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Edited version of your written advice
Authorisation Number: 1051362749545
Date of advice: 19 April 2018
Ruling
Subject: Residency – Departing Australia
Question
Are you an Australian resident for tax purposes?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You were born in Australia and are an Australian citizen.
In the year the scheme started you began new employment with a global company. The nature of your employment allowed you to work overseas and your employer would sponsor your working visa permits. The visa required for working rights in each country would be renewed every two years.
During the relevant income year you departed Australia bound for country 1 however your working permit was taking longer than expected to be approved so you were posted to country 2. You intended to stay there temporarily for six-eight weeks until you could permanently locate to country 1 which was your original destination.
Your employer provided you with the exclusive use of a private residence in country 2.
Your visa was approved during the next income year and you then arrived and resided in country 1. Your accommodation was a rented house under a two year rental agreement.
You continued to work in country 2 at times and travelled between both countries. Your employment contract had the potential to be extended in two year increments.
After a further period of time you were posted onto a new project with the same employer and you moved to country 3, in an indefinite ongoing role. Your accommodation was a rented apartment and you resided there until you permanent departure and return to Australia.
While residing overseas you also visited many other countries around the world for holidays. This included trips back to Australia for special events but not with any regular repetition.
You do not make any further investments in Australia while you resided overseas. Prior to your departure and due to a relationship breakdown, your family home was acquired by your former partner as part of the settlement process. While overseas you acquired assets such as a motor vehicle, foreign bank accounts, household and personal effects.
While residing overseas in both country 1 and country 3, you lodged income tax returns in those countries as a foreigner on a working permit.
When you left Australia you did not know if or when you may return. You knew you could only work in two year increments overseas however you were fairly confident your contract would be extended, which it was.
During the relevant periods you adopted a permanent place of abode outside Australia.
You have never been employed by the Commonwealth Government of Australia. You are not a member of the superannuation scheme established under the Superannuation Act 1990, or an ‘eligible employee’ for the purposes of the Superannuation Act 1976.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1936 Subsection 6(1)
Reasons for decision
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.
Based on the facts you have provided, we can conclude that you will not satisfy any of the tests of residency.
Accordingly you are not a resident of Australia for income tax purposes under section 995-1(1) of the ITAA 1997 and subsection 6(1) of the ITAA 1936.