Quy v FC of T

Members:
D Mitchell M

Tribunal:
Administrative Appeals Tribunal, Brisbane

MEDIA NEUTRAL CITATION: [2024] AATA 245

Decision date: 26 February 2024

D Mitchell (Member)

INTRODUCTION

1. Mr Trong Quy (the Applicant) is seeking review of objection decisions[1] Exhibit 1, T Documents, T2, page 7, Notice of Objection Decision. made by the Commissioner of Taxation (the Respondent) dated 6 January 2022.[2] Exhibit 1, T Documents, T1, pages 1-6, Application for Review.

2. The reviewable objection decisions relate to the Applicant's objections to notices of assessments for the income years ended 30 June 2016 to 30 June 2020. The reviewable objection decisions:[3] Exhibit 1, T Documents, T2, pages 7-16, Notice of Objection Decision and Reasons for Decision.

THE LAW

3. The relevant law in this matter includes the Income Tax Assessment Act 1936 (Cth) (ITAA 1936), the Income Tax Assessment Act 1997 (Cth) (ITAA 1997) and the Taxation Administration Act 1953 (Cth) (TAA 1953).

4. Where a taxpayer is dissatisfied with an assessment, they may object against it in accordance with the requirements set out in Part IVC of the TAA 1953.

5. The Respondent must decide whether to allow, wholly or in part, or disallow, the taxpayer's objection.[4] Section 14ZY of the TAA 1953.

6. A taxpayer dissatisfied with the Respondent's objection decision may apply to the Tribunal for a review of the decision or appeal to the Federal Court against it.[5] Section 14ZZ of the TAA 1953.

7. Section 14ZZK(b)(i) of the TAA 1953 provides that on application for review of a reviewable objection decision, the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been.

8. A person's assessable income is established by the operation of sections 6-5 and 6-10 of the ITAA 1997. Effectively, during an income year, an Australian resident is generally assessed on ordinary and statutory income derived from all sources, whether being derived in or outside of Australia.[6] Sections 6-5(2) and 6-10(4) of the ITAA 1997. A foreign resident on the otherhand is generally assessed only on ordinary and statutory income derived from Australian sources.[7] Sections 6-5(3) and 6-10(5) of the ITAA 1997.

9. Section 995-1 of the ITAA 1997 defines Australian resident to mean a person who is a resident of Australia for the purposes of the ITAA 1936.

10. Section 6(1) of the ITAA 1936 defines resident or resident of Australia to mean:

11. It is not in contention that in this matter the Applicant was not present in Australia for more than one half of each income year in question and was not a member of a Commonwealth superannuation scheme and as such sections 6(1)(a)(ii) and 6(1)(a)(iii) of the ITAA 1936 do not apply.

12. The residency tests that arise as a result of the definition set out in section 6 of the ITAA 1936 have been considered in a number of Court and Tribunal decisions which provide principles to be taken into consideration in making such determinations.

The Ordinary Concepts Test

13. The Ordinary Concepts Test for the purposes of section 6(1)(a) of the ITAA 1936 considers whether the person resided in Australia.

14.

ATC 12621

In order to be taken to have resided in Australia, the Courts have held that regard must be had to "the nature, duration and quality of physical presence [of a person] in a particular place as well as [their] intention".[8] Stockton v Commissioner of Taxation [2019] FCA 1679 at [23] per Logan J; see also Harding v Commissioner of Taxation [2019] FCAFC 29 at [60] which referred to Hafza v Director-General of Social Security (1985) FCR 444 at 449-450 where Wilcox J considered that residence involved the question of a person’s physical presence in addition to a person’s intention to treat a particular place as their home.

15. A person can reside in more than one country at a time.[9] Gregory v Deputy Commissioner of Taxation (WA) (1937) 57 CLR 774 at 777 ; Inland Revenue Commissioners v Lysaght (1928) AC 234 at 245 .

16. The Respondent provided a useful summary of the well-known authorities on the ordinary meaning of the word "reside".[10] Respondent’s Closing Submissions, paragraphs 19-31. The Tribunal notes:

Domicile Test

17. The Domicile Test set out in section 6(1)(a)(i) of the ITAA 1936 has two parts, firstly whether the person is domiciled in Australia; and if so whether the Respondent (or Tribunal standing in his shoes), is satisfied that the person's permanent place of abode is outside Australia.

18. A person's domicile is determined by common law rules as modified by the Domicile Act 1982 (Cth). Every person has a domicile of origin that arises at birth. This domicile of origin cannot be lost or displaced and can only be replaced by a domicile of choice. Unless a new domicile is inferred by the law from the combination of actions and intentions as to residence, a person's pre-existing domicile survives.[22] Billington v Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 480 at [42] per Logan J.

19. Section 10 of the Domicile Act 1982 (Cth) deals with intention for domicile of choice and provides that:

The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his or her home indefinitely in that country.

20. In
Fremlin v Fremlin (1913) 16 CLR 212 at 223, Barton J referring to what Lord Westbury said in
Udny v Udny (1869) L.R. 1 H.L. (Sc.) 441 at 458 provided that a domicile of choice is:

… a conclusion or inference which the law derives from the fact of a man fixing voluntarily his sole or chief residence in a particular place, with an intention of continuing to reside there for an unlimited time. This is a description of the circumstances which create or constitute a domicile, and not a definition of the term. There must be a residence freely chosen, and not prescribed or dictated by any external necessity, such as the duties of office, the demands of creditors, or the relief from illness; and it must be residence fixed not for a limited period or particular purpose, but general and indefinite in its future contemplation.

21. The meaning of permanent place of abode in section 6 of the ITAA 1936 was considered in the case of
Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114. In that case, the issue was whether the taxpayer, a lawyer, whose domicile was Australia, had a permanent place of abode in the New Hebrides. Mr Applegate had given up his home in Sydney and had moved to the New Hebrides to set up a branch of his law firm. He intended to live there indefinitely, but not permanently, intending ultimately to return to Australia at some time in the future. Mr Applegate returned to Australia sooner than expected due to illness.[23] Summary as outlined in Arjunan and Commissioner of Taxation [2020] AATA 4024 at paragraph 20. Fisher J said at 128:

To my mind the proper construction to place upon the phrase "permanent place of abode" is that it is the taxpayer's fixed and habitual place of abode. It is his home, but not his permanent home. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his usual place of abode. Material factors for consideration will be the continuity or otherwise of the taxpayer's presence, the duration of his presence and the durability of his association with the particular place.

It follows then that in my opinion the intention of the taxpayer as far as returning to Australia is concerned is just one of the factors for consideration. But it is a factor which I consider has less significance than the taxpayer's intention in relation to his place of abode outside Australia.

ATC 12623

Intention to return to Australia is a crucial feature in considering whether the taxpayer has retained an Australian domicile. Intention to make his home for the time being in his place of abode outside Australia is an important element in characterizing that place of abode as his "permanent" place of abode.

22. "Permanent place of abode" for the purposes of the definition of resident or resident of Australia in section 6(1) of the ITAA 1936 is to be read as something less than a permanent place of abode in which the taxpayer intends to live forever or for the rest of their life.[24] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 117 per Franki J. Rather the term 'permanent' is contrasted with 'temporary' or 'transitory'.[25] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 123 per Northrop J.

23. In
Harding v Commissioner of Taxation [2019] FCAFC 29, Davies and Steward JJ at [36] after considering the history of the definition of resident or resident of Australia for the purpose of section 6(1)(a)(i) of the ITAA 1936 concluded that:

ISSUES

24. The issue before the Tribunal is whether the Applicant's notices of assessment for the income years ended 30 June 2016 to 30 June 2020 (the tax years in question) are excessive or otherwise incorrect. To decide this issue, the Tribunal must determine whether the Applicant was an Australian resident for taxation purposes during each of the tax years in question.

25. To determine whether the Applicant was an Australian resident for taxation purposes during the tax years in question, the Tribunal must consider whether according to the:

26. It is noted that it was not suggested that the Applicant has any outstanding tax payable for the tax years in question, rather he is seeking a refund of the pay as you go (PAYG) tax withheld from his income by his employer during this period. The total amount of PAYG withholdings in question amounts to $524,943.29.

FACTUAL BACKGROUND

27. The Applicant was born in Vietnam and obtained Australian citizenship in 1978.[26] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-14, paragraphs 2 and 4.

28. The Applicant is a mechanical engineer. In 1986, the Applicant commenced working with CBI Constructions Pty Ltd (C&BI) in Sydney. Since 1986, the Applicant has worked both in Australia and on a number of international assignments.[27] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraphs 5-8.

29. In January 1998, the Applicant accepted a posting to Dubai, United Arab Emirates. On that occasion his wife and three young daughters moved to Dubai with the Applicant.[28] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 6.

30. In late 2009, as a result of the global financial crisis work in Dubai reduced and the Applicant, his wife and daughters, relocated to Perth where he continued to work for C&BI in a new position.[29] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 7.

31. On 13 September 2015, the Applicant accepted an internal assignment to Dubai.[30] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 8.

32. The Applicant's employment conditions during the tax years in question were governed by the following documents:

33. These documents relevantly set out:

34. The Applicant's wife, Mrs Lexuan Quy (Mrs Quy) was born in Vietnam and migrated to Australia in 1982.[34] Exhibit 2, Tribunal Book, TB1, Applicant’s Statement of Facts, Issues and Contentions, page 3, paragraph 10.

35. Mrs Quy was unemployed and was the primary carer of their daughters and had agreed to accompany him to Dubai when he took up the international assignment.[35] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 14 and 16, paragraphs 9 and 24-25.

36. In September 2015, the Applicant's two older daughters were undertaking university studies in Perth and his youngest daughter was completing her final year of high school. The Applicant's daughters did not relocate to Dubai with the Applicant.

37. During the tax years in question the Applicant owned properties in Parramatta and Merrylands, New South Wales and Beldon, Western Australia. The Applicant purchased the property in Beldon as the family home in 2010, when relocating to Perth. During the tax years in question at least one of the Applicant's daughters resided in the Beldon property rent free. At all times during the years in question the Applicant paid the mortgage and all costs associated with the Beldon property, including the utility costs.[36] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 16-18, paragraphs 32-34 and 41-48.

38. During the tax years in question, the Applicant owned, reregistered, maintained and housed at the Beldon property, the following vehicles:[37] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 17, paragraphs 35-38.

39. During the tax years in question, the Applicant financially supported his wife as well as his daughters while they were studying at university.[38] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 17-18, paragraphs 41-49.

40. During the tax years in question, the Applicant's properties in New South Wales were tenanted, and the Applicant continued to pay the associated mortgages and costs.[39] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 17-18, paragraphs 39 and 50-51.

41. The Applicant was provided with employer-sponsored UAE Residency Permits. Those permits were issued for the periods 21 October 2015 to 20 October 2017,[40] Exhibit 1, T Documents, T52, page 560, UAE Dubai Residence Permit. 27 September 2017 to 26 September 2019[41] Exhibit 1, T Documents, T53, page 561, UAE Dubai Residence Permit. and 1 September 2019 to 31 August 2021.[42] Exhibit 1, T Documents, T54, page 562, UAE Dubai Residence Permit. These permits allowed the Applicant to live and work in the UAE Dubai.

42. Mrs Quy held spouse-sponsored UAE Residency Permits which commenced on 14 January 2016 and expired on 21 November 2019.[43] Exhibit 1, T Documents, T58-59, pages 568-569, UAE Dubai Residence Permits.

43. The Applicant was not eligible during the tax years in question to become a citizen of the UAE.[44] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 19, paragraph 62.

44. After the initial month in Dubai, the Applicant resided in the same apartment in Downtown, Dubai for the duration of his international assignment. While the Applicant found the apartment, negotiated the terms of the lease and paid any rent owing above the allowance provided by his International Assignment contract, the Tenancy Contracts showed that the Tenant and as such person responsible was the Applicant's Host Company CB&I Eastern Anstalt.[45] Exhibit 1, T Documents, T45-T50, pages 527-558, Dubai Rental Contracts.

45. While in Dubai, the Applicant purchased a Mitsubishi Pajero motor vehicle.

46. During the tax years in question the Applicant's DIAC records reflect the following:[46] Exhibit 1, T Documents, T107, page 660, DIAC Calculator for the Applicant.

Financial Year Days in Australia Days out of Australia No of Departures
2016[47] Noting that the Applicant departed Australia on 29 September 2015 to commence his international assignment in Dubai. 119 247 3
2017 47 318 3
2018 29 336 2
2019 34 331 2
2020 41 325 2

ATC 12626

47. During the period in question, Mrs Quy's DIAC records reflect the following:[48] Exhibit 1, T Documents, T108, page 661, DIAC Calculator for Mrs Quy.

Financial Year Days in Australia Days out of Australia No of Departures
2016[49] Noting that the Applicant departed Australia on 29 September 2015 to commence his international assignment in Dubai. 322 44 2
2017 183 182 3
2018 264 101 2
2019 310 55 2
2020 343 23 1

48. In February 2021, the Applicant moved to Thailand on a further international assignment with CB&I.[50] Exhibit 2, Tribunal Book, TB3, page 15, Applicant’s Witness Statement, paragraph 16.

APPLICATION PROCESS

49. Through his tax agents at the time, the Applicant filed his income tax returns for the tax years in question declaring the income he received from CB&I.[51] Exhibit 1, T Documents, T3-T7, pages 17-232, Applicant’s tax returns for the 2016 to 2020 income years.

50. The Respondent issued notices of assessment for the tax years in question.[52] Exhibit 1, T Documents, T12-T16, pages 405-414, Notice of assessments for the 2016 to 2020 income years.

51. On 29 March 2021, the Applicant, through his tax agent, lodged objections in relation to those notices of assessment.[53] Exhibit 1, T Documents, T31-T35, pages 465-499, Objection forms for the 2016 to 2020 income years. The Applicant objected to the notices of assessment on the basis that he believed he was not a resident of Australia for taxation purposes. In addition, the Applicant sought to claim deductions for capital allowances and capital works expenses on his Merrylands rental properties in all the tax years in question, other than the income year ended 30 June 2020.

52. During the objection process, the Respondent made three requests for information to the Applicant.[54] Exhibit 1, T Documents, T36, pages 500, Email from Respondent to Applicant’s tax agent requesting further information and attaching the Residency Questionnaire, T42, page 523, Email from Respondent to Applicant’s tax agent requesting further information and T62, pages 576-577, Email from Respondent to Applicant’s tax agent requesting response to additional questions. The Applicant, through his tax agent, provided responses to each of those requests.[55] Exhibit 1, T Documents, T37-T41, pages 501-522, Email from Applicant’s tax agent to Respondent regarding request for further information and the Residency Questionnaire with attachments; T43-61, pages 524-575, Emails from Applicant’s tax agent to Respondent regarding request for further information and attachments and T63-70, pages 578-615, Applicant’s tax agent to Respondent regarding request for further information and attachments.

53. On 6 January 2022, the Respondent disallowed the Applicant's objections in relation to the tax years in question regarding his residency status, however allowed his objections regarding the claimed capital allowance and capital works expenses.[56] Exhibit 1, T Documents, T2, pages 7-16, Notice of Objection Decision and Reasons for Decision.

54. On 18 January 2022, the Respondent issued amended assessments for the tax years in question (other than the income year ended 30 June 2020).[57] Exhibit 1, T Documents, T17-T20, pages 415-430, Notice of amended assessments for the 2016 to 2019 income years.

55. On 29 March 2022, the Applicant sought review of the Respondent's objection decision by way of application to this Tribunal.[58] Exhibit 1, T Documents, T1, page 1-12, Application for Review of Decision.

56. Prior to the Hearing of this matter the Applicant filed a Statement of Facts, Issues and Contentions on 17 October 2022[59] Exhibit 2, Tribunal Book, TB1, pages 1-5, Applicant’s Statement of Facts, Issues and Contentions. and a Witness Statement on 9 December 2022.[60] Exhibit 2, Tribunal Book, TB3, pages 13-20, Applicant’s Witness Statement. On the day before the Hearing, the Applicant further filed a Witness Statement of Mrs Quy.[61] Exhibit 3, Witness Statement of Mrs Quy. The Respondent filed a Statement of Facts, Issues and Contentions on 13 February 2023.[62] Exhibit 2, Tribunal Book, TB2, pages 6-12, Respondent’s Statement of Facts, Issues and Contentions.

57. On 5 May 2023, a Hearing was held by MS Teams. At the Hearing, the Applicant, was represented by Mr Timothy Poli of Kings Park Legal. The Applicant and Mrs Quy gave evidence separately, under affirmation. The Respondent, was represented at the Hearing by Ms Emma Luck, of Counsel, instructed by Mr Matthew Moharich on behalf of the Respondent.

58. At the Hearing, the parties sought a direction to file written closing submissions. The Tribunal issued directions requiring the parties to file closing written submissions.[63] Transcript, page 3.

59.

ATC 12627

From that point the finalisation of this matter way delayed as the Applicant, terminated the services of Mr Poli. The Applicant and Mrs Quy advised the Tribunal that they would seek alternative legal representation or would provide written closing submissions themselves. On several occasions Mrs Quy advised the Tribunal that she was subsequently representing the Applicant.

60. On 7 August 2023, the Applicant and Mrs Quy filed affidavits, dated 3 August 2023 and 4 August 2023 respectively. The Applicant advised in a telephone direction hearing conducted on 14 August 2023 that he sought for the affidavits to be admitted into evidence. The Respondent objected on the basis that the time to file evidence had passed and there was no opportunity available to test assertions being made in the affidavits. The Tribunal explained that it was not appropriate for further evidence to be filed outside of the Hearing and suggested that the affidavits instead be treated as submissions.

61. The issue on the standing of the affidavits was adjourned until the Applicant filed his Closing Submissions.

62. On 14 September 2023, the Applicant filed Closing Submissions.

63. A further telephone directions hearing was held on 19 September 2023. The Applicant maintained his request for the affidavits to be placed into evidence. The Applicant explained that he believed that he was not adequately represented at the Hearing and wanted the affidavits to be considered. The Tribunal outlined that answers to questions by his solicitor at the Hearing should not now be different after the Hearing. The Tribunal further noted that the Applicant's Closing Submissions did not refer to the affidavits.

64. The Tribunal decided the affidavits filed by the Applicant on 7 August 2023 would be considered as submissions. Both parties agreed to that approach.

65. On 16 October 2023, the Respondent filed Closing Submission in reply.

APPLICANT'S EVIDENCE AND CONTENTIONS

Applicant's Evidence

66. In response to a request for information about his circumstances in relation to the 2016 to 2020 income years and surrounding years[64] Exhibit 1, T Documents, T36, page 500, Email from Respondent to Applicant’s tax agent requesting further information and attaching the Residency Questionnaire. the Applicant submitted a completed Residency Questionnaire on 16 May 2021.[65] Exhibit 1, T Documents, T38, pages 502-509, ATO Residency Questionnaire dated 14 May 2021. In the Residency Questionnaire, the Applicant provided that:[66] Exhibit 1, T Documents, T38, pages 502-509, ATO Residency Questionnaire dated 14 May 2021.

67. The Applicant provided a Witness Statement dated 9 December 2022 outlining his personal, employment and financial circumstances.[67] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-20. In addition to the background outlined above the Applicant provided:[68] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-20.

…..

15. I am the sole income earner in the household and am financially responsible for my wife and adult daughters. This includes paying the mortgage on all three of the properties that I owned, maintaining the family cars, family health cover with HBF, and family expenses.

…..

25. My wife had agreed to accompany me to Dubai when I took up the offer of employment there.

26. Although my wife had worked as a bookkeeper previously, she is not financially independent.

27. My wife would return to Australia during the relevant period because she wanted to spend more time with our daughters. My wife also returned to Perth during the relevant period to assist her ill mother, who ultimately passed away in 2017. Further, in 2020, my wife was unable to travel during the pandemic as the Australian borders were closed.

……

39. I am still paying for the mortgage for all three properties which are held for investment purposes after I permanently departed Australia to live in Dubai.

40. I store my Toyota Landcruiser and my motorcycle in Australia as they have sentimental value.

41. While living in Dubai, my [middle and youngest] adult daughters, [Redacted] who are also Australian citizens continued to live at the Property whilst they attended University.

42. My eldest daughter, [Redacted] moved out of the Property in about 2017 and no longer lives at the Property with her sisters.

43. [My middle and youngest daughters] continued to drive the two Toyota Corolla cars whilst they were living at the Property and I was living and working in Dubai.

44. I did not transfer the registration of the Toyota Corolla cars to my daughters names because it would incur transfer duty which is a cost I considered to be unnecessary.

45. I did not receive rent from [my daughters] whilst they were living in the Property.

46. [My daughters] did not pay any utility bills with respect to the Property.

47. Although [my middle and youngest daughters] are adults, I continued to support them financially whilst they were continuing with their university studies.

48. The reason that I did not charge rent to my daughters to reside at the Property and that I also paid for the utility bills is because I wanted them to focus on their university studies and not to worry about working in a job to pay rent. I financially supported my daughters in the same way that any parent would when their children are studying in another country.

49. I also support my wife financially.

……

58. I had a social network in Dubai.

59. Although I own rental properties, motor vehicles and have a bank account in Australia, the bank account is for the purpose of managing the rental properties

ATC 12629

and providing financial assistance to my adult daughters and the motor vehicles are principally for my daughters to use.

68. At the Hearing, the Applicant appeared by MS Teams and gave evidence under affirmation. The Applicant:[69] Transcript, pages 10-45.

Mrs Quy's evidence

69. Mrs Quy provided a Witness Statement dated 4 May 2023 outlining details of her marriage to the Applicant, her family and residence arrangements.[70] Exhibit 3, Witness Statement of Mrs Quy. Mrs Quy provided that:[71] Exhibit 3, Witness Statement of Mrs Quy.

70. At the Hearing Mrs Quy appeared by MS Teams and gave evidence under affirmation. Mrs Quy:[72] Transcript, pages 46-59.

Applicant's Submissions

71. On 7 August 2023, the Applicant and Mrs Quy filed affidavits dated 3 and 4 August 2023 respectively. The Tribunal agreed to take those affidavits into consideration as submissions.

72. On 14 September 2023, the Applicant provided lengthy Closing Submissions.

73. Having reviewed those documents, together with the evidence set out above, the Tribunal observes that the documents in part repeat the evidence before the Tribunal, however, are in places repetitive, contradictory, challenging to follow and looked to introduce new evidence.

74.

ATC 12632

In the Applicant's Affidavit dated 3 August 2023, he relevantly provided:

75. In her Affidavit dated 4 August 2023, Mrs Quy relevantly provided:

77. The Applicant's contentions set out in his Closing Submissions filled on 14 September 2023, made no reference to the affidavits filed on 7 August 2023.

78.

ATC 12634

The Applicant contended that he was not a resident of Australia for each of the tax years in question as he did not reside in Australia, did not have his domicile in Australia, however if he did then his usual place of abode was in Dubai and not Australia.[80] Applicant’s Closing Submissions, page 2, paragraph 4.

79. The Applicant submitted that his contentions were supported by "the evidence of his subjective intention when he departed Australia, the practical circumstances of his living arrangements in Dubai, his physical presence in Dubai, and nature of his ongoing family, financial and social ties with Australia".[81] Applicant’s Closing Submissions, page 2, paragraph 5.

80. The Applicant provided the following contentions:[82] Applicant’s Closing Submissions, pages 10 to 22.

The Applicant ' s Subjective Evidence [83] Applicant’s Closing Submissions, page 10, paragraphs 40-42.

…..

40. The Applicant, in his oral evidence to the Tribunal, indicated an intention, in the long-term and when he retired from work, to return to Australia. The question put to the Applicant on examination does not elicit whether his intention to return to Australia when he retires is his present intention or whether it was his intention at the time, he moved to Dubai in 2015. In either event, the Applicant submits that his intention to return to Australia when he retires - whether that is his present intention or was his intention when he moved to Dubai in 2015 - does not derogate from his intention being to move to live and work in Dubai, as his home, at least for the time being, that being the standard set by the relevant case law authorities.

41. That it was the Applicant's subjective intention to move permanently from Australia to Dubai is further validated by the fact, ascertainable in hindsight, that from September 2015, the Applicant had not returned to Australia other than for trips of relatively short duration and that in February 2021, the Applicant and Mrs Quy moved to Thailand, to assume a new role with the same employer.

42. From 2015 till date they have not since returned to live in Australia. But now the Applicant and Mrs Quy have discussed their retirement plan to retire in Thailand where the cost of living is lower than in Australia and the Thai Government offers retirement plans for all foreigners.

…..

The Applicant ' s living arrangements in Dubai (where he slept, ate and had his settled place of abode) [84] Applicant’s Closing Submissions, pages 14-16, paragraph 58.

……

b. Day-to-Day items:

The Applicant and Mrs Quy paid a lot more than the employer's furniture allowance since they were invested in making a new home for themselves in Dubai. They also bought for themselves additional furniture, high quality lamps, lightings, a big screen TV with a stereo surround sound system for their home apartment's theatre and a Karaoke system so they both watched movies and sang together as a couple.

The Applicant and Mrs Quy maintained their home apartment (including cleaning and maintenance tasks), decorated the Apartment, cooked and ate meals in the Apartment and slept in the Apartment, as any individual would, in their settled home.

……

h. Social Networks:

The Applicant and Mrs Quy had an extensive network of friends, associates and colleagues in Dubai who he socialised with, including friends from his previous 11-year period of residing in Dubai, through his church community 89 and through his hobby of surfing.

…..

The Applicant ' s Family Arrangements while He was Physically Present in Dubai [85] Applicant’s Closing Submissions, pages 16-21, paragraph 65.

  • …..
  • h. The fact that Mrs Quy spent periods of time in Australia should not detract from the Applicant's position, that during the Relevant Years, he was a resident of Dubai and not a resident of Australia. The relevant enquiry is not whether Mrs Quy was a resident of Australia but whether or not the Applicant was a resident of Australia and, in relation to that, him living with Mrs

    ATC 12635

    Quy as husband and wife in Dubai is undeniably a relevant consideration. However, Mrs Quy's decision to spend time in Australia during the Relevant Years is explicable by the personal and family motivations which she explains in her evidence and was a choice she made independently and which the Applicant could not dictate or control.
  • i. Moreover, the evidence shows that the Applicant and Mrs Quy were in a long-term and, it can be reasonably inferred, stable marriage, and their daughters were adults living independently in Perth. Mrs Quy also gives evidence that, due to her inability to work in Dubai and the Applicant being occupied by his professional and work activities in Dubai, she had considerably more time than that the Applicant and, as such, was able to travel to Australia and attend to the personal matters that she discusses in her evidence.
  • …..

A House in Australia [86] Applicant’s Closing Submissions, pages 21-22, paragraph 75.

…..

75. The Applicant also states in his evidence in the trial on 5 May 2023 that, if he was to return to Australia upon his retirement from the workforce, that he would likely relocate to Sydney where his extended family live, rather than to Perth. Mrs Quy states in her evidence that if hers and the Applicant's children all decided to leave Perth after completing their studies, Mrs Quy and the Applicant would have no reason to visit Perth. This is further suggestive of the fact that the Applicant's links to Perth, and therefore to the Beldon dwelling, were tenuous and that he did not regard the Beldon property as his residence or home, at least in the long term.

…..

Domicile in Australia [87] Applicant’s Closing Submissions, page 25, paragraphs 95-97.

95. The Applicant was born in Vietnam in 1962 and migrated to Australia as a child with his parents in 1978. He obtained Australian citizenship in 1978. Until the Applicant moved to Dubai in 2015, he lived in Australia. On this basis, the Applicant accepts that he had an Australian domicile at least until 2015.

96. For the reasons the Applicant explained in his evidence, he did not obtain citizenship in the UAE, as citizenship in the UAE required that a person had resided in the UAE for 30 years or was married to an Emirate citizen. The Applicant met neither of these requirements. As such at all times the Applicant maintained his Australian citizenship.

97. As stated previously, the Applicant departed Australia in 2015 with an intention that he remain in Dubai for a period of indefinite duration. The Applicant's actions, both in preparation for his move to Dubai, and in the way that he established his living circumstances in Dubai, as outlined in these submissions, are consistent with and support his intention to commence residency in Dubai for a period of unlimited duration, but not necessarily forever, given his stated intention that at some point in time he may return to Australia. Consistent with this, the Applicant submits that he established a Domicile of Choice in Dubai and as such ceased his Australian domicile.

……

Permanent Place of Abode in Dubai [88] Applicant’s Closing Submissions, pages 26-27, paragraph 105.

105. The Applicant clearly moved his life to Dubai for two years or longer and for five years during the Relevant Years. The Applicant substantially shut down his ties with Australia (moving to Dubai with Mrs Quy, storing his Australian vehicles, taking all of his personal belongings, his hobbies with him, having full-time employment in Dubai, etc). That means that for around 93%of that five year period during the Relevant Years, the Applicant lived overseas and was not even physically present in Australia. The Applicant lived in a foreign country Dubai UAE on a non-temporary and hence "permanent" basis for those five years in one stable home apartment so Dubai was his "permanent place of abode" overseas.

…..

[Footnotes omitted]

81. The Applicant's Closing Submissions, in conclusion, summarised his contentions as follows:[89] Applicant’s Closing Submissions, pages 28-29, paragraphs 107-112.

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107. The totality of the Applicant's circumstances show that he did not reside in Australia according to the "ordinary concepts test" during the Relevant Years. There are strong evidentiary factors which support this conclusion, including:
  • a. his continued physical presence in Dubai and from 2015 till date the Applicant and Mrs Quy have not since returned to live in Australia. The Applicant lived a settled life in Dubai for the first five years after which he moved to Thailand where he has again established a settled life.
  • b. During the Relevant Years the Applicant and Mrs Quy did not reside in Australia but they both resided in their nice apartment in Dubai. They had their five and a half years long-term lease on their home apartment, in a secure residential complex, in a prominent location with very good amenities and of which the Applicant and Mrs Quy has exclusive use and possession.
  • c. his home apartment in Dubai is neither transient nor temporary accommodation. it was where he could and did settle as a matter of deliberate choice. On the evidence, no-one else could or did occupy the Apartment either during his business trips or during his holidays abroad with Mrs Quy.
  • d. the establishment of his extensive social network of friends in Dubai who he socialised with, and from his previous 11-year period of residing in Dubai including connections through his church community and through his hobby of surfing. Also the establishment of his employment ties in Dubai; the Applicant had been working as a full-time employee in Dubai Engineering office with CBI Eastern Anstalt for five and a half years.
  • e. since 2015, he has not been in Australia other than for very short and irregular holidays, in total only 187 days from 17 December 2015 to 28 November 2020; and
  • f. he established a domicile of choice in Dubai.

108. During the Relevant Years, the Applicant and Mrs Quy travelled to Taipei and India as tourists. Since living in Thailand, the Applicant and Mrs Quy travelled around to visit regional areas and neighbouring countries like Vietnam. They also continued to travel together to Australia as tourists to visit their children in Western Australia and other family members and friends in New South Wales.

109. In the trial on 5 May 2023, it is stated that the Applicant intended to return to Sydney Australia to live at the end of his contract but that there was no definite time for his return. However, the Applicant and Mrs Quy do not intend to return to Australia to live since they are likely to retire in Thailand.

110. Presence and settledness is the largest part of the exercise of determining residency. If the Applicant has not been living a settled life in Australia, it is unlikely that he will be resident in Australia unless there are specific circumstances.

111. The Applicant submits that it would be an unusual and mistaken conclusion where someone who works and lives Dubai, with Mrs Quy, with most or all of his personal effects for five income tax years and who only returns to Australia as tourist for around five weeks per year for each of these five years, to visit his adult daughters in Perth, relatives and friends in Sydney , should be found to remain a resident of Australia for tax purposes.

112. For these reasons, the Commissioner should be satisfied that the Applicant's permanent place of abode was in Dubai and outside of Australia during the Relevant Tax Years.

RESPONDENT'S CONTENTIONS

Closing Submissions

82. The Respondent provided Closing Submissions dated 16 October 2023. The Respondent contended that the Applicant had not discharged his onus of proving that he was not an Australian resident for tax purposes during each of the tax years in question.[90] Respondent’s Closing Submissions, paragraph 8.

83. The Respondent contended that to the extent that there is any inconsistency between Mrs Quay's evidence, the evidence of the Applicant, and the contemporaneous records, the contemporaneous records should be preferred as the source of evidence.[91] Respondent’s Closing Submissions, paragraph 47.

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Ordinary Concepts Test

84. In relation to the Ordinary Concepts Test, the Respondent submitted that:[92] Respondent’s Closing Submissions, paragraph 30.

30. There is a distinction between:

  • (a) on the one hand, a person who has relocated overseas and returns to Australia only for the purpose of attending to the finalisation of their affairs here and to visit family on a temporary basis as part of a well-planned and permanent move, such that the connections to Australia can be characterised as mere "remnants of his prior residency" (which was the case in Harding);[93] Harding v Commissioner of Taxation [2018] FCA 837 at [84] ; endorsed as correct in Harding v Commissioner of Taxation [2019] FCAFC 29 at [24] . and
  • (b) on the other hand, a person who has a long-term plan to keep returning to Australia for work and family purposes, and whose behaviour is not consistent with the formation of any definite plan in any tax year to abandon Australia completely and when freed of business exigencies, returns to Australia[94] Pike v Commissioner of Taxation [2019] FCA 2185 at [60] , confirmed on appeal in Pike v Commissioner of Taxation [2020] FCAFC 158 . .

85. The Respondent contended that according to the Ordinary Concepts Test the Applicant was a resident of Australia for tax purposes for the tax years in question, providing the following:[95] Respondent’s Closing Submissions, paragraphs 54-63.

54. On leaving for Dubai and throughout his posting there, the Applicant retained the family home in Beldon, paid all expenses relating to the home[96] Transcript at pages 36 and 45. , and, notwithstanding being entitled to ship his belongings to Dubai at his employer's expense, he only took his clothes with him and a few musical instruments. He purchased his own cutlery and crockery in Dubai. [97] Exhibit 1, T Documents, T38, page 503, ATO Residency Questionnaire and Transcript at page 26.

55. The Applicant left all furniture, appliances, and equipment in the Beldon family home. The Applicant also retained several vehicles at the Beldon property, for which he continued to pay the registration and insurance. The Applicant renewed his Western Australian driver's licence in 2017 and in 2022.[98] Exhibit 1, T Documents, T115, page 673, Email from WA Department of Transport to the Respondent regarding request for Drivers Licence and Car Registration information and Transcript at pages 36-37.

56. Notwithstanding their ongoing relationship, the Applicant's wife did not move to Dubai with the Applicant, but remained in family home in Beldon with the Applicant's daughters, furniture, cars and possessions. The Applicant's wife was in Western Australia for more than half of any of the relevant years and often in excess of 300 days in each year. The Applicant seeks to explain his wife's lengthy stays in Australia in 2020 as being due to the Covid pandemic, however, the duration of the Applicant's wife's residence in Australia that year is consistent with her residence there in previous years. Under cross-examination the Applicant accepted that, although his employment contract for the posting anticipated that the Applicant's wife would move out to Dubai with him, that did not in fact happen.[99] Exhibit 1, T Documents, T108, 661, DIAC Calculator for Mrs Quy and Transcript at pages 34-36.

57. The Applicant's wife also gave evidence of her reasons for remaining in Australia, speaking at length about her role as a mother, her voluntary work and place in the community in Australia.[100] Transcript at pages 53-57. On her incoming passenger cards, the Applicant's wife regularly stated that she intended to live in Australia for the next 12 months, giving the Beldon family home address as her intended residence, as well as identifying as a resident returning to Australia. [101] Exhibit 1, T Documents, T90, 635, Incoming Passenger Card; T92, page 637, Incoming Passenger Card and T95, page 640, Incoming Passenger Card.

58. The Applicant's employment contracts[102] Exhibit 1, T Documents, T44, pages 528-538, International Assignment to CB&I Eastern Anstalt, Dubai. demonstrate that throughout his time in Dubai, the Applicant's employer remained CBI Construction Pty Ltd, an Australian entity, incorporated under the Corporations Act 2001 (Cth). At the time of leaving Australia for Dubai, the Applicant was on an international assignment from his Australian employer, with fixed term duration of 24 months, which, subject to the terms of the agreement, might be extended beyond the term or terminated earlier.

59. At this point, and throughout his assignment in Dubai, the Applicant's contract of employment made various provisions for the Applicant to mobilise from, visit and ultimately return to his point of hire, being Perth, WA,[103] Transcript at pages 18 and 23. at the employer's expense.

60. Except for one family holiday, the Applicant utilised his annual leave and travel allowance to return to his family at the Beldon family home.[104] Exhibit 1, T Documents, T38, page 504, ATO Residency Questionnaire.

61. The Applicant's base salary was paid by his Australian employer into his

ATC 12638

Australian ANZ bank account, save for a relatively small amount paid into a Dubai account to comply with Dubai's labour regulations. The Applicant's Australian employer committed to meeting the cost of transferring the UAE component of the Applicant's salary to this Australian bank account.

62. Despite being requested to do so, the Applicant has not provided copies of his Australian ANZ bank statements.[105] Exhibit 1, T Documents, T38, page 502, ATO Residency Questionnaire. During cross examination the Applicant stated that the ANZ bank statements could be readily obtained and provided, [106] Transcript at page 27. yet, despite attempting to introduce post hearing affidavits, the Applicant has not provided these documents. In the circumstances, it is open to the Tribunal to infer that this evidence would not have assisted the Applicant's case;
Jones v Dunkel [1959] 101 CLR 298.

63. Throughout the relevant period the Applicant maintained Australian health insurance with HBF (an Australian based health insurance fund) and his employer made regular contributions to the Applicant's Australian superannuation fund on his behalf, to which the Applicant also made additional concessional contributions.[107] Exhibit 1, T Documents, T8, page 242, Amended Tax return for the 2016 income year; T9, page 284, Amended Tax return for the 2017 income year; T10, page 326, Amended Tax Return for the 2018 income year; T11, page 369, Amended Tax return for the 2019 income year; T21-T26, pages 431-449, Notices regarding the Applicant’s excess concessional contributions assessments and T38, page 506, ATO Residency Questionnaire.

86. The Respondent contended that for those reasons the Applicant had maintained extensive connections to Australia and taking the evidence into account was a resident in Australia for tax purposes for each of the tax years in question under the Ordinary Concepts Test, on the same basis as the taxpayer was in
Commissioner of Taxation v Pike [2020] FCAFC 158.[108] Respondent’s Closing Submissions, paragraph 64.

Domicile Test

87. The Respondent contended that the Applicant is a resident of Australia under the Domicile Test contained in section 6(1)(a)(i) of the ITAA 1936 based on his Australian citizenship.[109] Respondent’s Closing Submissions, paragraph 65.

88. The Respondent contended that on departing Australia and ongoing, the Applicant did not take any steps commensurate with an individual intending to quit Australia and set up a permanent place of abode elsewhere. The Respondent contended that whilst the Applicant may have been physically present in Dubai, when viewed objectively, there was no intention to make that his permanent place of abode.[110] Respondent’s Closing Submissions, paragraph 66.

89. The Respondent made the following submissions in support of his contentions:[111] Respondent’s Closing Submissions, paragraphs 68-73.

68. The quality of the Applicant's engagement with Dubai and the UAE is not consistent with a person who intends to, or in fact does, permanently reside there.

69. The lease on the apartment in Dubai in which the Applicant was residing is in the name of his host company, which also pays most of his utility bills associated with his presence there.[112] Exhibit 1, T Documents, T45-T50, pages 539-555, Dubai Rental Contracts.

70. The Applicant's HSBC bank account, into which a portion of his income is paid to comply with UAE labour regulations, and platinum card statements disclose minimal discretionary or leisure spending in Dubai beyond food purchases. The Applicant transferred the balance of his HSBC account overseas when he left the UAE.[113] Exhibit 1, T Documents, T56-T57, pages 564-567, HSBC Account Statements and Transcript at pages 30-32 and 41.

71. The Applicant furnished his apartment with an allowance provided by his employer. The photographs of the apartment provided by the Applicant do not disclose the quality of furniture indicative of setting up a new home.[114] Exhibit 1, T Documents, T65, page 582, Al Fal Real Estate Letter to Allow Furniture Removal on 23 February 2021 and 6 images. The transient nature of these items is reinforced by the fact that the Applicant chose not to ship them to Thailand on leaving Dubai. [115] Exhibit 1, T Documents, T66, page 589, Elegant Line Logistics Removalist log of items and destination checklist dated 23 February 2021 and Transcript at page 29.

72. During the objection process, the Applicant was asked to list churches, community groups, clubs or organisations he has been a member of in the last 7 years. He did not list any organisations. Similarly, the Applicant's description of his daily routine in Dubai does not include any reference to any particular social networks, friendships, community groups, clubs, or organisations.[116] Exhibit 1, T Documents, T38, page 504, ATO Residency Questionnaire.

73. On being reassigned to a position in Thailand by his employer, the Applicant left UAE. The Applicant and his wife ultimately plan to spend their retirement in Australia, most likely to the Sydney residence, where their family are.[117] Transcript at pages 39-40.

90. The Respondent contended that the Applicant is not able to satisfy the Tribunal that

ATC 12639

he established a permanent place of abode in Dubai or anywhere else outside of Australia during the tax years in question.[118] Respondent’s Closing Submissions, paragraph 74.

CONSIDERATION

91. The Tribunal has reviewed and considered all material placed before it. As a result the Tribunal notes that the Applicant sought to introduce new evidence after the Hearing. A clear disparity is evident between the evidence provided by the Applicant prior to and at the Hearing (as outlined in his response to the Respondent's Residency Questionnaire, his filed Witness Statement and his oral evidence) to the submissions set out in his Affidavit and Closing Submissions. The contradictions in the Applicant's evidence and submissions and the Witness Statement and Affidavit provided by Mrs Quy, is readily apparent when considering the explanations of their marital living arrangements during the tax years in question, the care for their adult daughters and the duration of Mrs Quy's presence in Australia and the associated reasons for it.

92. At the Hearing, the Applicant outlined that he and Mrs Quy were meant to move to Dubai, together, as a family for employment purposes, however he agreed that, that, did not occur. Rather she visited him there. The evidence provided by Mrs Quy and the submissions filed by the Applicant after the Hearing, asserted that she relocated to Dubai with the Applicant, in contradiction to his evidence at the Hearing and the DIAC records.

93. The evidence around community and personal connections the Applicant made in Dubai also differ before and at the Hearing when compared to the submissions provided after the Hearing. Until the filing of the Applicant's Affidavit and Closing Submissions, he had not made any assertions in relation to attending Church, making new friends or seeing friends he had made during an earlier period residing in Dubai.

94. The Tribunal considers that the Applicant's evidence at the Hearing and set out in his responses to the Respondent's Residency Questionnaire are more reliable than the submissions he provided after the Hearing. The Tribunal notes that the Applicant gave his evidence at the Hearing under affirmation, without Mrs Quy being present.

95. In determining whether the Applicant was a resident of Australia for taxation purposes during the tax years in question, save for the 183-Day and Superannuation Tests of which the Tribunal accepts did not apply to the Applicant, the Tribunal has considered the remaining two tests, being the Ordinary Concepts and Domicile Tests. The role of the Tribunal is to consider the reviewable decisions afresh.

96. The Tribunal has considered the legal authorities as outlined and referred to above (as well as those referred to by the parties) together with, the evidence, submissions and contentions before it. As a result, the Tribunal finds that the Applicant was a "resident of Australia" pursuant to the definition in section 6(1)(a) of the ITAA 1936 during the tax years in question. The reasons for the Tribunals findings are set out below.

Resident according to the Ordinary Concepts Test

97. As set out above in the discussion of relevant case law, the term "reside" is not defined in the relevant statute. The principles established by case law provide that physical presence or absence from a particular location is not on its own determinative of where a person is taken to reside for taxation purposes. A person's continuity of association and intention to return to and to continue to treat a place as home are relevant determinative factors.

98. The Applicant resided at his Beldon home before he commenced his work assignment in Dubai, he also resided there (on most occasions) when he returned to Australia throughout the tax years in question. The Applicant's evidence and submissions regarding his view of his Beldon home were contradictory, particularly where he stated in his Affidavit signed in August 2023 that he resided in Thailand and also resided and owned the property at Beldon.[119] Applicant’s Affidavit paragraph 3. The Tribunal notes that Mrs Quy’s Affidavit provides an identical description of her living arrangements. While in Dubai, the Applicant resided in accommodation he sourced but was leased by his host company and paid for, in most parts, by his employer.

99. The Applicant's evidence was that his Beldon home was not offered for rent or

ATC 12640

sale during the tax years in question. Further his furniture largely remained in the home, his multiple vehicles remained stored on the property, he maintained all costs associated with the property including all utility costs. The Applicant's explanation as to why his Beldon home was not offered for rent or sale during the tax years in question was that his daughters continued to reside in the property whist completing their studies and moving on to homes of their own. The Applicant told the Tribunal that two of the vehicles were used by his daughters and the others he kept for sentimental reasons. He said that it was easier to keep them registered than to have to reregister them again later.

100. The Applicant's written evidence and submissions, which supported his arrangements with his employer, set out that his wife had relocated with him to Dubai. The records outlining the time Mrs Quy spent in Australia during the tax years in question however, reflected that the reality of the situation was quite different. During the tax years in question Mrs Quy was in Australia for at least half of each year, and, other than in the income year ended 30 June 2017, for substantially more than half the year. At the Hearing, the Applicant gave evidence that while he and Mrs Quy were meant to have moved to Dubai as a family, what really occurred was that Mrs Quy continued to reside in the Beldon home with their daughters and visited him in Dubai. The Tribunal prefers the Applicant's evidence provided at the Hearing as it is more consistent with the objective evidence before it.

101. Throughout her evidence, Mrs Quy maintained that her home was with her husband. Her actions however, demonstrated that she was not physically present with the Applicant for most of the tax years in question. The evidence before the Tribunal shows that Mrs Quy continued to live her life in Australia providing care to her adult daughters, her mother and community members. The Tribunal notes that Mrs Quy gave evidence that she was unable to leave Australia due to COVID-19 travel restrictions. The Tribunal does not accept that evidence in circumstances where the ban on Australians travelling overseas did not commence until 24 March 2020.[120] Appendix 2 – Parliament of Australia (aph.gov.au) Mrs Quy could have returned to Dubai well before travel was restricted if she had of, in fact, been residing there with the Applicant. The Tribunal further notes that Mrs Quy's spouse sponsored UAE-Residency Permit expired on 21 November 2019 and as such from that date she was not entitled to reside in Dubai with the Applicant. The expiry date of Mrs Quy's residency permit was prior to mid-January 2020 when the Australian Government started to put COVID-19 emergency health mechanisms in place.[121] Appendix 2 – Parliament of Australia (aph.gov.au)

102. While the actions of Mrs Quy and where she resided is not determinative of the Applicant's residency status, it goes to strengthening the Applicant's tie to Australia during the tax years in question. The Applicant had not simply provided a place for his daughters to live while they completed their study, he maintained the family home. The Applicant maintained the family home for his wife and children and returned to it on almost all occasions he had leave from work. The Applicant's evidence was that he supported his wife and daughters financially throughout the tax years in question. Mrs Quy's evidence was that she did not work during the tax years in question and that the Applicant was an excellent provider for their family.

103. The Applicant's employment and assignment contracts set out that the assignment to Dubai was for a period of 24 months which could be extended or terminated earlier with notice provided by either party. The Applicant's work history indicated that he maintained his employment with CB&I Australia and worked in which ever location they assigned him to. There was no indication that the Applicant had sought alternative employment outside of his Australian employer, in fact the evidence before the Tribunal is that he continues to work for CB&I Australia on a further international assignment.

104. Given the Applicant was able to live and reside in Dubai only by virtue of his employer-sponsored UAE Residency Permits, his stay in Dubai was, for all intents and purposes, limited. The Tribunal notes that Mrs Quy's spouse-sponsored UAE Residency Permits ended on 21 November 2019. There was no suggestion that the Applicant

ATC 12641

ever intended to reside in Dubai beyond his international work assignment.

105. At the Hearing, the Applicant told the Tribunal that he intended to retire in Australia, most likely in New South Wales, rather than in Western Australia as that is where his and Mrs Quy's family reside. The Tribunal notes that, the Applicant's position in this regard changed by virtue of the submissions made in his Affidavit and Closing Submissions, stating that he had no intention of returning to Australia to live, rather he planned to retire in Thailand. While the Applicant may now in fact intend to retire in Thailand, the Tribunal considers that his evidence at the Hearing is more likely a reflection of his intentions during the tax years in question.

106. The Applicant maintained investment properties and bank accounts in Australia throughout the tax years in question.

107. The Applicant's evidence was that he maintained his Australia private health insurance, stating that it covered his daughters and both himself and Mrs Quy during times that they were visiting Australia or when they needed urgent medical treatment. The Tribunal notes however that both the Applicant and Mrs Quy's medical treatment was covered by CB&I whilst on assignment in Dubai. As such had the Applicant intended not to be an Australian resident, it would have been open to him to seek travel insurance for periods he returned to Australia. The Tribunal has no evidence before it that the Applicant's private health insurance provided him and Mrs Quy with only intermittent cover whilst in Australia and for emergencies.

108. The Tribunal notes that the incoming and outgoing passenger cards and the Applicant's and Mrs Quy's evidence and submissions in relation to them are contradictory in nature. As such the Tribunal puts no weight on those documents and does not consider them to be determinative of the issues before it.

109. After considering the totality of the evidence and submissions before it objectively, the Tribunal places little weight on the Applicant's evidence and submissions set out in his Witness Statement, Affidavit and Closing Submissions to the extent it is inconsistent to that he provided at the Hearing or in response to the Respondent's Residency Questionnaire.

110. As such the Tribunal considers that the Applicant, despite being absent from Australia for the majority of the tax years in question, maintained an intention to return to Australia and an attitude that Australia remained his home during the tax years in question. The Tribunal considers that such an intention, attitude and continued connection to Australia was evidenced by the Applicant:

111. Based on the evidence before it, the Tribunal considers that the Applicant's actions throughout the tax years in question identified a long-term plan to keep returning to Australia for family purposes and did not demonstrate behaviour consistent with the formation of any definite plan in any of the tax years in

ATC 12642

question to abandon Australia completely, either for a period of time or indefinitely.

112. The Tribunal finds that the for the purposes of the Ordinary Concepts Test the Applicant was a resident of Australia for the tax years in question.

Resident according to the Domicile Test

113. The Domicile Test requires firstly the consideration of whether during the tax years in question the Applicant was domiciled in Australia and then if so whether the Tribunal is satisfied that his permanent place of abode was outside Australia.

114. In relation to the first component, the Applicant's Closing Submissions were confusing as to whether he maintained a position that he had not continued to be domiciled in Australia throughout the tax years in question. The evidence however, as set out above establishes that the Applicant's domicile of choice is Australia. There is no evidence before the Tribunal to suggest otherwise. As such the Tribunal considers it necessary to consider whether the Applicant's permanent place of abode was outside Australia for the tax years in question.

115. As established by the case law set out above, to establish a permanent place of abode, a person does not need to intend for it to be so indefinitely, however what they need to establish is that it is their permanent place of abode rather than their temporary place of abode. Consideration is given to the continuity or otherwise of the persons presence, the duration of their presence and the durability of their association with the particular place. Further, a person's intention to make their home a place of abode outside of Australia is relevant, particularly to whether they can be said to have abandoned their residence in Australia and had commenced living in another country in a permanent way.

116. The Applicant's contentions set out in his Closing Submissions[122] As provided in paragraph 80 above. are contradictory in nature and do little to support his position that his permanent place of abode during the tax years in question was in Dubai. This is particularly the case in circumstances where submissions are made that are contrary to evidence previously provided.

117. Having reviewed the submissions and contentions of the Applicant and having considered the evidence before it, the Tribunal agrees with the contentions made by the Respondent set out in paragraphs 89-90 above.

118. In objectively considering the evidence before it, as outlined above, and specifically discussed in paragraphs 91 to 94 and 97 to 111 above, the Tribunal considers that the Applicant had not abandoned his residence in Australia during the tax years in question, nor had he established a permanent place of abode in Dubai or anywhere else outside of Australia.

119. The Tribunal finds that the for the purposes of the Domicile Test the Applicant was a resident of Australia for taxation purposes for the tax years in question.

CONCLUSION

120. For the reasons set out above, the Tribunal is not satisfied that for taxation purposes, the Applicant was not a "resident of Australia" in the income years ending 30 June 2016 to 30 June 2020. To be clear, the Tribunal has considered the Applicant's position for each of the tax years in question. Based on the evidence before it, the Tribunal considers that the Applicant's circumstances leading to the findings set out above were consistent across the tax years in question.

121. The Tribunal finds that the Applicant has not discharged his onus to prove that the assessments for the income years ending 30 June 2016 to 30 June 2020 are excessive or otherwise incorrect.

122. Accordingly, the decisions under review are affirmed.

Footnotes

[1] Exhibit 1, T Documents, T2, page 7, Notice of Objection Decision.
[2] Exhibit 1, T Documents, T1, pages 1-6, Application for Review.
[3] Exhibit 1, T Documents, T2, pages 7-16, Notice of Objection Decision and Reasons for Decision.
[4] Section 14ZY of the TAA 1953.
[5] Section 14ZZ of the TAA 1953.
[6] Sections 6-5(2) and 6-10(4) of the ITAA 1997.
[7] Sections 6-5(3) and 6-10(5) of the ITAA 1997.
[8] Stockton v Commissioner of Taxation [2019] FCA 1679 at [23] per Logan J; see also Harding v Commissioner of Taxation [2019] FCAFC 29 at [60] which referred to Hafza v Director-General of Social Security (1985) FCR 444 at 449-450 where Wilcox J considered that residence involved the question of a person’s physical presence in addition to a person’s intention to treat a particular place as their home.
[9] Gregory v Deputy Commissioner of Taxation (WA) (1937) 57 CLR 774 at 777 ; Inland Revenue Commissioners v Lysaght (1928) AC 234 at 245 .
[10] Respondent’s Closing Submissions, paragraphs 19-31.
[11] Comcare Australia (Defence) v O’Dea (1998) 87 FCR 451 at 455 .
[12] Harding v Commissioner of Taxation [2018] FCA 837 at [49] .
[13] Harding v Commissioner of Taxation [2018] FCA 837 at [43] and [45] .
[14] Harding v Commissioner of Taxation [2018] FCA 837 at [44] ; endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [61] .
[15] Harding v Commissioner of Taxation [2018] FCA 837 at [84] and [85] per Derrington J; endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [63] per Davies and Steward JJ.
[16] Gregory v Deputy Federal Commissioner of Taxation (W.A.) (1937) 57 CLR 774 at 777-778 per Dixon J; see also Handsley v Commissioner of Taxation [2019] AATA 917 at [8] for a summary of the relevant principles.
[17] Harding v Commissioner of Taxation [2018] FCA 837 at [46] (endorsed as correct in Harding v Commissioner of Taxation [2019] FCAFC 29 at [24] and [42]); Iyengar (2011) 85 ATR 924 , [2011] AATA 856 at [61]-[82] ; Sneddon v FCT (2012) 89 ATR 739 , [2012] AATA 516 at [45] .
[18] Harding v Commissioner of Taxation [2018] FCA 837 at [80] .
[19] Commissioner of Taxation v Miller (1946) 73 CLR 93 at 101 per Rich J.
[20] Harding v Commissioner of Taxation [2018] FCA 837 at [37]-[38] ; endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [24] ; referring to Koitaki Para Rubber Estates Ltd v FCT (1941) 64 CLR 241 at 249 (Williams J).
[21] Hafza v Director-General of Social Security (1985) FCR 444 at 449 ; Harding v Commissioner of Taxation [2018] FCA 837 at [33] ; endorsed on appeal in Harding v Commissioner of Taxation [2019] FCAFC 29 at [24] .
[22] Billington v Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs [2013] FCA 480 at [42] per Logan J.
[23] Summary as outlined in Arjunan and Commissioner of Taxation [2020] AATA 4024 at paragraph 20.
[24] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 117 per Franki J.
[25] Federal Commissioner of Taxation v Applegate (1979) 27 ALR 114 at 123 per Northrop J.
[26] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-14, paragraphs 2 and 4.
[27] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraphs 5-8.
[28] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 6.
[29] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 7.
[30] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 14, paragraph 8.
[31] Exhibit 1, T Documents, T41, pages 516-522, Letter from CB&I Construction Pty Ltd to the Applicant with Base Terms and Conditions contract.
[32] Exhibit 1, T Documents, T44, page 527, International Assignment to CB&I Eastern Anstalt, Dubai.
[33] Exhibit 1, T Documents, T44, pages 528-538, International Assignment to CB&I Eastern Anstalt, Dubai.
[34] Exhibit 2, Tribunal Book, TB1, Applicant’s Statement of Facts, Issues and Contentions, page 3, paragraph 10.
[35] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 14 and 16, paragraphs 9 and 24-25.
[36] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 16-18, paragraphs 32-34 and 41-48.
[37] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 17, paragraphs 35-38.
[38] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 17-18, paragraphs 41-49.
[39] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 17-18, paragraphs 39 and 50-51.
[40] Exhibit 1, T Documents, T52, page 560, UAE Dubai Residence Permit.
[41] Exhibit 1, T Documents, T53, page 561, UAE Dubai Residence Permit.
[42] Exhibit 1, T Documents, T54, page 562, UAE Dubai Residence Permit.
[43] Exhibit 1, T Documents, T58-59, pages 568-569, UAE Dubai Residence Permits.
[44] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, page 19, paragraph 62.
[45] Exhibit 1, T Documents, T45-T50, pages 527-558, Dubai Rental Contracts.
[46] Exhibit 1, T Documents, T107, page 660, DIAC Calculator for the Applicant.
[47] Noting that the Applicant departed Australia on 29 September 2015 to commence his international assignment in Dubai.
[48] Exhibit 1, T Documents, T108, page 661, DIAC Calculator for Mrs Quy.
[49] Noting that the Applicant departed Australia on 29 September 2015 to commence his international assignment in Dubai.
[50] Exhibit 2, Tribunal Book, TB3, page 15, Applicant’s Witness Statement, paragraph 16.
[51] Exhibit 1, T Documents, T3-T7, pages 17-232, Applicant’s tax returns for the 2016 to 2020 income years.
[52] Exhibit 1, T Documents, T12-T16, pages 405-414, Notice of assessments for the 2016 to 2020 income years.
[53] Exhibit 1, T Documents, T31-T35, pages 465-499, Objection forms for the 2016 to 2020 income years.
[54] Exhibit 1, T Documents, T36, pages 500, Email from Respondent to Applicant’s tax agent requesting further information and attaching the Residency Questionnaire, T42, page 523, Email from Respondent to Applicant’s tax agent requesting further information and T62, pages 576-577, Email from Respondent to Applicant’s tax agent requesting response to additional questions.
[55] Exhibit 1, T Documents, T37-T41, pages 501-522, Email from Applicant’s tax agent to Respondent regarding request for further information and the Residency Questionnaire with attachments; T43-61, pages 524-575, Emails from Applicant’s tax agent to Respondent regarding request for further information and attachments and T63-70, pages 578-615, Applicant’s tax agent to Respondent regarding request for further information and attachments.
[56] Exhibit 1, T Documents, T2, pages 7-16, Notice of Objection Decision and Reasons for Decision.
[57] Exhibit 1, T Documents, T17-T20, pages 415-430, Notice of amended assessments for the 2016 to 2019 income years.
[58] Exhibit 1, T Documents, T1, page 1-12, Application for Review of Decision.
[59] Exhibit 2, Tribunal Book, TB1, pages 1-5, Applicant’s Statement of Facts, Issues and Contentions.
[60] Exhibit 2, Tribunal Book, TB3, pages 13-20, Applicant’s Witness Statement.
[61] Exhibit 3, Witness Statement of Mrs Quy.
[62] Exhibit 2, Tribunal Book, TB2, pages 6-12, Respondent’s Statement of Facts, Issues and Contentions.
[63] Transcript, page 3.
[64] Exhibit 1, T Documents, T36, page 500, Email from Respondent to Applicant’s tax agent requesting further information and attaching the Residency Questionnaire.
[65] Exhibit 1, T Documents, T38, pages 502-509, ATO Residency Questionnaire dated 14 May 2021.
[66] Exhibit 1, T Documents, T38, pages 502-509, ATO Residency Questionnaire dated 14 May 2021.
[67] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-20.
[68] Exhibit 2, Tribunal Book, TB3, Applicant’s Witness Statement, pages 13-20.
[69] Transcript, pages 10-45.
[70] Exhibit 3, Witness Statement of Mrs Quy.
[71] Exhibit 3, Witness Statement of Mrs Quy.
[72] Transcript, pages 46-59.
[73] The Tribunal notes that this submission is inconsistent with the DIAC records as summarised in paragraph 47 above.
[74] The Tribunal notes that the Applicant had left Dubai to commence an assignment in Thailand in February 2021.
[75] The Tribunal notes that this paragraph and the two proceeding paragraphs directly contradict the Applicant’s responses to the Respondent’s Residency Questionnaire as outlined in paragraph 66 above.
[76] The Tribunal notes that this paragraph is contradictory to paragraph 36 of the Applicant’s Affidavit.
[77] The Tribunal notes that this paragraph is inconsistent with the evidence the Applicant gave at the Hearing as set out in paragraph 68 above and the DIAC records as summarised at paragraph 47 above.
[78] The Tribunal notes that this paragraph is inconsistent with the DIAC records summarised at paragraph 47 above and the expiry of Mrs Quy’s UAE residency permit.
[79] The Tribunal notes that this paragraph is inconsistent with the DIAC records summarised at paragraph 47 above and the expiry of Mrs Quy’s UAE residency permit.
[80] Applicant’s Closing Submissions, page 2, paragraph 4.
[81] Applicant’s Closing Submissions, page 2, paragraph 5.
[82] Applicant’s Closing Submissions, pages 10 to 22.
[83] Applicant’s Closing Submissions, page 10, paragraphs 40-42.
[84] Applicant’s Closing Submissions, pages 14-16, paragraph 58.
[85] Applicant’s Closing Submissions, pages 16-21, paragraph 65.
[86] Applicant’s Closing Submissions, pages 21-22, paragraph 75.
[87] Applicant’s Closing Submissions, page 25, paragraphs 95-97.
[88] Applicant’s Closing Submissions, pages 26-27, paragraph 105.
[89] Applicant’s Closing Submissions, pages 28-29, paragraphs 107-112.
[90] Respondent’s Closing Submissions, paragraph 8.
[91] Respondent’s Closing Submissions, paragraph 47.
[92] Respondent’s Closing Submissions, paragraph 30.
[93] Harding v Commissioner of Taxation [2018] FCA 837 at [84] ; endorsed as correct in Harding v Commissioner of Taxation [2019] FCAFC 29 at [24] .
[94] Pike v Commissioner of Taxation [2019] FCA 2185 at [60] , confirmed on appeal in Pike v Commissioner of Taxation [2020] FCAFC 158 .
[95] Respondent’s Closing Submissions, paragraphs 54-63.
[96] Transcript at pages 36 and 45.
[97] Exhibit 1, T Documents, T38, page 503, ATO Residency Questionnaire and Transcript at page 26.
[98] Exhibit 1, T Documents, T115, page 673, Email from WA Department of Transport to the Respondent regarding request for Drivers Licence and Car Registration information and Transcript at pages 36-37.
[99] Exhibit 1, T Documents, T108, 661, DIAC Calculator for Mrs Quy and Transcript at pages 34-36.
[100] Transcript at pages 53-57.
[101] Exhibit 1, T Documents, T90, 635, Incoming Passenger Card; T92, page 637, Incoming Passenger Card and T95, page 640, Incoming Passenger Card.
[102] Exhibit 1, T Documents, T44, pages 528-538, International Assignment to CB&I Eastern Anstalt, Dubai.
[103] Transcript at pages 18 and 23.
[104] Exhibit 1, T Documents, T38, page 504, ATO Residency Questionnaire.
[105] Exhibit 1, T Documents, T38, page 502, ATO Residency Questionnaire.
[106] Transcript at page 27.
[107] Exhibit 1, T Documents, T8, page 242, Amended Tax return for the 2016 income year; T9, page 284, Amended Tax return for the 2017 income year; T10, page 326, Amended Tax Return for the 2018 income year; T11, page 369, Amended Tax return for the 2019 income year; T21-T26, pages 431-449, Notices regarding the Applicant’s excess concessional contributions assessments and T38, page 506, ATO Residency Questionnaire.
[108] Respondent’s Closing Submissions, paragraph 64.
[109] Respondent’s Closing Submissions, paragraph 65.
[110] Respondent’s Closing Submissions, paragraph 66.
[111] Respondent’s Closing Submissions, paragraphs 68-73.
[112] Exhibit 1, T Documents, T45-T50, pages 539-555, Dubai Rental Contracts.
[113] Exhibit 1, T Documents, T56-T57, pages 564-567, HSBC Account Statements and Transcript at pages 30-32 and 41.
[114] Exhibit 1, T Documents, T65, page 582, Al Fal Real Estate Letter to Allow Furniture Removal on 23 February 2021 and 6 images.
[115] Exhibit 1, T Documents, T66, page 589, Elegant Line Logistics Removalist log of items and destination checklist dated 23 February 2021 and Transcript at page 29.
[116] Exhibit 1, T Documents, T38, page 504, ATO Residency Questionnaire.
[117] Transcript at pages 39-40.
[118] Respondent’s Closing Submissions, paragraph 74.
[119] Applicant’s Affidavit paragraph 3. The Tribunal notes that Mrs Quy’s Affidavit provides an identical description of her living arrangements.
[120] Appendix 2 – Parliament of Australia (aph.gov.au)
[121] Appendix 2 – Parliament of Australia (aph.gov.au)
[122] As provided in paragraph 80 above.

 

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