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Edited version of private advice

Authorisation Number: 1051820879768

Date of advice: 31 March 2021

Ruling

Subject: Residency

Question

Are you a resident of Australia from departure for the purposes of the tie break test in theAgreement between the Government of the Commonwealth of Australia and the Country A?

Answer

No

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You are a citizen of Australian and the Country B who departed Australia in late 20XX to live and work in Country A. You intend to live and work there for up to 2 years.

You are employed in Country A by Company D, which is subsidiary of Company E Australia.

Your spouse and children are all Australian citizens who moved to live with you.

Your spouse is employed as a XXXX and is currently investigating to determine whether it is possible to work in Country A while in that country on a dependant visa.

You have retained your Australian bank accounts, an Australia residential property and an Australian superannuation account.

You have not advised your Australian bank that you now reside overseas.

You have retained your Medicare card and membership.

You have not de-registered from the Australian electoral roll.

You have moved your personal possessions into a storage unit and will rent your Australian residential property on an arm's length basis while you reside in Country A.

Neither you nor your spouse has ever been employed by the Australian Commonwealth government and neither belongs to any Commonwealth superannuation scheme such as CSS or PSS.

You accept that during your time living and working in Country A, you will remain an Australian resident for taxation purposes.

Relevant legislative provisions:

Agreement between the Commonwealth of Australia and Country A (the Country A Convention)

Reasons for decision

Residency status

You accept that you are a resident of Australia for income tax purposes in the 20XX financial year.

The Country A Convention

The convention provides that if you have a permanent home available to in Country A and not in Australia you will be a resident of Country A for the purpose of the convention;

Tie-Break Test under the Convention

Under the Convention you have a permanent home in both Australian and Country A.

However, the Australian home is rented on an arm's length basis for the time you are in Country A.

ATO ID 2012/93 Dual resident of Australia and Malaysia: permanent home available deals with this issue and concludes that a permanent home is not available if it is rented during the period of absence from Australia.

Based on this, you do not have a permanent home available to you in Australia but do have such a home in Country A

Accordingly, under the tie-break test of the Convention you would be a tax resident of Country A for the purpose of the convention.

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