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Ruling
Subject: residency
Question and answer
Are you a resident of Australia for taxation purposes?
Yes.
This ruling applies for the following periods:
Year ending 30 June 2013
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You were born overseas and are a citizen of the overseas country.
You came to Australia with your spouse for work purposes.
You have a 457 four year long term business visa.
You have kept your job overseas and work remotely from your home in Australia.
Your spouse has an employment contract in Australia.
You intend to be in Australia for a number of years.
You have been living in the same accommodation since arriving in Australia.
You do not have a home in the overseas country.
The Commonwealth super test does not apply to you or your spouse.
Relevant legislative provisions:
Income Tax Assessment Act 1936 Subsection 6(1)
Income tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Subsection 995-1(1)
Reasons for decision
Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines an Australian resident as a person who is a resident of Australia for the purpose 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:
1. the resides test
2. the domicile test
3. the 183 day test
4. 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. However, where an individual does not reside in Australia according to ordinary concepts, they may still be considered to be an Australian resident for tax purposes if they satisfy the conditions of one of the three 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'.
When an individual arrives in Australia not intending to reside here permanently all the facts about his or hers presence must be considered in determining residency status.
The period of physical presence or length of time In Australia is not by its self decisive when determining whether an individual resides here period.
An individual's behaviour over the time spent in Australia may reflect a degree of continuity, routine or habit that is consistent with residing here.
Whether a considerable time has elapsed to demonstrate that the individual's behaviour has the required continuity, routine or habit is a question of fact; that is, it depends on the circumstances of each case. The Commissioner's view of the law is that six months is a considerable time when deciding whether the individual's behaviour is consistent with residing here.
In your case you have come to Australia with your spouse who has a work contract in Australia.
You are intending on being in Australia for a number of years.
You work remotely for a company based overseas.
You have lived in the same accommodation since arriving in Australia. The Commissioner is satisfied that your behaviour while in Australia is consistent with that of someone residing in Australia according to ordinary concepts.
You are a resident under this test.
As you meet the resides test it is not necessary to look at the domicile, 183 and superannuation tests.
Your residency status
You are a resident of Australia for taxation purposes.
You are required to declare all your income both in and outside Australia in an Australian tax return.