Edited version of private ruling

Authorisation Number: 1011774079981

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Ruling

Subject: Residency - working overseas

Question

Are you an Australian resident for taxation purposes while working overseas?

Answer

No

This ruling applies for the following periods:

Year ended 30 June 2007

Year ended 30 June 2008

Year ended 30 June 2009

The scheme commences on:

1 July 2006

Relevant facts and circumstances

You are a citizen of Australia.

You quit your job in Australia and travelled to country X.

You commenced employment in country X.

Your employment period with your country X employer was for X years.

You were initially on a working holiday visa, however you were able to apply for a working permit, which you did.

During your time in country X you rented the same property for the entire period.

You opened a bank account in country X and subsequently closed your Australian bank account.

Prior to leaving Australia you were living in a rental property. You did not own a property in Australia.

While working in country X, you returned to Australia on a few occasion for holiday and to visit friends and relative.

You do not have any dependant.

You intended to stay in country X indefinitely and were planning to apply for residency. However, by the middle of 200X the economic situation had changed significantly in country X, you were force to take a pay cut and your working conditions deteriorated, this coincided with some issues with your family in Australia. At this point you made the decision to leave country X and return to Australia.

You are not a member of the Commonwealth Government of Australia.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Reason for decision

The terms 'resident' and 'resident of Australia' are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA1936). The definition provides a series of tests to ascertain whether a person is a resident of Australia. These tests are:

· the resides test

· the domicile test

· the 183 day test

· the superannuation test.

Two of the tests that are relevant to your circumstance depend on whether or not you could be considered to be residing permanently or for a considerable period of time in country X, such that it is your settled or usual place of abode.

You have lived and worked in country X and intended to remain working there indefinitely. Although you maintain an association with Australia through your relative and friends, your associations with country X are more significant as you will be residing and working full time there. Therefore, the Commissioner considers that you have established a permanent or long-term residence outside of Australia.

The other residency test that is potentially relevant to your circumstances involves membership of a superannuation scheme set up for employees of the Commonwealth. As you are not members of such a scheme, however, this test will not apply.

In view of the above, it has been concluded that you will not be a resident of Australia for taxation purposes while working overseas.