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This edited version has been archived due to the length of time since original publication.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

Authorisation Number: 1051548163392

Date of advice: 8 August 2019

Ruling

Subject: Residency

Question

Are you a resident of Australia while you work overseas?

Answer

No

This ruling applies for the following periods:

Year ending 30 June 2019

Year ending 30 June 2020

Year ending 30 June 2021

The scheme commences on:

1 July 2018

Relevant facts and circumstances

You left for Country A in early 2018.

You have an X year employment contract.

You have secured and furnished a residence.

You spend about 40 weeks a year in Country A.

You spend the remainder of the year out of Country A travelling to different worksites.

You have no Australian income sources and do not intend on returning to Australia.

You do own a house in Australia with your estranged spouse and you contribute towards the mortgage and utilities.

You have no intention of reconciling the relationship.

You have cancelled your private health cover.

You intend to stay overseas with your employer if an adequate salary package is offered.

You have created a social network of friends and colleagues in Country A and have joined a local climbing gym.

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:

·         the resides test,

·         the domicile test,

·         the 183 day test, and

·         the superannuation test.

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, you do not satisfy the tests for residency.

Accordingly you are a non-resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.

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