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This edited version has been archived due to the length of time since original publication.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.

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Edited version of your private ruling

Authorisation Number: 1012551791636

Ruling

Subject: Residency

Question and answer:

Are you a resident of Australia for taxation purposes?

No.

This ruling applies for the following period:

Year ended 30 June 2013.

The scheme commenced on: 1 July 2012.

Relevant facts:

You were born overseas.

You recently completed a degree overseas.

You entered Australia on a temporary Visa.

This visa allows you to stay in Australia for 12 months. You cannot be employed by any 1 employer for more than 6 months without permission, nor can you engage in study or training for more than 4 months.

You have been engaged in Australia as a volunteer for an X month project.

You were mostly an unpaid volunteer.

The program is being funded by government grants.

There were difficulties finding Australian volunteers and hence you were engaged and have made a valuable contribution.

Your duties required:

You have been living in basic accommodation provided by your employer.

You were not performing your role as part of any studies.

You will be staying for 4 to 5 months for your engagement as a volunteer, i.e. you will not be holidaying whilst here.

Assumptions:

N/A

Relevant legislative provisions:

Income Tax Assessment Act 1936 Subsection 6(1).

Income tax Assessment Act 1997 Section 6-5.

Income Tax Assessment Act 1997 Subsection 995-1(1).

Reasons for decision

Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source. 

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 resides test

· the domicile test

· the 183 day test

· the superannuation test.

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.

However, where an individual does not reside in Australia according to ordinary concepts, they may still be a resident of Australia for tax purposes if they meet the conditions of one of the other three tests.

 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'.

Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, an individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.

The following factors are useful in determining whether your behaviour over the time spent in Australia reflects a degree of continuity, routine or habit that is consistent with residing here:

You came to Australia to work as a volunteer assistant for X months.

You were provided basic accommodation near to your work.

You intend to leave at the end of your engagement and return overseas.

You were here on a temporary working/holiday visa.

You were not residing in Australia according to ordinary concepts for the period you are in Australia as you were not living in Australia on a permanent basis. You intended to return to overseas at the end of your engagement. You were here for the purpose of your engagement as a volunteer on a temporary visa. You are not a resident under this test. 

The domicile test

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

Your domicile of origin is overseas. You had no intention of making Australia your permanent home and changing your domicile. Therefore your domicile is not Australia and you are not a resident under this test.

The 183-day test

Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.

 

You were not in Australia for more than 183 days and in any event the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia. You are not a resident under this test.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee.

This test does not apply to you. You are not a resident under this test.

Your residency status

All of the factors relating to your presence in Australia suggest that the quality and character of your stay reflect that of a visitor who is temporarily in Australia rather than establishing behaviour consistent with residing here.

You were not a resident of Australia for taxation purposes for the period you were in Australia, engaged as a volunteer. As a non-resident of Australia any income derived in Australia is taxed at the non-resident rates.

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