Edited version of private advice

Authorisation Number: 1052095223202

Date of advice: 4 April 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for taxation purposes?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Country Z.

You are a citizen of Country Z.

You are a permanent resident of Australia.

You work for Employer Z.

You applied for and obtained a position with an organisation in a previous financial year.

Your contract is for several years.

As part of your position, you have to travel to Country Z.

You are paid by Employer Z while you are in Country Z.

You intend on being in Australia for X months and in Country Z for X months each year for the duration of the contract.

You are supplied with accommodation in Country Z by your employer which is for your use and is available to you at all times.

Your spouse will accompany you to Country Z.

You do not have any assets in Country Z.

You have an apartment in Australia.

You rent this apartment out when you are not in Australia. You will return to the apartment when you are in Australia.

The apartment is currently rented for several months.

You do not intend on being in Country Z permanently.

You and your spouse are not eligible to contribute to the PSS or the CSS commonwealth Superannuation funds.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 6(1)

Reasons for decision

For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

The definition has four tests to determine your residency for income tax purposes. These tests are:

•                     the resides test

•                     the domicile test

•                     the 183 day test, and

•                     the Commonwealth superannuation fund test.

It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes.

Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2022/D2 Income tax: residency tests for individuals.

The resides test

The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides,

Some of the factors that can be used to determine whether you reside in Australia include:

•                     period of physical presence in Australia

•                     intention or purpose of presence

•                     behaviour while in Australia

•                     family and business/employment ties

•                     maintenance and location of assets

•                     social and living arrangements.

No single factor is decisive, and the weight given to each factor depends on your specific circumstances.

Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests.

The domicile test

Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia.

Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile.

For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

Whether your permanent place of abode is outside Australia is a question of fact to be determined in light of all the facts and circumstances of each case.

Key considerations in determining whether you have your permanent place of abode outside Australia are:

•                     whether you have definitely abandoned, in a permanent way, living in Australia

•                     length of overseas stay

•                     nature of accommodation, and

•                     durability of association

The 183-day test

Under the 183 day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both:

•                     your usual place of abode is outside Australia, and

•                     you do not intend to take up residence in Australia.

The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when you are physically in a country.

The Commonwealth superannuation test

An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976, or they are the spouse, or the child under 16 of such a person.

Application to your circumstances

We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that, for the relevant income years you are a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are a resident of Australia according to ordinary concepts.

We also consider that your domicile is in Australia and the Commissioner is satisfied that your permanent place of abode is not outside Australia. We considered the following factors in forming our conclusion:

•                     You and your spouse will be in Australia for several months each year

•                     You will rent your property out in Australia while you are in Country Z and return to the property when you are back in Australia

•                     Your research position is for several years and you will spend X months of the year in Country Z on the project

•                     Your employer provides your accommodation in Country Z

•                     You do not intend on being in Australia for more than 183 days in the relevant income years.

•                     You do intend on residing in Australia and your usual place of abode is in Australia for the ruling period.

You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test.

You are a resident of Australia for taxation purposes.

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