Edited version of private advice

Authorisation Number: 1052180295983

Date of advice: 13 October 2023

Ruling

Subject: Residency for taxation purposes

Question

Are you a resident of Australia for taxation purposes?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20xx

Relevant facts and circumstances

You were born in Country Z.

You are a citizen of Country Y.

You spend a few weeks a year in Country Y.

You spend the majority of your time in Country Z.

You are married to a Country Z citizen.

You and your spouse have a main residence in Country Z.

You reside in Country Z on a specific type of visa.

Your working permit in Country Z allows you to work and reside in Country Z. This visa is typically for a few years duration for expatriates working in Country Z, which includes the option to renew. You have and intend to continue to utilise the option to extend, which is the standard process for foreign nationals working in Country Z.

You have renewed your current visa twice so far.

Prior to the visa, you were on a different visa while in Country Z.

You do not own any properties in your name in Country Z or any other country.

You are employed permanently by Company Z.

Your employment contract is permanent in nature and provides that your employment is ongoing and for an indefinite period.

You receive a salary for your role in Country Z that is paid through the Country Z payroll into your Country Z bank account.

You and your spouse have several Country Z bank accounts and credit cards.

You have a number of cars that are garaged at your Country Z residence.

You hold a Country Z driver's license.

You have a mobile phone contract with a Country Z telecommunications provider.

You are covered by private health insurance in Country Z. The insurance policy is in your parent's name, and are listed as a beneficiary under this policy.

You have a membership to the Country Z Club in Country Z. You pay an annual membership fee.

You lodge tax returns in Country Z as a tax resident.

You and your spouse originally applied for a visa a couple of years ago. This is a permanent residency visa in Australia. The visa has not yet been granted.

However, as you had not received any feedback on this application and had assumed that the application had been denied, several months ago you decided to apply for a different visa. The visa has not yet been granted.

You have subsequently been advised that your visas have in fact been received and is currently being reviewed and processed and is likely to be approved in the coming months.

You and your spouse intend on being in Australia for a few months a year.

Your intention is to travel to Australia several times per year and stay a few weeks per trip.

You have not been in Australia in any financial year for more than 183 days.

You will not be in Australia for more than 183 days.

Whilst in Australia on the visas, you intend to initially stay in temporary accommodation such as hotels and serviced apartments.

You and your spouse will only be travelling to Australia with a suitcase and will not be shipping any of your personal belongings to Australia during any of these temporary trips.

The primary purpose of these trips will be for a holiday. You will, however, be looking for commercial and investment opportunities.

When not visiting Australia, you will be residing in Country Z.

You may consider purchasing a property in Australia in the near future for convenience when you visit Australia, rather than having to stay in hotels and serviced apartments. This is yet to be determined.

You will rent vehicles for your use whilst visiting Australia. You may look to purchase a vehicle for the ease of getting around whilst visiting Australia, but this is yet to be determined.

You do not currently have a mobile phone contract with an Australian telecommunications provider; however, you may consider obtaining a mobile phone contract with an Australian provider.

You do not have Australian private health insurance, nor will you be covered by Medicare.

You do not have an Australian Tax File Number (TFN).

You do not have an Australian superannuation account.

You do not have any social, professional, or sporting memberships or associations in Australia. You may consider obtaining a sporting membership for use whilst holidaying in Australia.

You have registered with the Australian Business Registry Service.

You do not contribute to an Australian superannuation fund.

You or your spouse are not members of the Commonwealth Superannuation Scheme (CSS) or Public Service Superannuation Scheme (PSS).

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 6(1)

Reasons for decision

For tax purposes, whether you are a resident of Australia is defined by subsection 6(1) of the Income Tax Assessment Act 1936 (ITAA 1936).

The definition has four tests to determine your residency for income tax purposes. These tests are:

•         the resides test

•         the domicile tests

•         the 183-day test, and

•         the Commonwealth superannuation fund test.

It is sufficient for you to be a resident under one of these tests to be a resident for tax purposes.

Our interpretation of the law in respect of residency is set out in Taxation Ruling TR 2023/1 Income tax: residency tests for individuals.

The resides test

The resides test is the primary test of tax residency for an individual. If you reside in Australia according to the ordinary meaning of the word resides, you are considered an Australian resident for tax purposes.

Some of the factors that can be used to determine whether you reside in Australia include:

•         period of physical presence in Australia

•         intention or purpose of presence

•         behaviour while in Australia

•         family and business/employment ties

•         maintenance and location of assets

•         social and living arrangements. No single factor is decisive, and the weight given to each factor depends on your specific circumstances.

Where an individual does not reside in Australia according to ordinary concepts, they will still be an Australian resident if they meet the conditions of one of the other tests.

The domicile tests

Under the domicile test, if your domicile is in Australia, you are a resident of Australia unless the Commissioner is satisfied that your permanent place of abode is outside Australia.

Whether your domicile is Australia is determined by the Domicile Act 1982 and the common law rules on domicile. For example, you may have a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

Whether your permanent place of abode is outside Australia is a question of fact to be determined in light of all the facts and circumstances of each case.

Key considerations in determining whether you have your permanent place of abode outside Australia are:

•         whether you have definitely abandoned, in a permanent way, living in Australia

•         length of overseas stay

•         nature of accommodation, and

•         durability of association

The 183-day test

Under the 183-day test, if you are present in Australia for 183 days or more during the income year, you will be a resident, unless the Commissioner is satisfied that both:

•         your usual place of abode is outside Australia, and

•         you do not intend to take up residence in Australia.

The question of usual place of abode is a question of fact and generally means the abode customarily or commonly used by you when are physically in a country.

The Commonwealth superannuation test

An individual is a resident of Australia if they are either a member of the superannuation scheme established by deed under the Superannuation Act 1990 or an eligible employee for the purposes of the Superannuation Act 1976, or they are the spouse, or the child under 16, of such a person.

Application to your circumstances

We have considered each of the statutory tests listed above in relation to your particular facts and circumstances. We conclude that for the relevant period you are not a resident of Australia as follows.

Taking into account your individual circumstances, we have concluded that you are not a resident of Australia according to ordinary concepts.

We also consider that your domicile is not in Australia as you were born in Country Z, and you are a citizen of Country Y.

We considered the following factors in forming our conclusion:

•         You do not intend on living in Australia

•         Your home and work are in Country Z

•         You intend to come to Australia on holidays and you will look for investment opportunities

•         You will stay in short term accommodation in Australia

•         You were not in Australia for more than 183 days in the relevant income year and you will not be in Australia for more than 183 days in the future income years.

You do not fulfil the requirements of the Commonwealth Superannuation test and are therefore not a resident under this test.

You will not be a resident of Australia for taxation purposes for the period of the private ruling.