| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012011810203
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Residence
Questions and answers:
Are you a resident of Australia for tax purposes?
Yes
This ruling applies for the following period:
Period ending 30 June 2014
Period ending 30 June 2013
Period ending 30 June 2012
Period ended 30 June 2011
The scheme commenced on:
1 July 2010
Relevant facts and circumstances
You are no a citizen of Australia
In 2011 you arrived in Australia
You have a 457 Temporary Resident visa 5 year visa
The purpose of your stay in Australia is to fulfil an employment contract.
You have no plans to leave Australia prior to 20XX due to your employment contract.
You have left Australia on a number of occasions since arriving in Australia.
All but one occasion where business trips of less than one week. The other was about 10 days for a vacation.
You have leased a dwelling for the duration of your stay.
Your assets in Australia include a daily banking account and motor vehicle.
You jointly own a home in your home country which is currently unoccupied.
Your assets in your home country include your home, bank account and retirement savings.
You currently pay tax in your home country on preserved Superannuation type assets.
You are accompanied in Australia by your family.
In Australia you have a circle of friends.
You are a member of a sporting club.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
The terms 'resident' and 'resident of Australia', in regard to an individual, are defined in subsection 6(1) of the Income Tax Assessment Act 1936 (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, and
§ the superannuation test.
The first two tests are examined in detail in Taxation Ruling IT 2650.
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 tax 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'.
Although the question of whether a person resides in a particular country is a question of fact, the courts have referred to and taken into account various factors considered to be relevant. These are:
§ whether the person is physically present in that country at some time during the year of income
§ the history of the person's residence and movements
§ if the person is a visitor to the country, the frequency, regularity, duration and purpose of the visits
§ if the person is outside the country for part of the relevant income year, the purpose of the absences
§ the family and business ties which the person has with the particular country, and
§ whether a place of abode is maintained by the person in the relevant country or is available for his or her use while there.
You maintained an ongoing presence in Australia during the financial year.
Your history of movements does not indicate a shifting of residence. You left Australia on a number of occasions since arriving in Australia, mostly on short stay business trips and one time to vacation.
You moved to Australia with your spouse and children.
Your home in your country has been left vacant.
The Commissioner's interpretation of your circumstances can be drawn from Taxation Ruling TR 98/17 (Income Tax: residency status of individuals entering Australia). In paragraph 44, the Commissioner states:
Many individuals work in a number of countries during their careers. They often maintain a house in their country of domicile. However, for the period of their assignment in Australia, they live and work here. Their family often accompany them, their children attend school here and they may become involved in social activities while present in Australia.
Although these individuals regard themselves as permanently resident in their home country and/or may be regarded as resident of their home country for its tax purposes, their behaviour while temporarily in Australia may mean they are also residing here for Australia income tax purposes.
We consider you have a settled purpose of supporting your employment here, this shows an intent to reside in Australia and shows that your stay is consistent with living in Australia [Miesagaes v. Commissioners of Inland Revenue (1957) 37 TC 493].
You have carried your family ties with you to Australia as you are dwelling here for a considerable time whilst fulfilling employment contract [Reid v. The Commissioners of Inland Revenue (1927) 10 TC 673].
Despite maintaining a home outside of Australia, your assets in Australia include a car and bank account which shows established behaviour with residing here [The Commissioners of Inland Revenue v F L Brown (1926)].
Your social and living arrangements during your stay in Australia include sport's club participation, and committing to a residential lease. Your social and living arrangements give much more attention to Australia than your home country due to the kind of social and living arrangement decisions that you have made here [Gregory v Deputy Commissioner of Taxation (WA) CLR 778; ATD 399]
The facts and circumstances that describe your behaviour whilst present in Australia show you to be a resident of Australia.
As you are a resident under this test, it is not necessary to determine whether you meet the requirements of the other three tests of residency.
Your residency status
As you meet the resides test, you are a resident of Australia for tax purposes.