1011528229091 | Legal database

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Edited version of private ruling

Authorisation Number: 1011528229091

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Ruling

Subject: Residency - salary

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

No.

2. Is your foreign income from working in country A included in your assessable income in Australia?

No.

This ruling applies for the following period:

Year ended 30 June 2010

The scheme commences on:

1 July 2008

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.

You departed Australia to work in country A. You have an open ended employment contract with a foreign company and you intend to remain working in country A.

You have not determined when you will be returning permanently to Australia.

You have returned to Australia on a very occasional basis to visit your children, family and friends.

You have been living in the same apartment. The self-contained apartment is provided by the company as part of employment contract.

You have a bank account overseas.

You lived in a rented house in Australia.

You have an investment property, bank accounts, share portfolio and superannuation fund in Australia.

You are separated from your spouse. Your children are living with their mother in Australia.

You state that you have been removed from the Australian electoral roll.

You are not a member of the Commonwealth Government of Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 Subsection 6-5(3)

Reasons for decision

Residency

The terms 'resident' and 'resident of Australia' are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936). The definition provides a series of tests to ascertain whether a person is a resident of Australia.

Two of the tests that are relevant to your circumstance depend on whether or not you could be considered to be residing permanently or for a considerable period of time in country A, such that it is your settled or usual place of abode.

You have lived and worked in country A and intend to remain working in country A. Although you maintain an association with Australia through your family and investments, your associations with country A are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that you have a permanent place of abode that is outside Australia.

The other residency test that is potentially relevant to your circumstances involves membership of a superannuation scheme set up for employees of the Commonwealth. As you are not a member of such a scheme, however, this test will not apply.

In view of the above, it has been concluded that you will not be a resident of Australia for tax purposes during the period of your residence in country A.

Foreign income

Subsection 6-5(3) of the Income Tax Assessment Act 1997 provides where you are a foreign resident of Australia for taxation purposes, your assessable income includes only income derived from an Australian source.

Accordingly, as you are a foreign resident of Australia from the date of your departure, your foreign income from working in country A is not included in your assessable income in Australia. Only income from Australian sources will be assessable in Australia.

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