Edited version of private ruling

Authorisation Number: 1011564117645

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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 ended 30 June 2010

Year ending 30 June 2011

Year ending 30 June 2012

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You travelled to country X several years ago, on a one year employment contract.

You are still in country X with your current contract expiring on a set future date.

Your accommodation in country X is provided by your employer.

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

Your parents and relatives live in Australia.

You have travelled on holidays back home to Australia to visit your family.

You met your spouse while working in country X.

Your spouse has been granted a permanent Australian Visa and will be applying for citizenship.

You have a bank account in country X, which is used for payment of your salary, day to day living and small savings.

You have a bank account and superannuation account in Australia.

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

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

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 X, such that it is your settled or usual place of abode.

You have lived and worked in country X for several years and intend to remain working there. Although you maintain an association with Australia through your family and investments, your associations with country X are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that you have established a permanent or long-term residence outside of 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 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 while working overseas.

Note

Lodgement of tax returns

Foreign residents only need to lodge a tax return if they have income that is taxable in Australia. This excludes any income from which non-resident withholding tax has been deducted. Examples of income that may be subject to non-resident withholding tax are bank interest.

Foreign residents are not required to lodge a 'Non-lodgement advice' if their Australian source income is only from bank interest.

In your case, you will only be required to lodge an Australian income tax return if you have Australian sourced income from which there has been no withholding tax deducted.

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