Edited version of private advice

Authorisation Number: 1052416561925

Date of advice: 2 July 2025

Ruling

Subject: Residency

Question

Were you a resident of Australia for taxation purposes from to 1 July 20YY to 30 June 20YY?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 20YY

Year ended 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

You were born in Country A.

You are a citizen of Country A.

You entered Australia on a temporary visa in MM 20YY.

You were accompanied by your spouse who was employed in Australia on a Temporary Skills Shortage visa.

You stayed with friends in Australia. You did not lease a property in Australia.

You secured full-time, ongoing employment with an Australian company.

After three months, in MM 20YY, at the direction of your spouse's employer, you and your spouse returned to Country A.

You state your residency status as XX on your incoming and outgoing passenger cards.

You continue to work remotely for your Australian employer.

You are paid into your Australian bank account and receive superannuation guarantee contributions from your employer.

You do not derive any foreign sourced income.

You hold a driver's licence in Country A.

You receive mail at your friends' address in Australia.

You have personal items stored with your friends in Australia.

You do not own any property in Australia.

You do not own any property in Country A.

Your spouse has employment in Country A.

Your spouse has recently had a child, which you advise that due to practical family constraints has delayed your return to Australia.

You and your spouse have submitted applications for permanent residency in Australia as you and your spouse intend to return to Australia on a permanent basis.

You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976?

You are not a member of the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990?

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

Overview of the law

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', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are:

• the resides test (also referred to as the ordinary concepts test)
• the domicile test
• the 183-day test, and
• the Commonwealth superannuation fund test.

The resides test is the primary test for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'.

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, 183-day test and Commonwealth superannuation fund test).

Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

We have considered the statutory tests listed above in relation to your situation as follows:

The resides test

The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test:

• 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.

It is important to note that no one single factor is decisive, and the weight given to each factor depends on each individual's circumstances.

Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia.

Application to your situation

You are not a resident of Australia under the resides test for the period 1 MM 20YY to 30 MM 20YY based on the following:

• You arrived in Australia in MM 20YY and left 3 months later.
• You have advised that you do not know when you will be able to return to Australia on a permanent basis.
• You state you are an Indian resident and provide your Indian address on incoming and outgoing passenger cards.
• You stayed with friends when you were in Australia and did not establish your own accommodation.

You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test 183-day test and Commonwealth superannuation fund test).

Domicile test

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

Domicile

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

Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts.

Application to your situation

In your case, you were born in Country A and your domicile of origin is Country A. You are a citizen of Country A.

It is considered that you did not abandon your domicile of origin in 20YY and acquire a domicile of choice in Australia. You hold no residential property in Australia. You are residing long-term in Country A, and you have a right to reside in Country A indefinitely. You do not have a right to reside in Australia indefinitely.

Therefore, you are not a resident of Australia under the domicile test.

183-day test

Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both:

• the person's usual place of abode is outside Australia, and
• the person does not intend to take up residence in Australia.

Application to your situation

You were not present in Australia for 183 days or more in the 20YY and 20YY income years. Therefore, you are not a resident under this test for these income years.

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.

You are not a member on behalf of whom contributions are being made to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) 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

As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the 20YY and 20YY income years.

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