker (WHM) income be taxed on the same basis as an Australian resident for the 20YY income year? | Summary: No | Detailed Reasoning - Question 1: 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', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are: • the resides test (also referred to as the ordinary concepts test) • the domicile test • the 183-day test, and • the Commonwealth superannuation fund test. The resides test is the primary test for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'. 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 (the domicile test, 183-day test and Commonwealth superannuation fund test). Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals . We have considered the statutory tests listed above in relation to your situation as follows: | Detailed Reasoning - The resides test: The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'. The observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important: Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained. The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test: • 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. It is important to note that no one single factor is decisive, and the weight given to each factor depends on each individual's circumstances. Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia. | Detailed Reasoning - Application to your situation: You are not a resident of Australia under the resides test for the year ended 30 June 20YY based on the following: • You stay in temporary accommodation in Australia. • You are in Australia on a temporary WHM 417 visa. • You are not yet able to apply for permanent residency or Australian-citizenship. You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test, 183-day test and Commonwealth superannuation fund test). | Detailed Reasoning - Domicile test: Under the domicile test, you are a resident of Australia if your domicile is in Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia. | Detailed Reasoning - Domicile: Whether your domicile is in Australia is determined by the Domicile Act 1982 and the common law rules on domicile. Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts. | Detailed Reasoning - Application to your situation: In your case, you are a citizen of Country A, and your domicile of origin is Country A. It is considered that you did not abandon your domicile of origin in Country A and acquire a domicile of choice in Australia. You are not entitled to reside in Australia indefinitely and even though you are living in Australia, you only hold a temporary WHM visa. Therefore, your domicile is Country A, and you are not a resident of Australia for tax purposes under the domicile test. | Detailed Reasoning - 183-day test: Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both: • the person's usual place of abode is outside Australia, and • the person does not intend to take up residence in Australia. | Detailed Reasoning - Application to your situation: You have been in Australia for 183 days or more in the 20YY income year. Therefore, you will be a resident under this test unless the Commissioner is satisfied that your usual place of abode was outside Australia, and you do not have an intention to take up residence in Australia. | Detailed Reasoning - Usual place of abode: In the context of the 183-day test, a person's usual place of abode is the place they usually live and can include a dwelling or a country. A person can have only one usual place of abode under the 183-day test. However, it is also possible that a person does not have a usual place of abode. This is the case for a person who merely travels through various countries without developing any strong connections. If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, we will examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode: Emmett J at [78] in Federal Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836. | Detailed Reasoning - Application to your situation: The Commissioner is satisfied that your usual place of abode is no longer overseas in Country A for the year ended 30 June 20YY based on the following: • You stayed in temporary accommodation in Australia. • You do not own or rent a property in Country A. • You have no financial obligations in Country A and do not wish to live there anymore | Detailed Reasoning - Intention to take up residency: To determine whether you intend to take up residence in Australia, we look at evidence of relevant objective facts. 'Intend to take up residency' does not merely mean intend to stay for a long time. It means intending to live here in such a manner that you would reside here. | Detailed Reasoning - Application to your situation: The Commissioner is satisfied that you did not intend to take up residence in Australia for the 20XX income year because: • You arrived in Australia with the intention of taking a working holiday and were granted a temporary 417 visa valid for XX months. • You stayed in temporary accommodation in Australia on a month to month rolling lease. • During the ruling period you had employment of a temporary nature, although full time, and • Your intention to take up residency, through employment sponsorship and the approval of a more long term visa did not occur during the ruling period. | Detailed Reasoning - 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 partner, or the child under 16 of such a person. | Detailed Reasoning - Application to your situation: You are not a member on behalf of whom contributions are being made to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or a partner of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test. | Detailed Reasoning - Conclusion: As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the income year ended 30 June 20YY. | Detailed Reasoning - Ordinary tax rates for Australian residents for taxation purposes: The tax rates for resident taxpayers are contained in Part I of Schedule 7 of the Income Tax Rates Act 1986 (ITRA 1986). Residents are taxed on all of their worldwide income, which means all of the income they earn in Australia and outside Australia is included in their income tax return. Residents are entitled to the benefit of a tax-free threshold under which the first $18,200 of taxable income earned is tax-free. Taxable income in excess of the tax-free threshold amount will be taxed at progressive rates in accordance with the taxable income earned during each income year. | Detailed Reasoning - Tax rates for working holiday makers: WHM has the meaning given by subsection 3A(1) of the ITRA 1986 as an individual who holds a Subclass 417 Working Holiday visa or Subclass 462 Work and Holiday visa or a bridging visa in relation to an application for such a visa, or a Covid-19 pandemic event 408 visa. The taxation of WHMs is administered under Part III of Schedule 7 of the ITRA 1986, sometimes referred to as the 'backpacker tax', and has effect for the period you are considered to be a WHM. Income earned in Australia from Australian sources is included in a WHM's taxable income while they are a WHM, less so much of any amount the individual can deduct for the income year that relates to that assessable income. From January 2017, WHMs are taxed at a special rate of 15% on their taxable income earned in Australia up to $45,000 in the 2024-25 income year, with ordinary tax rates applying to taxable income exceeding that amount. However, as a result of the High Court decision in Addy v Commissioner of Taxation [2021] HCA 34 (Addy case) some WHMs may be taxed on the same basis as a resident Australian national, rather than the WHM rates that usually apply. This applies where an individual satisfies all of the following: • are the holder of a Working Holiday visa or Work and Holiday visa • you became a resident of Australia for tax purposes for the whole or part of the income year • you are a citizen or national from one of the following countries which has a non-discrimination article (NDA) in its tax treaty with Australia: - Chile - Finland - Germany - Israel (for 2020-21 and later income years) - Japan - Norway - Turkey; and - United Kingdom. | Detailed Reasoning - Application to your situation: For the period of the ruling: • You are a citizen of Country A. • You entered Australia on a temporary WHM visa. • Country A is not a country which has an NDA in its tax treaty with Australia. • You are not a resident of Australia for taxation purposes for the 20YY income year. In your case, you are not an Australian resident for tax purposes for the 20YY income year, therefore, you will not be taxed the same as a resident Australian national and will be subject to the 15% WHM rates on your working holiday taxable income that does not exceed $45,000 and 30% on that which exceeds $45,000 but does not exceed $135,000. This means you will not be eligible for the tax-free threshold.