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Edited version of your written advice
Authorisation Number: 1051218179235
Date of advice: 8 May 2017
Ruling
Subject: Residency
Question and answer
Are you a resident of Australia for taxation purposes?
No.
This ruling applies for the following periods:
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
The scheme commenced on:
1 July 2012
Relevant facts and circumstances
You are a citizen of Australia and Australia is your country of origin.
You are employed by a foreign company.
You began residing in country A with your spouse from #.
You married your spouse on #.
You and your spouse purchased a home in country A in #, you still own and live in this home.
Your spouse is of country A descent.
You and your spouse had a child in country A in #.
You do not have a place to live in Australia.
You have relatives who reside in Australia but no dependants.
You gave away your household effects in Australia.
You are employed on a # days on /# days off roster.
You enter country A on a visa that is valid for 180 days which allows you to reside in country A with your family after each work assignment.
You do not have plans to return to Australia to live.
Your assets in Australia include two bank accounts.
Your assets in country A include the family home and a bank account.
You have returned to Australia on the following occasions:
2013: less than 15 days
2014: less than 15 days
2015: less than 15 days
2016: less than 15 days
You have advised Medicare, financial institutions and (you believe) the Electoral Office that you are a foreign resident.
You and your spouse are not eligible to contribute to the relevant Commonwealth super fund.
Relevant legislative provisions:
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 subsection 995-1(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 IT 2650 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 began residing in country A with your spouse from #.
You married your spouse on #.
You and your spouse purchased a home in country A in #, you still own and live in this home.
Your spouse is of country A descent.
You and your spouse had a child in country A in #.
You are employed on a # days on /# days off roster.
You enter country A on a visa which is valid for 180 days which allows you to reside in country A with your family after each work assignment.
You do not have plans to return to Australia to live.
You were/are not residing in Australia according to ordinary concepts due to your ongoing employment, living arrangements and intention to remain living and working overseas.
The domicile test
If a person’s domicile is Australia they will be considered an Australian resident unless the Commissioner is satisfied they have a permanent place of abode outside of Australia.
In order to show that a new domicile of choice in a country outside Australia has been adopted, the person must be able to prove an intention to make his or her home indefinitely in that country.
The expression 'place of abode' refers to a person's residence, where they live with their family and sleep at night. In essence, a person's place of abode is that person's dwelling place or the physical surroundings in which a person lives.
A permanent place of abode does not have to be 'everlasting' or 'forever'. It does not mean an abode in which a person intends to live for the rest of his or her life. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a permanent place of abode elsewhere.
Your domicile of origin is the Australia. Your domicile of choice was/is country A.
The Commissioner is satisfied that you had/have a permanent place of abode outside Australia for the following reasons:
You have purchased a family home in country A.
Your spouse and child reside in country A.
You do not have a home to return to in Australia.
You gave away all your personal effects in Australia.
You do not have plans to return to Australia to live.
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 not and do not intend to be in Australia for more than 183 days in any of the applicable financial years.
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 and your spouse are not eligible to contribute to the relevant Commonwealth super fund.
You are not a resident under this test.