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Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for tax purposes?
No
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You are a citizen of Country X.
You work on a casual contract working a six week on and three week off roster.
You work in Australia and Country X and Country Y.
You do not have a residence in Australia. You live in temporary accommodation provided by your employer such as hotels and motels.
You worked in Australia for more than 183 days in the year ended 30 June 2011.
When you are not working you stay with family and friends in Country X.
You may consider a permanent residence in Australia in the future when you secure a fixed base for your work.
You do not have a spouse.
You have never been an employee of the Commonwealth of Australia.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
An Australian resident for tax purposes 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:
o the resides test,
o the domicile test,
o the 183 day test, and
o 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. If the primary test is satisfied the remaining three tests do not need to be considered as residency for Australian tax purposes has been established.
Where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident if they meet the conditions of one of the other 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 live in hotels and motel accommodation provided by your employer you are living in temporary accommodation and do not have an actual place to live in Australia, you are not residing in Australia.
As you do not meet the resides test, we will need to consider whether you meet any of the other three tests of residency.
The domicile test
Under this test, a person is a resident of Australia for tax purposes if their domicile is in Australia, unless the Commissioner is satisfied that their permanent place of abode is outside of Australia.
Domicile
Domicile is the place that is considered by law to be your permanent home. It is usually something more than a place of residence.
Your domicile is not in Australia because you are a citizen of country X, your country of origin is X and you have not made your home indefinitely in Australia.
183 day test
There may be situations where an individual does not reside in Australia during a particular year but is present in Australia for more than one-half of the income year (perhaps intermittently) and intends to take up residence in Australia.
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 persons usual place of abode is outside Australia and the person does not intend to take up residence in Australia.
Although you were physically present in Australia for more than 183 days in the income year, as discussed above, the Commissioner is satisfied that you do not have a usual place of abode in Australia and you do not intend to take up residence in Australia at this time.
Therefore, you are not a resident of Australia under this test.
The superannuation test
An individual is still considered to be a resident of Australia if that person is eligible to contribute to the Public Service Scheme (PSS) of the Commonwealth Service Superannuation Scheme (CSS), or if that person is the spouse or child under 16 of such a person. Generally Commonwealth Government employees are eligible to contribute to the PSS or CSS.
As you have never been an employee of the Commonwealth of Australia and therefore do not meet the above conditions you are not a resident under this test.
Conclusion
As you do not meet any of the above tests, you are not a resident of Australia for tax purposes.
Other information
As a non-resident of Australia, you do not have to pay the Medicare levy.