Edited version of private advice

Authorisation Number: 1052180657889

Date of advice: 18 October 2023

Ruling

Subject: Residency

Question

Are you a resident of Australia for tax purposes as defined by subsection 6(1) of the ITAA 1936?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You were born in Country A on XX XX 20XX. You are a citizen of Country A.

You travelled to Australia on XX XX 20XX.

Your reason for travelling to Australia was to enrol in part-time study.

You were issued a student visa which will expire on XX XX 20XX.

While in Australia you are studying a diploma at college.

The duration of the course is a year with the estimated completion date being XX 20XX.

You have not applied to have your visa extended.

You have not applied for citizenship or permanent residency.

You plan to leave Australia on XX XX 20XX.

You have not lodged any foreign income tax returns while living in Australia.

You do not have a spouse or dependants.

You currently reside at an Australian address.

You have an overseas residence located in Country A and were resided at this residence prior to travelling to Australia.

You have left the overseas residence unoccupied because you plan on returning and residing in it upon your return to Country A.

Your personal belongings remain in your overseas residence.

You have your mail sent to your overseas address.

You were employed by an Australian Company from XX XX 20XX.

You do not have a job or employment position being held for you overseas.

You do not receive any income from sources outside of Australia.

You are not a Commonwealth of Australia Government employee for superannuation purposes.

Relevant legislative provisions

Income Tax Assessment Act 1936 subsection 6(1)

Income Tax Assessment Act 1997 section 995-1

Reasons for decision

Overview of the law

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 test
• 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 test

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 ruling period, you are not a resident of Australia as follows.

Resides test

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

We considered the following factors in forming our conclusion:

• The purpose of your travel to Australia is to undertake study and you intend to depart shortly after completing these studies.
• You travelled to Australia on a student visa, which will expire on XX XX 20XX. You have made no attempts to extend your visa or apply for a new one.
• You maintain your residence in your home country, which contains your personal and household possessions. You also receive your mail at this address, in preparation for your return to Country A.
• You have no intention to settle in Australia on a permanent basis.

Domicile test

We consider that your domicile is not in Australia. We considered the following factors in forming our conclusion:

• You were born in Country A and are a citizen of Country A.
• You entered Australia on a student visa, which only allows you to remain in Australia for a finite period.
• You have not applied for citizenship, to have your visa extended or for permanent residency in Australia
• You own your own residence in Country A.
• You have left the residence unoccupied because you plan on returning and residing in it upon your return to Country A.
• Your personal belongings remain in your overseas residence.
• You have your mail sent to your overseas address.

183-day test

You were in Australia for 183 days or more during the 20XX and 20XX-income years however 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.

Superannuation test

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

Conclusion

The Commissioner is satisfied you are not a resident of Australia for income tax purposes for the relevant ruling period.