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Edited version of private ruling
Authorisation Number: 1011627110279
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Ruling
Subject: Residency for tax purposes
Are you a resident of Australia under article x of the double taxation agreement between Australia and Country A?
Yes.
This ruling applies for the following period:
Year ending 30 June 2012
The scheme commenced on:
1 July 2010
Relevant facts and circumstances
You are an Australian resident for taxation purposes.
You are a resident of Country A for taxation purposes.
You work for an Australian resident company in Country A.
You have been seconded for a period of time to work in Country A.
Your secondment may be extended.
You do not intend to live in Country A permanently.
You intend to return to Australia when your secondment is completed.
You have a permanent home in Australia which is not being rented out while you are in Country A.
Your employer has provided you with an apartment which is partially furnished and a car for the duration of your secondment.
Relevant legislative provisions
International Tax Agreements Act 1953
Reasons for decision
Residency pursuant to the Country A Agreement
The Country A Agreement deals with the issue of residency.
(1) for the purposes of this Agreement, a person is a resident of one of the Contracting States:
(a) In the case of Australia, if the person is a resident of Australia for the purposes of Australian tax; and
(b) In the case of Country A , if the person is a resident of Country A for the purposes of the law of Country A relating to Country A taxes.
(2) A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from sources in that State.
(3) Where by reason of the preceding provisions of this Article an individual is a resident of both Contracting States, then the status of the person shall be determined in accordance with the following rules:
(a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person;
(b) if a permanent home is available to the person in both Contracting States, or if in neither of them, the person shall be deemed to be a resident solely of the Contracting State with which the person's economic and personal relations are the closer.
For the purposes of the preceding subparagraphs, an individual's citizenship or nationality of one of the Contracting States shall be a factor in determining the degree of the individual's personal and economic relations with that Contracting State.
(4) Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident solely of the Contracting State in which its place of effective management is situated.
You are resident of both Australia and Country A for taxation purposes so sub-paragraph x is used to determine which country you we be a resident of for the purposes of the Double Tax Agreement - you will still be a resident of both countries for the purpose of the application of domestic taxation law.
The Commissioner considers that you are an Australian resident for the purposes of the Double Tax Agreement under sub paragraph x(x) (a). As you have a permanent home available to you in Australia and not Country A. Your Country A accommodation is provided by your employer and only for the term of your secondment.
Note that if your Country A accommodation was also a permanent home then your personal and economic relations are closer with Australia so you would still be a resident of Australia for the purposes of the Double Tax Agreement under sub paragraph x(x) (b).
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