Disclaimer
This edited version will be removed from the Database after 30 September 2025. If you believe the issues detailed in this edited version warrant retention in an alternative form, email publicguidance@ato.gov.au

This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of private ruling

Authorisation Number: 1011528206994

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Residency - working overseas

Are you an Australian resident for taxation purposes while working overseas?

No.

This ruling applies for the following periods:

Year ending 30 June 2011

Year ending 30 June 2012

The scheme commences on:

1 July 2010

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 an Australian citizen.

Australia is your country of origin.

You depart Australia in 2010 to work in country A for one year. You are not certain if the contract can be extended.

You purchased a return ticket to Australia after completing your one year employment contract.

You have a permanent place to live in country A for the duration of your employment.

You have no assets overseas.

In Australia, you lived with your relative in a rented house.

You have a number of bank accounts in Australia.

You do not have a spouse. Your family did not accompany you to country A.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Reason for decision

The terms resident and resident of Australia, in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:

The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.

The resides test

The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'.

As you are residing outside of Australia, you are not considered to be residing in Australia.

The domicile test

If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.

In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.

In your case, you are an Australian citizen working in Country A for one year. You purchased a return ticket to Australia after completing your one year employment contract. There is no evidence of an intention to make your home indefinitely in any country. Therefore, you are considered to have maintained your Australian domicile.

However, to be considered a resident under this test, the Commissioner must be satisfied that you have a permanent place of abode outside of Australia.

In FC of T v. Applegate 79 ATC 4307; (1979) 9 ATR 899, Fisher J described 'permanent place of abode' as:

In your case, you will live in the same location for the duration of your contract. As such this location will be treated as your home. As such, the Commissioner is satisfied that you have a permanent place of abode outside Australia.

As such you are not considered a resident under the domicile test.

The 183 day and superannuation tests

As you will be overseas for more than 183 days and are not a member of a relevant superannuation fund for the purpose of the superannuation test, you are not considered a resident under these tests either.

Your residency status

As you do not satisfy any of the tests you are considered to be a non resident.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).