Edited version of your written advice

Authorisation Number: 1012990481959

Date of advice: 13 April 2016

Ruling

Subject: International Residency

Questions and answers:

Are you a resident of Australia for taxation purposes?

Yes

Is your income assessable in Australia?

No

This ruling applies for the following periods:

Year ending 30 June 2016

Year ending 30 June 2017

Year ending 30 June 2018

Year ending 30 June 2019

The scheme commences on:

1 July 2015

Relevant facts and circumstances

You are an Australian Citizen.

You have no spouse or children.

You departed Australia for Country X in the year ending 2016 to take up employment.

You are a resident of Country X for taxation purposes.

You only have a home available in Country X.

Before departing Australia and taking up employment in Country X you were employed by the Australian Government. They have granted you leave without pay whilst you are overseas.

You are a member of the Public Service Superannuation Scheme (PSS) but are ineligible to contribute as you are on leave without pay.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 995-1(1)

Income Tax Assessment Act 1936 Subsection 6(1)

Reasons for decision

Summary:

You will be an Australian resident for tax purposes under the superannuation test. You will not be assessable on your foreign source income.

Question 1: Residency Status.

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 test,

• the 183 day test, and

• the superannuation test.

If any one of these tests is met, an individual will be a resident of Australia for taxation purposes.

Given the facts only the superannuation test needs to be considered to determine if you are a resident.

The superannuation test says that 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.

• You are an employee of a Government Organisation.

• You have been granted leave without pay for a three year period.

• You are a member of the Public Service Superannuation Scheme (PSS).

• You cannot contribute to this scheme due to your period of unpaid leave.

Even though you are not eligible to contribute to the scheme you meet the requirement of the superannuation test for residency as you are an eligible member of the PSS. The case of Baker v Commissioner of Taxation [2012] AATA 168 confirmed that a PSS member on leave without pay will still meet the requirements of the superannuation test as they still are an eligible employee of the public service.

Therefore, you are a resident of Australia for income tax purposes under the superannuation test.

Question 2: Taxation of your income.

You are a resident of both Australia and Country X the Double Taxation Agreement between the two countries gives the right to taxing this income to Country X.