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Edited version of your written advice
Authorisation Number: 1012991880283
Date of advice: 31 March 2016
Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for taxation purposes?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2015
The scheme commenced on:
1 July 2014
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
Country A is your country of origin and you are a country A citizen.
You arrived in Australia on a short term visa.
The visa does not allow you to stay permanently.
Your initial intention was to work and travel.
You then applied for a longer term visa and later extended that visa.
You obtained full-time employment a year later.
You live in a rental property with your partner in Australia.
In Australia you have a bank account and a car.
In country A, you have a bank account.
You lived in two different suburbs in country A in the 5 years prior to your arrival in Australia.
You lived in a rental property in country a prior to moving to Australia.
You do not have a permanent place to live in country A.
You have returned to country A on several occasions to visit family and friends and to go on vacation.
You do not have a job being held for you in country A.
You are actively involved in the community in Australia and have a group of friends that you socialise often with.
You contribute to a super fund in Australia.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Subsection 995-1(1).
Income Tax Assessment Act 1936 Subsection 6(1).
Reasons for decision
Section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where you are a resident of Australia for taxation purposes, your assessable income includes income gained from all sources, whether in or out of Australia. However, where you are a foreign resident, your assessable income includes only income derived from an Australian source.
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.
The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are the:
• resides test
• domicile and permanent place of abode test
• 183 day test and
• Commonwealth superannuation fund test.
The primary test for deciding the residency status of each individual is whether they reside 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.
The resides (ordinary concepts) test
The outcomes of several Administrative Appeals Tribunal (AAT) cases have determined that the word 'resides' should be given the widest meaning and there have been a number of factors identified which can assist in determining if a particular taxpayer is a resident of Australia under this test.
Recent case law decisions have considered the following factors in relation to whether the taxpayer was a resident under the 'resides' test:
(i) Physical presence in Australia
(ii) Nationality
(iii) History of residence and movements
(iv) Habits and "mode of life"
(v) Frequency, regularity and duration of visits to Australia
(vi) Purpose of visits to or absences from Australia
(vii) Family and business ties to different countries
(viii) Maintenance of place of abode.
These factors are similar to those which the Commissioner has said are relevant in determining the residency status of individuals in Taxation Ruling IT 2650 Income Tax: residency - permanent place of abode outside Australia and Taxation Ruling TR 98/17 Income tax: residency status of individuals entering Australia.
It is important to note that not one single factor is decisive and the weight given to each factor depends on individual circumstances.
You arrived in Australia on a short term visa but later received a longer term visa which was extended.
You obtained full-time employment a year later.
You live in a rental property with your partner in Australia.
You contribute to a super fund and have a car and bank account in Australia.
You do not have a place to live or a job being held for you in the country A.
Based on the facts above you are residing in Australia according to ordinary concepts.
You are a resident under this test.
Your residency status
You are a resident of Australia for taxation purposes.