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Edited version of private ruling
Authorisation Number: 1011655501108
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Ruling
Subject: Residency - working in Australia
Are you an Australian resident for taxation purposes?
Yes.
This ruling applies for the following period:
Year ended 30 June 2010
The scheme commences on:
1 July 2009
Relevant facts and circumstances
You are a citizen of country X.
You arrived in Australia.
You are currently on a work sponsorship visa valid for four years.
You employment contract is an open end contract.
Your intentions are to reside in Australia permanently.
While in Australia, you reside in a rented accommodation.
You have a bank account and superannuation account in Australia.
You have a bank account and a house in country X. This house is being rented out while you are in Australia.
You do not have a spouse or dependant children.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1)
Income Tax Assessment Act 1997 Section 995-1
Reasons for decision
An Australian resident is defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to be 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', in regard to an individual, are defined in subsection 6(1) of the ITAA 1936. The definition provides four tests to ascertain whether a taxpayer is a resident of Australia for income tax purposes. These tests are:
· the resides test
· the domicile test
· the 183 day test
· the superannuation test.
The primary test for deciding the residency status of an individual is whether the individual resides in Australia according to the ordinary meaning of the word resides. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be a resident of Australia for taxation purposes if they meet the conditions of one of the other three tests.
The resides test
The ordinary meaning of the word 'reside', according to the Macquarie Dictionary, 2001, rev.3rd edition, The Macquarie Library Pty Ltd, NSW, is 'to dwell permanently or for a considerable time; having one's abode for a time', and according to the Compact Edition of the Oxford English Dictionary (1987), is 'to dwell permanently, or for a considerable time, to have one's settled or usual abode, to live in or at a particular place'.
As you have lived in Australia, you are considered to be residing in Australia.
The domicile test
If a person is considered to have their domicile in Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.
The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.
A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.
In your case, you have advised that you intend to live in Australia permanently. Therefore, you are considered to have established a permanent place of abode in Australia.
The 183 day test
Where a person is present in Australia for 183 days during the year of income the person will be a resident, unless the Commissioner is satisfied that the person usual place of abode is outside Australia and the person does not intend to take up residence in Australia.
For the 2009-10 income year, you were present in Australia for more than 183 days. However, as you are a resident of Australia under the resides test for this period, the 183 day test is not considered.
The superannuation test
You are considered to be a resident of Australia for taxation purposes if you are a member of a Commonwealth superannuation fund. As you are not a citizen of Australia, you will not have worked for the Australian government. It is therefore not necessary to consider the superannuation test.
Your resident status
In view of the above information you are considered to be an Australian resident for taxation purposes from the date of your arrival in Australia under subsection 995-1(1) of the ITAA 1997.