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Edited version of your written advice
Authorisation Number: 1051442262961
Date of advice: 17 October 2018
Ruling
Subject: Residency
Question
Are you an Australian resident for taxation purposes?
Answer
No
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You were born in Australia.
You are a dual citizen.
You went to the Country A to work in September 20XX.
You were entitled to live and work in the Country A because of your citizenship.
You returned to Australia briefly in March 20XX.
You returned to Australia permanently in March 20XX.
You leased fully furnished accommodation in the Country A.
You worked within the same industry whilst you were in the Country A.
You did not go overseas with any relatives.
You did not have any Australian sourced income.
You have a HECS debt.
You are not eligible to contribute to the PSS or the CSS Commonwealth superannuation funds.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 995-14(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.
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 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 for the period you are working in the Country A. Your income derived in the Country A is not assessable in Australia.
Please note:
Changes have been made to the Higher Education Loan Program (HELP) requirements.
I refer you to the ato.gov.au webpage HELP and TSL overseas obligations for more information on this topic.