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This edited version has been archived due to the length of time since original publication.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

Authorisation Number: 1012977657826

Date of advice: 1 March 2016

Ruling

Subject: Residency

Question:

Were you a resident of Australia for taxation purposes in the financial year ended 30 June 20ZZ?

Answer:

No

This ruling applies for the following periods:

Year ended 30 June 20ZZ

The scheme commences on:

July 20YY

Relevant facts and circumstances

You were born in Country A.

You are a citizen of Country A.

You were granted Australian permanent residency in 20XX.

You lived and worked in a foreign country until April 20YY.

You lived in Country A from April 20YY to August 20YY.

You arrived in Australia in mid-August 20YY.

You were looking for a job in Australia from August 20YY to October 20YY; however, you were not able to get a job so you returned to Country A.

You got a job in Australia for a short period of time in November.

You stayed with your friends in Australia for the period from August 20YY to October 20YY and a short period of time in November.

You departed Australia to work in Country B.

Your employment in Country B was initially from November 20YY to April 20ZZ. However, it was extended until June 20ZZ.

You were holding a work permit to work and stay in Country B. You were staying in a furnished apartment provided by your employer and you took your personal belongings to Country B.

Your family arrived in Australia in December 20YY.

You returned to Australia in January 20ZZ for one week to help your family to settle down. You rented a house for your family and the rental agreement was for one year.

You maintain an Australian bank account and you purchased a car in Australia for your spouse.

Your intention was to reside in Australia permanently if you could get a permanent job in Australia.

You secured a permanent job in Australia in July 20ZZ.

You moved back to Australia in July 20ZZ to join your family permanently.

You and your spouse are not a Commonwealth government of Australia employee for superannuation purpose.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

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

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

Reasons for decision

Section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for taxation purposes as a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936).

The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. The tests are:

The first two tests are examined in detail in Taxation Ruling IT 2650 - Income tax: residency - permanent place of abode outside Australia. The latter two tests are relatively self-explanatory as they require the individual to either be physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes.

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

Based on the facts you will not satisfy any of the tests of residency.

Accordingly you were not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.

Section 6-5 of the 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. 

In your case, any income you earned from Australian sources will be assessable in Australia.

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