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This edited version has been archived due to the length of time since original publication.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

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1051279218384

Date of advice: 3 October 2017

Ruling

Subject: Residency

Question 1

Are you a resident of Australia for income tax purposes?

Answer:

No

Question 2

Is your income derived in the country Y assessable in Australia?

Answer:

No.

This ruling applies for the following period:

Year ended 30 June 2017

Year ending 30 June 2018

Year ending 30 June 2019

Year ending 30 June 2020

The scheme commenced on:

X November 2016

Relevant facts and circumstances:

You were born in Australia.

You are a citizen of Australia.

You went to country Y to work on in the 2017 income year.

Your work contract in Country Y is for 3 years at which point you will return to Australia.

You rent accommodation in Country Y which is for your sole use.

You intend on returning to Australia for a short visit at Christmas.

You do not have any dependants.

You do not have any Australian sourced income.

You have a HECS debt.

You 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.

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax 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:

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

Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency.

Accordingly you are 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 for the period you are working in Country Y. Your Country Y income is not assessable in Australia.

Please note:

Changes have been made to the student loan repayment requirements.

Please go to our web site at www.ato.gov.au and type in QC 47358.

This sets out your obligations to repay your debt as a non-resident of Australia for tax purposes.

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