Edited version of your written advice

Authorisation Number: 1012809195026

Ruling

Subject: Residency

Question and answer:

Were you a resident of Australia for income tax purposes?

No.

This ruling applies for the following periods:

Year ending 30 June 200X

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

The scheme has commenced

Relevant facts and circumstances

You were born in Australia and are a citizen of Australia.

You are single with no dependants.

The only assets that you owned in Australia and overseas were bank accounts.

You were selected by your employer to work in their overseas operations.

The income that you derived from your overseas employment was transferred to your Australian bank account.

Country X

As a result of being selected by your employer to undertake overseas opportunities, you left Australia to live and work in country X.

You entered country X on a working visa supplied by your employer.

Whilst employed in country X you lived in employer provided accommodation.

The accommodations were long term lease arrangements.

You purchased household furnishings and electrical items (bed, mattress table, chairs, television etc.).

Your social and sporting ties in country X included playing sport and socialising with friends and expatriates. You also joined a local sporting club.

In order to integrate into country X culture you learnt to speak the local language.

While employed in country X you returned to Australia for short periods, 2-3 times per year to visit family.

At the conclusion of your country X work assignment you returned to Australia for a short period.

Country Y

After a short period in Australia you moved on to a new employment assignment with the same employer in the country Y.

You left Australia to live and work in country Y.

You entered country Y on a tourist visa that was supplied by your employer. The reason that you were issued with a tourist visa at first was due to the lack of organisation by your employer.

It was your intention to obtain a more permanent residency status.

Whilst employed country Y you lived in employer subsidised accommodation whereby you held the lease.

You changed your accommodation every year in search of better lodgings and landlords.

You purchased household furnishings and electrical items (bed, mattress table, chairs, television etc.).

You were involved in a personal relationship with a country Y national.

Your social and sporting ties in country Y included playing competition sports and forging strong personal ties with expatriates. You also had a relative who lived in city T whom you associated with quite often.

While employed in the country Y you returned to Australia for short periods, 2 - 3 times per year to visit family.

You returned to Australia after living and working in country Y for a number of years.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 995-1

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

Residency

Section 995-1 of the Income tax Assessment Act 1997 (ITAA 1997) defines an Australian resident for tax purposes as 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. The tests are:

• the resides test,

• the domicile (and permanent place of abode) test,

• the 183 day test, and

• the superannuation test.

The first two tests are examined in detail in TAXATION RULING NO. IT 2650 INCOME TAX: Residency - Permanent Place Of Abode Outside Australia.

The latter two tests are relatively self-explanatory as they require the individual to either be physically present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes.

An individual need only satisfy the conditions of one of the four tests to be deemed a resident of Australia for income tax purposes.

The resides test

The resides test considers whether an individual is residing in Australia according to the ordinary meaning of the word 'reside'. As the word 'reside' is not defined in Australian taxation law, it takes its ordinary meaning for the purposes of subsection 6(1) of the ITAA 1936.

In Dempsey and Commissioner of Taxation [2014] AATA 335 (29 May 2014) the Administrative Appeals Tribunal noted that the settled position of the courts (at ultimate appellant level) as to the meaning of the word resides in the ITAA 1936 is that the word:

bears its ordinary English meaning, which 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".

Based on the facts of your case, the Commissioner accepts that you were not residing in Australia according to the ordinary meaning of the word in the relevant income years.

The domicile test

Under this test, a person whose domicile is in Australia will be considered a resident of Australia for taxation purposes, unless the Commissioner is satisfied the person's permanent place of abode is outside Australia.

In your case your domicile of origin is Australia and from the information you have provided you do not become a citizen or permanent resident of either country X or country Y. Therefore your Australian domicile will remain unchanged.

Although it has been determined that your Australian domicile remained unchanged, the Commissioner is satisfied that based on the facts that you have provided that you established a permanent place of abode in both country X and country Y.

Therefore you were not a resident of Australia for income tax purposes under this test for the relevant income years.

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 not physically present in Australia for a period of greater than 183 days in the relevant income years. Therefore you were not a resident of Australia for income tax purposes under the 183 day test.

The Superannuation test

An individual is considered to be a resident if that person is eligible to contribute to the Public Service Superannuation Scheme (PSS) or the Commonwealth Service Superannuation Scheme (CSS), or 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.

You have never been a member of a CSS or PSS.

Accordingly, you are not a resident under this test.

Your residency status

As you will not be a resident of Australia under any of the tests of residency outlined in subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997, you were not an Australian resident for taxation purposes for the relevant income years.