Edited version of private advice

Authorisation Number: 1051708502937

Date of advice: 11 September 2020

Ruling

Subject: Residency

Questions and answers

Questions and answers

1. Are you a resident of Australia for taxation purposes?

Yes - under the ordinary resides and domicile tests and, for the 2019 income year, under the 183 day test.

2. Are you a resident of Australia for the purposes of the Australia-Foreign Country B Double Tax Agreement?

Yes - your residency tie-breaks to Australia.

This ruling applies for the following period:

Year ended 30 June 2019

Year ended 30 June 2020

Year ended 30 June 2021

Year ended 30 June 2022

The scheme commenced on:

1 July 2018

Relevant facts and circumstances

Family and accommodation

You, your spouse and children were all born in Foreign Country A.

You arrived in Australia from Foreign Country Aseveral years ago on an employment related visa sponsored by your previous employer.

You began your relationship with your spouse several years ago. You are currently engaged and have children together. Your children attend school in Australia.

You became a citizen of Australia several years ago. You, your spouse and children are now dual citizens of Australia and of Foreign Country A.

You left Australia for Foreign Country B to undertake an employment assignment with your new Foreign Country B employer - the Foreign company.

You initially arrived in Foreign Country B on a visa which allowed foreigners to stay in Foreign Country B for up to one year. You were subsequently given the right to remain in Foreign Country B without the need for a visa.

You plan to return permanently to Australia within the period of the ruling.

Your family has not accompanied you to Foreign Country B. The primary reason for this is your spouse's work commitments and the children's schooling.

A relative resides in Foreign Country A and will visit you in Foreign country B.

Prior to your departure from Australia, you lived a property you have owned for several years. Your family currently resides at the property and it remains available for your immediate use and enjoyment whenever you return to Australia.

You relocated some of your personal belongings to Foreign Country B.

You currently reside in a leased property in Foreign Country B. The lease agreement is between the landlord and the Foreign company who pay the rent. You maintain exclusive use over the premises. The property is a two-bedroom residence that can accommodate your immediate family.

The lease agreement between the landlord and the Foreign company is an annual contract. This is set to be renewed for another year. However, the Foreign company has agreed with the landlord to rent the property for the period of your employment.There are tax concessions in Foreign country B if the employer rents the property, which is why the property is rented by the Foreign company.

You have fully furnished his residence in Foreign Country B.

You have arranged for all your correspondence to be directed to your residence in Foreign Country B. Correspondence relating to your spouse and Australian life (i.e. Australian residence) continues to be directed to your Australian address.

Employment

You ceased employment with your former Australian employer.

You commenced employment with an Australian company which is related to the Foreign company and were specifically engaged for the purpose of the Foreign Country B assignment with the Foreign company. You were employed temporarily by the Australian company as your commencement date in Foreign Country B was subject to change and it was the practice of the business to hire individuals due to the skills shortage in the industry.

Upon relocating to Foreign Country B, your employment contract with the Australian company was suspended.

Your current employment contract is with the Foreign company, a company headquartered and residing in Foreign Country B. It is the parent company of the Australian company. You are employed on the terms and conditions of employment that also apply to Foreign Country B nationals working in Foreign Country B for the Foreign country. Your contract may be extended. Your assignment in Foreign Country B officially commenced in 2019.

Your role with the Foreign company has required you to move to Foreign Country B in order to up-skill.

You are a tax resident of Foreign Country B for domestic tax purposes and are personally responsible for taxes and social security contributions on your employment income. As required, the Foreign company will provide tax support for you on your assignment.

Personal and economic ties

You hold an Australian bank account at the Bank which accumulates interest income.

You established a mobile phone number in Foreign Country B.

You hold an Australian superannuation account. This account is currently in the accumulation phase. The Australian company continues to make superannuation contributions to it. It is the policy of the Australian company and the Foreign company to continue retirement contributions in an assignee's home country. You do not have the choice to cease these contributions.

You own motor vehicles in Australia. Your spouse is currently maintaining the vehicles for the family's personal use in Australia.

You continue to hold private health insurance in Australia to cover your family. You do not benefit from this policy while overseas. You are entitled benefits under the Foreign Country B's social security system to which you contribute.

You were initially covered under the Foreign company's health insurance policy for a temporary period before you transitioned to the Foreign Country B's social security system. The purpose of the cover was solely to meet the time gap with the delay in your being covered under Foreign Country B's social security system.

You hold a medical card of Foreign Country B.

You hold a Foreign Country B bank account which pays interest throughout the year. You have nominated to have your employment income paid into this account. You have been sending money back to Australia with the primary purpose of funding the outstanding mortgage on your family residence. You have a bank card associated with this account.

You lease a car in Foreign Country B for a fixed term. You have a Foreign Country B driver's licence.

You have established an active and social life in Foreign country B. This includes:

• socialising with friends at bars, functions, restaurants and cinemas;
• regularly hiking along the Foreign Country B's coastline;
• cycling on evenings and weekends with a bicycle purchased;
• running in the evenings; and
• drives to many regional areas of Foreign Country B for recreational purposes.

You are a member of Foreign Country B's social club and regularly attends work events.

In Foreign Country B, have held a membership of the local sports centre. You regularly attend the centre.

You regularly attend local and sporting events in other countries.

You remain on the Australian Electoral Role.

You participated in the Foreign Country B national census.

Neither you, nor your partner, are contributing members of the Public Sector Superannuation Scheme or the Commonwealth Superannuation Scheme.

Travel during the Foreign country B assignment

You have returned to Australia on several occasions to spend time on holiday with your immediate family.

Your family visits you in Foreign Country B and they plan to continue to visit you in Foreign Country B on a frequent and regular basis over your employment with the Foreign employer. The family last visited you in Foreign Country B in late 2019. The family had booked to re-visit you mid-2020. However, due to COVID-19 this planned trip did not eventuate. This was a holiday plan and, just like many other people, this holiday was cancelled due to the uncertainty and travel limitations. Your family have plans for another trip in early 2021.

You last returned to Australia in early 2020 and returned to Foreign Country B several months later. As a result of COVID-19, you have experienced a temporary disruption to your living and working in Foreign Country B and in and your travel plans between Foreign Country B and Australia. The main impact for you has been an extended stay in Australia due to travel restrictions which has prevented you from returning to Foreign Country B as you had intended. You believe this should not by itself prevent you from being considered to have a permanent place of abode overseas, provided accommodation remains available to you in the foreign location. You will not be returning to Australia until Christmastime, if this is possible due to travel restrictions opening up.

Further travel to other locations is planned over the course of your employment in Foreign Country B, but this is yet to be determined by the family.

On your return to Australia you to continue work for the Foreign employer; working from home.

Your dwelling in Foreign Country B was available for your use while you were in Australia.

Your travel plans to and from Australia have been disrupted by the COVID-19 pandemic.

You had booked a trip to another foreign country. This is a social holiday to meet old friends from the Foreign country A. As with the family holiday travel plans mentioned above, this planned trip did not eventuate due to COVID-19.

You plan to return to Australia on two separate occasions per year for personal reasons over the course of the period you reside in Foreign Country B. The length of these visits will be for 1 to 2 weeks.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

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

Reasons for decision

Summary

You are an Australian resident for tax purposes under the ordinary concepts test.

You are also a resident under the domicile and permanent place of abode test due to your domicile of choice being Australia and due to the Commissioner not being satisfied that you have a permanent place of abode outside Australia.

You are not an Australian resident under the 183-day test for the 2020 and 2021 income years. You are a resident under the 183-day test for the 2019 income year.

You are not an Australian resident under the superannuation test.

You will also be considered a resident of Australia for the purposes of interpreting the Convention between the Government of Australia and Foreign country B for the Avoidance of Double Taxation with respect to taxes on income and the prevention of fiscal evasion (Foreign country B Agreement).

Detailed reasoning

Residency for taxation purposes

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 (and permanent place of abode) 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.

The resides test is the primary test for determining the residency status of an individual for taxation purposes. If residency is established under the resides test, the remaining three tests do not need to be considered. However, if residency is not established under the resides test, an individual will still be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests.

The resides test

The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. As the word 'reside' is not defined in Australian taxation law, it takes its ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936.

The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev. 3^rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'.

In considering the definition of 'reside', the High Court of Australia, in Federal Commissioner of Taxation v Miller (1946) 73 CLR 93 at page 99-100, per Latham CJ, noted the term 'reside' should be given a wide meaning for the purposes of section 6(1) of the ITAA 1936. Similarly, in Subrahmanyam v Commissioner of Taxation 2002 ATC 2303, Deputy President Forgie said at paragraphs 43 and 44 that the widest meaning should be attributed to the word 'reside'.

The question of whether an individual 'resides' in a particular country is a question of fact and degree and not of law. In deciding this question, the courts have consistently referred to and taken into account the following factors as being relevant:

(i)            physical presence in Australia;

(ii)           nationality;

(iii)          history of residence and movements;

(iv)          habits and 'mode of life';

(v)           frequency, regularity and duration of visits to Australia;

(vi)          purpose of visits to or absences from Australia;

(vii)        family and business ties with Australia compared to the foreign country concerned; and

(viii)       maintenance of a place of abode.

The weight given to each factor varies with individual circumstances and no single factor is necessarily decisive. In Shand v Federal Commissioner of Taxation 2003 ATC 2080, the Tribunal stated (at 35):

Questions of residence, domicile, permanent place of abode, have frequently been found by the courts and tribunals to be difficult to assess on a factual level and not easy to define in concrete legal terms.

To determine whether or not you are residing in Australia for taxation purposes, it is necessary for us to examine each of these factors in the context of your circumstances.

(i) Physical presence in Australia

It is important to note that a person does not necessarily cease to be a resident because he or she is physically absent from Australia. In Joachim v Federal Commissioner of Taxation 2002 ATC 2088, the Tribunal stated (at 2090):

Physical presence and intention will coincide for most of the time but few people are always at home. Once a person has established a home in a particular place, even involuntary, a person does not necessarily cease to be resident there because he or she is physically absent. The test is, whether the person has retained a continuity of association with the place, together with an intention to return to that place and an attitude that the place remains home.

Further, in Iyengar v. Federal Commissioner of Taxation 2011 ATC 10-222, (2011) AATA, the Tribunal stated (at 62):

Physical presence in a country for some period during a particular year of income is usually considered by the courts as necessary in order that a person should be resident in that country during that particular income year. However, there have been exceptions to this: Rogers v Inland Revenue Commissioners (1879) 1 TC 225 and Slater v Commissioner of Taxation (NZ) (1949) 9 ATD 1.

In your case, you have accepted a three-year work assignment in Foreign Country B on a contract which has no end date, however, you intend returning to Australia permanently in 2022. While in Foreign Country B you will visit your family on a regular basis subject the COVID-19 related travel restrictions.

(ii) Nationality

You were born in the Foreign Country A and retain Foreign Country A citizenship, but you are also an Australian citizen.

(iii) History of residence and movements

You lived and worked in Australia prior to leaving Australia for Foreign Country B in March 2019 to take up employment there. You returned to Australia in early 2019 to visit and spend time on holiday with your immediate family. You again returned to Australia to visit your family in early 2020, which was longer than intended as a result of COVID-19 travel restrictions. You have remained in Foreign Country B since then. Future trips to Australia are likely but will depend on the travel restrictions.

Your visits indicate your continuing desire to maintain your family links with Australia and are consistent with someone who is still residing in Australia.

(iv) Habits and 'mode of life'

You intend to live and work in Foreign Country B for the years of your three year assignment. You have established a residence there in accommodation rented for you by your Foreign country B employer. You will return to Australia to visit and be with your family subject to travel restrictions. You maintain your family home in Australia as well as motor vehicles, superannuation, private health insurance for your family and a bank account. You plan to return permanently to Australia in 2022 and take up residence with your family.

These actions are indicative of your continuing association with Australia and are consistent with someone who is still residing in Australia.

(v) Frequency, regularity and duration of visits to Australia

As mentioned above, you currently have plans to make return visits to Australia to be with your family but, due to COVID-19 travel restrictions, you cannot be precise about the date for these visits

(vi) Purpose of visits to and absence from Australia

The purpose of your absence from Australia is to work for your Foreign Country B employer on a three-year assignment after which you will return to Australia permanently.

(vii) Family, business and financial ties

Family

Your spouse and children live in Australia and you may return to Australia when travel restrictions permit.

It is evident that you have stronger family ties to Australia than with Foreign Country B.

Business or economic

As mentioned above, you have taken up an employment assignment Foreign Country B for a period of three years after which you will return permanently to Australia. You have gone to Foreign Country B for upskilling so that when you return to Australia it is expected that you will be employment by the Australian subsidiary of your Foreign country B employer.

It has always been your intention, in accepting the assignment in Foreign Country B for upskilling, to return to Australia and work for the Australian subsidiary of your foreign employer.

Assets

Your assets in Australia are your family home, motor vehicles, superannuation, private health insurance for your family and a bank account. In Foreign Country B, your assets are your personal and household affects you have purchased in Foreign Country B and items you took with you from Australia. You have also opened a bank account and a phone account in Foreign Country B.

It is evident that you have a higher value of assets in Australia than Foreign Country B which is consistent with someone who is still residing in Australia.

(viii) Maintenance of a place of abode in Australia

You are living in accommodation in Foreign Country B rented for you by your employer for as long as you are employed there. You have a place of abode in Australia in a house you own and where your family live.

Your circumstances are consistent with someone who is residing in Australia.

Summary of the resides test

As mentioned above, the weight given to each factor varies with individual circumstances, no single factor is necessarily decisive, and the term 'reside' should be given a wide meaning.

In your case, although you intend to be physically absent from Australia for three years, there are various factors that indicate that you have not ceased to be a resident of Australia. You moved to Foreign Country B to take up a three-year assignment for the purpose of upskilling. You intend returning to Australia permanently in 2022 whereupon the Australian subsidiary of your foreign employer expect you to work for them. It may be said that in doing so you have settled there for a considerable time. However, you have moved away from your family who remain in Australia and you retain your family connections here by regularly coming back to Australia to be with them in your family home. Further, you maintain significant assets in Australia such as your family home, motor vehicles, superannuation, private health insurance for your family and a bank account. Based on the facts of your case, the Commissioner does not accept that you ceased residing in Australia according to the ordinary meaning of the word 'reside' upon your departure from Australia

Based on the above, you will retain a continuity of association with Australia while you are overseas and will be residing in Australia according to the ordinary meaning of the word.

Therefore, you are a resident of Australia under the 'resides' test of residency.

The domicile and permanent place of abode test

Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia.

1.0 Domicile of Choice

A person's domicile is generally their country of birth. This is known as a person's 'domicile of origin'. A person may acquire a domicile of choice in another country if they have the intention of making their home indefinitely in that country. The intention needs to be demonstrated in a legal sense, for example, by way of obtaining a migration visa, becoming a permanent resident or becoming a citizen of the country concerned.

Your domicile of origin is the country where you were born, not where a parent was born. You established your intention to adopt a domicile of choice when you applied for Australian citizenship and by completing the process when you became an Australian citizen.

You have adopted Australia as your domicile of choice but have not taken steps to make another country your domicile of choice. As you are a citizen of Australia and will remain so while living and working in Foreign Country B and you have not taken steps to make another country your domicile of choice, your domicile is in Australia and remains unchanged.

2.0 Permanent place of abode

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 you intend to live for the rest your life. An intention to return to Australia in the foreseeable future to live does not prevent you in the meantime setting up a permanent place of abode elsewhere.

It is clear from the case law that a person's permanent place of abode cannot be ascertained by the application of any hard and fast rules. It is a question of fact to be determined in the light of all the circumstances of each case.

You have cited IT 2650 and related court cases to support your claim that you abandoned Australia as a place to live and work in and having established a permanent place of abode in Foreign country B. We need to consider all these factors not just "where one lives with one's family and sleeps at night": Paragraph 5 of IT 2650, Summary of Ruling, says the following factors need to be taken into account:

(a)  the intended and actual length of the individual's stay in the overseas country;

Your intention is to remain in Foreign Country B for the duration of your employment contract then return to Australia.

(b)  any intention either to return to Australia at some definite point in time or to travel to another country;

You plan to return permanently to Australia in 2022.

(c)   the establishment a home outside Australia;

You will retain your family home in Australia where your partner and children continue to live in a house you own. In Foreign Country B, you live in a dwelling leased by your employer on an agreement between them and the landlord. Your employer pays the rent and has agreed with the landlord to lease the dwelling for the three years of your time in Foreign Country B.

(d)  the abandonment of any residence or place of abode the individual may have had in Australia;

The test that came out of Harding requires that, in determining if a person's permanent place of abode is outside Australia, the Commissioner should consider whether the person has definitely abandoned their residence in Australia. You have not definitely abandoned your residence in Australia. Your partner and children continue to live in a house you own and to which you return on your return visits to Australia.

(e)  the duration and continuity of the individual's presence in the overseas country; and

The duration and continuity of your presence in Foreign Country B is determined by the requirements of your employment contract.

(f)    the durability of association that the individual has with a particular place in Australia.

You maintain a family home in Australia where your family continues to live and where you return to live on your trips to Australia and to which you will return permanently when your work assignment in Foreign country B ends.

It is acknowledged that, as a result of COVID-19, you have spent more time in Australia that was intended due to travel restrictions and that this has prevented you from returning to Foreign Country B to live and work as you had intended. However, although your employer provided accommodation has remained available to you in Foreign Country B throughout this time, it is not considered that it was ever established as a permanent place of abode overseas and your extended stay in Australia has not altered that fact.

Taken together and on balance the factors set out in IT 2650 supports our claim that you remain a resident.

2.1 Employer providing accommodation

You have cited IT 2650 and related court cases in support of your claim to have established a place of abode in Foreign Country B.

With the Applegate case, the key differences are:

·         Mr Applegate was sent by his employer to work in Vila for an indefinite term; and,

·         He took his family with him.

With case S19 85 ATC 225, the key differences are:

·         The bank manager in this case let his Australian home so he had 'abandoned' it which meant he had no home to return to.

·         On leaving Australia, the taxpayer expected a further overseas posting after his 2-year period.

·         He advised the Department of Social Security that the family was leaving Australia permanently and child endowment payments should cease.

With the Engineering Manager case the key differences are:

·         Mr M was estranged from his spouse but made visits to her and to their children, all of who stayed living in Australia.

·         Mr M had a permanent place of abode in Oman, being a house rented for his exclusive use but no home in Australia.

·         Mr M had worked overseas for many years prior to the relevant tax years.

With the Harding case the key differences are:

·         Mr Harding made plans to relocate his wife and youngest son to Bahrain.

·         Mrs Harding and the children visited him, and they looked for appropriate accommodation and enrolled their youngest son in a school in Bahrain.

·         Mr Harding purchased a car for his wife to use when she joined him in Bahrain.

·         Mr Harding returned to Australia regularly each year to visit his family.

·         In the 2011 income year he spent 91 days in Australia, generally when working conditions permitted, and stayed in the family home.

·         Mrs Harding indicated her reluctance to return to the Middle East. Mr Harding was not prepared to alter his plans and the pursuit of his employment opportunities in the Middle East. Mr and Mrs Harding separated around October 2011 and ultimately divorced.

• Mr Harding made significantly more effort to move his spouse and child to live with him in Bahrain and divorced his spouse when she was reluctant to move live overseas with him.

Taken together and on balance, the factors set out above supports our claim that, while you have established a place to live while you live and work in Foreign Country B, you have not abandoned your family home in Australia and that you will return to it for visits and at the end of your overseas assignment.

2.2 Family remaining in Australia

You have cited the Dempsey and other court cases in support of your claim that having your spouse and children continue to reside in Australia does not in itself preclude your residence in Foreign Country B from being considered your permanent place of abode.

With the Dempsey case, the key differences are:

• Mr Dempsey had no family links in Australia except two grown children and an ex-partner.
• He was employed under a contract of indefinite duration.
• When he returned to Australia he moved back into the house he owned. He resided in that house before his overseas work and stayed there for a few days each year on his return visits to Australia.
• He had intended to sell the property but was unable to due to the GFC.
• He spent most of each relevant year in Saudi Arabia, and when on leave travelled to Bahrain, Thailand and Australia.
• His trips to Australia were brief and when holidaying, Mr Dempsey spent more time in Thailand.

With the Engineering Manager and Harding cases, see the treatment of these cases above under

2.1 Employer providing accommodation.

With IT 2650 paragraph 30 and the education of your children, as mentioned in 2.0 Permanent place of abode above, it is necessary to take several factors into consideration such that no one factor can be considered decisive. By itself, your children's education cannot not be considered decisive.

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.

In your case, you were in Australia for the following days:

Income year Days in Australia

Year ended 30 June 2019 More than 183 days

Year ended 30 June 2020 Less than 183 days

Year ended 30 June 2021 Less than 183 days

In your case you were not or will not be physically in Australia for more than 183 days in the 2020 and 2021 income years.

You were, however, in Australia for more than 183 days in the 2019 year as you only left for Foreign Country B during the first half of 2019 and had been living in Australia before that.

Therefore, you are a resident of Australia under this test unless the Commissioner is satisfied that your usual place of abode is outside Australia and you do not intend to take up residence in Australia.

Usual place of abode

In the context of the 183 day test, a person's usual place of abode can include both a dwelling or a country where the person usually resides. A person can have only one usual place of abode under the 183 day test. If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, it is necessary to examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode.

During the relevant income year, your usual place of abode was in Australia. You spent more time in Australia and your personal ties to Australia are stronger with your spouse and children here. You have also taken up residence in Australia prior to your trip to Foreign Country B.

Therefore the Commissioner is not satisfied that your usual place of abode is outside Australia.

Accordingly you will be a resident under this test for the 2019 income year. You will not be a resident under this test in the 2020 and 2021 income years.

The superannuation test

An individual is still considered to be a resident if that person is eligible to contribute to the Commonwealth Superannuation Scheme (CSS) or the Public Service Superannuation Scheme (PSS), or that person is the spouse or child under 16 of such a person.

In your case, you are not a member of the CSS or the PSS or a spouse of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test.

Conclusion

You are residing in Australian under ordinary concepts.

The Commissioner is satisfied your domicile of choice is Australia and you have not changed it to another country and have no intention of doing so. Therefore, you domicile is Australia and remains unchanged.

The Commissioner is not satisfied you established a 'permanent place of abode' outside of Australia and have no intention to do so. You have established a presence in Foreign country B but with a stated end date. Although you will not be physically present in Australia or intend to live in Australia you will visit your family who remain in the family home to which you will return to periodically. You return to it permanently after your three-year contract is completed. Your goal for the foreseeable future is to pursue your career but with definite intention to return to Australia on a date stated. Upon your return, it is possible you will return to work for the Foreign country B company's Australian subsidiary on a currently suspended contract.

On the balance of the facts and circumstances of your situation you will satisfy two of the tests of residency outlined in subsection 6(1) of the ITAA 1936 for the period of the ruling. You would also satisfy the 183 day test during the 2019 year.

Accordingly, you will remain a resident of Australia for income tax purposes from the day after you departed Australia on 24 March 2019 and for the duration of your time in Foreign Country B.

Assessable income

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of an Australian resident taxpayer includes the ordinary income derived by the taxpayer directly or indirectly from all sources, whether in or out of Australia, during the income year.

Employment income is ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.

Subsection 6-5(2) of the ITAA 1997 provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year.

In your case, as you are a resident of Australia for taxation purposes, your assessable income includes ordinary income derived directly or indirectly from all sources, whether in or out of Australia, during the income year. This includes the income you derive from your employment in Foreign Country B.

Residency and the Australia- Foreign Country B Double Tax Agreement

In determining liability to Australian tax on foreign sourced income it is necessary to consider not only the income tax laws, but also any applicable double tax agreement contained in the International Tax Agreements Act 1953 (Agreements Act).

Section 4 of the Agreements Act incorporates that Act with the ITAA 1936 and the ITAA 1997 so that those Acts are read as one.

Schedule 5 to the Agreements Act contains the agreement between Australia and Foreign Country B (Foreign Country B Agreement).

Where a taxpayer has homes in two countries, it is necessary to consider the tie breaker rules in the Foreign Country B Agreement.

Article 4 - residence and the tiebreaker rules

Article 4 of the Foreign Country B Agreement sets out the tiebreaker rules for residency for individuals. The tiebreaker rules ensure that the individual is only treated as a resident of one country for the purposes of working out liability to tax on their income under the Foreign Country B Agreement. The tiebreaker rules do not change a taxpayer's residency status for domestic law purposes.

Analysing the relevant tiebreak test, you will be considered to be a resident of Australia for the purposes of interpreting the Foreign Country B Agreement.

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