Edited version of private ruling

Authorisation Number: 1011542467666

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

Question 1

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

Answer

No.

Question 2

Is your foreign income from working in country Q included in your assessable income in Australia?

Answer

No.

This ruling applies for the following period:

Year ending 30 June 2010

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You are an Australian citizen.

You departed Australia during the year ended 30 June 2010 to work in country Q.

You intend to reside and work in country Q for the next three to four years before moving back to Australia.

You are living in a rented accommodation in country Q.

You have a cheque account in country Q.

You do not have a permanent place to live in Australia. You lived in a rented house in Australia.

You have a saving account in Australia.

You have no dependants or family member with you in country Q.

You are not a member of the Public Service Superannuation (PSS) Scheme or the Commonwealth Superannuation Scheme (CSS).

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 (ITAA1936). 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 Q, such that it is your settled or usual place of abode.

As you have lived and worked in country Q and intend to remain working in country Q for the next few years. Although you maintain an association with Australia through your investments, your associations with country Q are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that your permanent place of abode 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 members 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 Q.

Foreign income

Subsection 6-5(3) of the Income Tax Assessment Act 1997 (ITAA 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 Q is not included in your assessable income in Australia. Only income from Australian sources will be assessable in Australia.

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).