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Edited version of your written advice
Authorisation Number: 1051214005649
Date of Advice: 18 April 2017
Ruling
Subject: Your residency status
Question and answer:
Are you a resident of Australia for income tax purposes?
Yes.
This ruling applies for the following periods:
Year ended 30 June 2016
The scheme commences on:
1 July 2015
Relevant facts and circumstances
You were born in Country T and are a citizen of Country Y.
You are single with no dependants.
You entered Australia on a working visa.
The purpose of entry into Australia was for work purposes.
From the time of your arrival you have been employed in the health service industry.
Since your arrival you have stayed at the following accommodations in a number of accommodations for varied periods.
From the time of your arrival, you left Australia on a number of occasions for short periods.
On all of these occasions the purpose of your departure was for person/holiday reasons.
Prior to your arrival you had visited Australia on one occasion for a short period to catch up with friends.
Since your arrival you have not lodged any foreign income tax returns.
Prior to your arrival in Australia you stayed in hospital accommodation where you were employed.
You do not have any Australian or overseas social or sporting ties.
Your assets in Australia consist of a motor vehicle and bank account.
You do not have any assets overseas.
You have never been employed by the Commonwealth Government of Australia.
You intention is to remain in Australia indefinitely
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 6(1)
Income Tax Assessment Act 1997 Section 995-1
Reasons for decision
Section 995-1 of the 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 physical present in Australia for a period greater than 183 days or be eligible to contribute to the PSS or CSS superannuation schemes.
If any one of these tests is met, an individual will be a resident of Australia for taxation 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.
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, discusses the Commissioners view on the application of the 'resides' test when determining an individual's residency status.
Paragraph 18 of Tax Ruling TR 98/17 provides;
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.
As a broad principle, where a person has a settled routine for six months or more (for example, the person has stayed in one place or has been with one employer for six months at the same location) they may satisfy the 'resides' test.
In your case, you arrived in Australia to live and work in Australia. Since your arrival you have gained employment and lived in various accommodations under differing rental agreements. In the year relating to this ruling you have only been absent from Australia on a limited number of occasions for short periods. In light of the above factors, the Commissioner is satisfied that this behaviour reflects a degree of continuity, routine or habit that is consistent with residing here. Therefore you are a resident of Australia for income tax purposes under the 'resides test'.
As it has been determined that you are a resident under the 'resides test' there is no need to consider the remaining 3 tests.
Your residency status
Accordingly, you are a resident of Australia for income tax purposes under subsection 6(1) of the ITAA 1936 and subsection 995-1(1) of the ITAA 1997.