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Edited version of your private ruling
Authorisation Number: 1012544354423
Ruling
Subject: Residency
Question and answer
Were you a resident of Australia for taxation purposes for the period you were working in Australia?
No.
This ruling applies for the following periods:
Year ended 30 June 2013
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You were born in Country Y.
You are a citizen of Country Y.
You came to Australia for work purposes for a number of months.
You had a temporary work visa 457.
You intend on applying for permanent residency of Australia in the future if you obtain further work in Australia.
You left Australia because your work contract ended.
Your employer provided your accommodation while you were working in Australia.
You have a home and family in Country Y.
Your family did not accompany you to Australia.
You do not have any assets in Australia other than a bank account which was opened so your wage could be deposited into it.
You made one short trip back to Country Y while you were in Australia.
You left Australia permanently.
Neither you nor your spouse are currently or have ever been Commonwealth Government employees.
You are over 16 years of age.
Relevant legislative provisions:
Income Tax Assessment Act 1936 Subsection 6(1)
Income Tax Assessment Act 1997 Subsection 995-1(1)
Reasons for decision
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
· 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 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'.
Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia considers the residency status of individuals entering Australia and states that the period of physical presence or length of time in Australia is not, by itself, decisive when determining whether an individual resides here. However, 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.
The following factors are useful in determining whether your behaviour over the time spent in Australia reflects a degree of continuity, routine or habit that is consistent with residing here:
(a) intention or purpose of presence;
(b) family and business/employment ties;
(c) maintenance and location of assets; and
(d) social and living arrangements
You came to Australia on a 457 visa for work purposes for a number of months.
You have a home and family in Country Y. Your family did not accompany you to Australia.
You do not have any assets in Australia (other than a bank account).
You lived in employer provided accommodation while in Australia.
You returned to Country Y for a short time during your stay in Australia.
You left Australia permanently.
You were not residing in Australia according to ordinary concepts for the period due to the temporary nature of your time in Australia.
The domicile test
If a person has their domicile in Australia they will be an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
Your domicile of origin is Country Y. You had no intention of making Australia your permanent home and changing your domicile. Therefore your domicile is not Australia and you are not a resident under this test.
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's usual place of abode is outside Australia and the person does not intend to take up residence in Australia.
You were in Australia for more than 183 days, however, your usual place of abode was in Country Y and you did not intend on taking up residence in Australia.
You are not a resident under this test.
The superannuation test
An individual is still considered to be a resident if that person is eligible to contribute to the PSS or the CSS, or that person is the spouse or child under 16 of such a person. To be eligible to contribute to those schemes, you must be or have been a Commonwealth Government employee.
You or your spouse have never been Commonwealth Government employees, and you are over 16 years of age.
You are not a resident under this test.
Your residency status
You were not a resident of Australia for taxation purposes for the period you were in Australia for work purposes.