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This edited version has been archived due to the length of time since original publication.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: 1051263859828

Date of advice: 3 August 2017

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes for the 2016 income year?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 2016

The scheme commenced on:

1 July 2015

Relevant facts and circumstances

You were born in Australia.

You are a citizen of Australia.

In the 2016 income year you worked outside Australia for your Australian employer in Country Z.

You had a business visa to enter Country Z which did not allow you to remain permanently in Country Z.

The visa was for 90 days and renewed when required for the XXX days you were working in Country Z in the 2016 income year.

You lived in employer provided accommodation in Country Z which was for your sole use.

Your Australian employer has withheld tax from your income in the 2016 income year.

You have lodged as a resident of Australia for taxation purposes in previous income years.

You spent XX days in Country Y in the 2016 income year.

You enter Country Y on a 30 day tourist visa.

Your spouse lives in Country Y.

Your spouse has a house in Country Y.

You are not allowed to own property in Country Y.

You have personal items and a shared bank account in Country Y.

You spent XX days in Australia in the 2016 income year on holiday.

You have a bank account in Australia for your salary to be deposited into.

You sold your main residence in Australia in 2014.

You have been working in Australia in City A and City B since XX XXXX 2016.

You will leave Australia and go to Country Y with your spouse in the 2018 income year.

On your outgoing and incoming passenger cards you put work/holiday.

You and your spouse are not eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.

Relevant legislative provisions:

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

Income Tax Assessment Act 1936 Subsection 6(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.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:

The primary test for deciding the residency status of each individual is whether they reside in Australia according to the ordinary meaning of the word resides. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.

The resides (ordinary concepts) test

The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word 'resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test.

Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides’ test:

These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in IT 2650 and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.

It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.

In the 2016 income year you worked in Country Z for your Australian employer for XXX days. You spent time with your spouse in Country Y for XX days and XX days on holiday in Australia.

You lived in employer provided accommodation in Country Z.

Based on the facts above you were not residing in Australia according to ordinary concepts in the 2016 income year.

The domicile test

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

A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. In order to show that an individual's domicile of choice has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.

Your domicile is Australia.

The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.

A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.

The Commissioner is not satisfied that you set up a permanent place of abode outside Australia for the following reasons:

You are 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 in the 2016 income year.

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.

You and your spouse are not eligible to contribute to the relevant Commonwealth super fund.

You are not a resident under this test.

Your residency status

You were a resident of Australia for taxation purposes in the 2016 income year under the domicile permanent place of abode test.

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