Edited version of private advice

Authorisation Number: 1052410011442

Date of advice: 11 July 2025

Ruling

Subject: Residency and employment income

Question

Is the employment income received from your Australia employer assessable in Australia?

Answer

No.

Based on the information you have provided to the Commissioner, the income derived from your Australian employer, while living in Country A, is not subject to tax in Australia.

Article 15 of the Double Tax Agreement between Australia and Country A provides Country A with the sole taxing rights to your employment income.

Income derived by an individual who is a resident of Country A in respect of an employment is taxable only in Country A, unless the employment is exercised in Australia.

This ruling applies for the following periods:

Year ending XX XX 20XX

Year ending XX XX 20XX

Year ending XX XX 20XX

Year ending XX XX 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

You are a citizen of Australia.

You are not a resident of Australia for taxation purposes.

You are a resident of Country A for taxation purposes.

You were granted a Country A permanent visa on XX XX 20XX.

On XX XX 20XX you commenced employment with Company A.

You are employed as Position A.

Your duties include duty A and duty B using databases and publicly available information online.

You carry out your employment duties in Country A.

You and your wife have purchased property in Country A.

The property address is Property A.

You have no other assets in Australia or Country A.

You are completing Position B for an Australian client in addition to Position A.

You have no planned trips to visit Australia in the foreseeable future and will not be in Australia for more than XXX days in the ruling period.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 6-5

Income Tax Assessment Act 1997 section 6-20

Income Tax Assessment Act 1997 section 995-1

International Tax Agreements Act 1953 section 4

International Tax Agreements Act 1953 section 5

Reasons for decision

For tax purposes, you are a resident of Australia if you meet at least one of the following tests. You are not a resident of Australia if you do not meet any of the tests:

•         The resides test (otherwise known as the ordinary concepts test).

•         The domicile test.

•         The 183-day test.

•         The Commonwealth superannuation fund test.

We have considered your circumstances, and conclude that you are not a resident of Australia for the 20XX, 20XX, 20XX and 20XX income years, as follows:

•         You are not a resident of Australia according to the resides test.

•         You do not meet the domicile test because your domicile is not in Australia. Your domicile of choice is Country A.

•         You do not meet the 183-day test because you will not be in Australia for 183 days or more during the 20XX, 20XX, 20XX, and 20XX income years.

•         You do not fulfill the requirements of the Commonwealth Superannuation test.

However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.

The source of a taxpayer's income (derivation) is the place where the services are performed: French v. FC of T (1957) 98 CLR 398.

As the income is sourced (derived) in Country A, along with the fact that you are a non-resident of Australia for taxation purposes, the income earned from your employment with Company A whilst living in Country A is not assessable under section 6-5 of the Income Tax Assessment Act 1997.

Furthermore, Article 15 of the Double Tax Agreement between Australia and Country A provides Country A with the sole taxing rights to your employment income.

Income derived by an individual who is a resident of Country A in respect of an employment is taxable only in Country A, unless the employment is exercised in Australia.

More information

For more information about residency, see Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

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