Disclaimer
This edited version has been archived due to the length of time since original publication.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: 1051286935485

Date of advice: 28 September 2017

Ruling

Subject: Residency

Question

Are you a resident of Australia for income tax purposes?

Answer

No

This ruling applies for the following periods:

Year ended 30 June 201X

Year ending 30 June 201Y

Year ending 30 June 201Z

The scheme commences on:

April 201X

Relevant facts and circumstances

You are a citizen of Australia and country Y.

You were born in Australia.

You went to country Y to live and work in the 201X income year.

Your contract is for 2 years and you can extend the contract.

You intend on being in Country Y for at least 2 years.

You rent accommodation in Country Y.

You have taken all your personal belongings to Country Y with you.

You have a bank account in Australia.

You own a 50% share in a rental property in Australia.

You have not returned to Australia since leaving.

You do not intend on returning to Australia in the first 12 months of your move to Country Y.

You do not have any dependants.

You do not have a spouse.

You are not eligible to contribute to the PSS or the CSS Commonwealth super 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 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 subsection 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936 for the period you are working in country Y. You are not required to declare the income you derive in country Y in your Australian tax return.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).