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Edited version of private advice
Authorisation Number: 1051616227894
Date of advice: 13 December 2019
Ruling
Subject: Foreign sourced income
Question
1. Are the wages and salary income earned while working in another country for an Australian company foreign sourced?
2. Are you a resident of Australia for income tax purposes while you were working overseas?
Answer
1. Yes - Even though the company who employs you is a resident of Australia, because the work was done in another country, it is classed as foreign income in Australia as per ITAA 1997 section 6(5). Further information on foreign sourced income can be found by searching 'QC 22115' on ato.gov.au
2. No - Given regard to your circumstances as a whole and a consideration of the residency tests, the Commissioner considers that you are not a resident of Australia for income tax purposes. Further information on residency can be found by searching 'QC 33232' on ato.gov.au
This ruling applies for the following periods:
Year ending 30 June 2019
Year ending 30 June 2020
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You are a citizen of Australia.
You were sent to work in another country by your employer for a three year secondment period with the possibility of being extended.
You departed Australia in 20XX with your spouse and two children.
You arrived in the other country on a tourist visa.
You applied for and were granted an employer sponsored residency card. The residency card means you are treated as a resident for tax purposes while employed in the country.
Your family home was rented out and your family possessions were shipped overseas to your new address.
When the company you work for was sold, you were required to return to Australia.
You returned to Australia in 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 995-1(1)
Income Tax Assessment Act 1936 Subsection 6(1)
Income Tax Assessment Act 1997 Subsection 6-5(3)
Income Tax Assessment Act 1997 Subsection 6-10