Edited version of private advice

Authorisation Number: 1052298218769

Date of advice: 2 September 2024

Ruling

Subject: Residency and foreign income

Question 1

Are you a resident of Australia for taxation purposes?

Answer

No.

For tax purposes, you are a resident of Australia if you meet at least one of the following tests. You are not a resident of Australia if you do not meet any of the tests.

The resides test (otherwise known as the ordinary concepts test)

•         The domicile test.

•         The 183-day test.

•         The Commonwealth superannuation fund test.

We have considered your circumstances, and conclude that you are not a resident of Australia for the 20XX-XX or 20XX-XX income years, as follows:

•         You are not a resident of Australia according to the resides test.

•         You do not meet the domicile test, as whilst your domicile is in Australia, the Commissioner is satisfied that your permanent place of abode is outside Australia.

•         You do not meet the 183-day test because you were not in Australia for 183 days or more during the 20XX-XX and 20XX-XX income years.

•         You do not fulfill the requirements of the Commonwealth Superannuation test.

Question 2

Is the employment income you earned from the organisation while residing overseas assessable in Australia?

Answer

No.

You are a non-resident of Australia for taxation purposes performing work in a foreign country. As such, in accordance with the OECD commentary, our view is that this income is foreign sourced. Therefore, the income is not assessable in Australia.

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

Your country of origin is Australia.

You are an Australian citizen and Country B Citizen.

You obtained Country B citizenship in 20XX (over 10 years ago) as your parent was born in Country B. However, you never lived in Country B.

You are single and you do not have a spouse or dependents.

You have extended family members in Australia.

You left Australia in 20XX (over 10 years ago) and moved to live permanently in Country C, where you resided between 20XX and early 20XX (for a few years in total).

Following this, in early 20XX you accepted a job offer which was a permanent, full-time role based in Country A.

In early 20XX you departed Country C and relocated to Country A.

A requirement of the role was for you to relocate permanently to Country A whereupon you would become a Country A tax resident.

When you moved to Country A in 20XX, you received a 2-year work visa, valid until early 20XX.

When you moved to Country A for this employment opportunity, you intended to remain there permanently and had no set date on ever returning to Australia, Country C or move to any other country.

After a couple of years, you obtained another work visa which permitted you to continue to work and live in Country A until early 20XX.

You then obtained a 3rd work visa which was valid to early 20XX.

You have not applied for a permanent visa in Country A as your work deployments mean that you haven't been required to apply for a long-term visa there. Due to this your identification card in Country A has not been renewed since expiring in a few years ago.

Following the expiry of the 3rd work visa, you have had the following Visa's when you enter and return to Country A:

•         Visitors visa for Commonwealth nationals (you use your Country B passport in Country A) valid for 30 days, which can then be transferred to a Holiday purposes (Visitors visa) for a further 90 days (120 days in total).

This has been sufficient time given your work location and commitments.

When you moved to Country A for work, you rented your own property to live in.

At this property you maintain your personal belongings and all personal items.

You obtained a Country A identification card, mobile phone number and bank account.

You also had a gym membership and made friends whilst living in Country A.

You are also a member of a boxing club and a hiking group in Country A.

You have also maintained professional connections with both of your previous employers in Country A.

In 20XX, around a year after moving to Country A, you adopted a dog and have cared for the dog since then. You have not moved your dog because, you consider Country A as home, and you return there when you are not on your work deployment.

Whilst in Country A, you do normal social activities with your friends, which included but not limited to going for coffee, meals, hiking and bush walking.

You continued to maintain these personal relationships whilst working in Country D in 20XX, and you continue to maintain them while working in Country E from early 20XX. When you return to Country A, you meet with friends and ex-colleagues and attend boxing classes and care for your dog.

You have not maintained any professional, social or sporting connections in Australia since you left.

Between late 20XX and early 20XX, you applied for a role with an international organisation and lived in Country A while you waited for your deployment with the international organisation.

Between early 20XX and mid 20XX, you worked casually for a different overseas employer, in Country A. This overseas employer is a consultancy company.

Between mid 20XX and early 20XX, you accompanied your partner to Country E and worked remotely for the overseas employer.

You returned to Country A in early 20XX to take up your full-time employment with the overseas employer.

Between early 20XX and mid 20XX, you lived in Country A and worked full time for the overseas employer.

In mid 20XX, you entered a lease agreement for a home in Country A.

This lease agreement was originally for 6 months but was then renewed until mid 20XX on a longer-term basis.

In mid 20XX, you commenced your role with the international organisation and were deployed in Country D.

During the year you were deployed in Country D you returned to Country A twice on your breaks from work. You did not return to Australia at all.

In the 20XX year, you spent the majority of your time in Country D where you worked and Country A where you lived when you were not seconded for your work in Country D.

In mid 20XX your deployment in Country D ended and in mid 20XX (a short time later) you travelled in Country C for a couple of months.

Between mid to late 20XX and late 20XX, you returned to Country A while awaiting a new role with the same international organisation.

You currently lease a different home in Country A, where you have resided since late 20XX to the present day.

You have a lease for an indefinite period and you intend to remain there.

From early 20XX, you have been employed by the an Australian organisation and are seconded to work for the international organisation until early 20XX.

Following this, you have continued your lease in Country A and your personal belongings have remained in your home, and your pet will stay in the house you are renting. You have paid for people to care for your pet while you are working away.

You have been working for the international organisation and you are deployed in Country F, where you will be performing all of the work duties.

Your reasons for accepting the role with the international organisation were:

•         because your primary priority was and is, your work and your career in that sector in your chosen field; and

•         to provide for yourself and improve your long-term financial position.

You hold a multiple-entry work permit which was supplied by the international organisation which allows you to remain in Country F whilst you perform your work duties. This is not a permanent visa, and allows entry into Country F from one year from date of issue.

You do not intend on applying for permanent residency or citizenship in Country F.

Your employment contract was negotiated and executed by you in Country A.

You also researched and sourced this employment from your home in Country A, and attended meetings (virtually and by phone) from Country A.

You have provided a copy of your Employment Agreement which forms part of the facts of this private ruling.

In your employment agreement your conditions of employment state that:

•         Your ordinary hours of work will be XX hours per fortnight, plus reasonable additional hours as required to perform the duties of your position.

•         Your work location is in Country F.

•         Your annual leave entitlement is XX days per annum.

From early 20XX, you will split your time between Country F where you will be working for the international organisation and Country A where you live, with the majority of your time to be spent in Country F due to your working commitments.

Your employment and deployment with the international organisation in XXX requires you to be away from home for substantial periods of time, but you continue to maintain your home in Country A. At this home you have your personal belongings and personal assets, and your pet remains their while you travel.

Whilst you are based in Country F working with the international organisation, you are living in accommodation supplied by the international organisation, which is a fully furnished house that you share with other colleagues. However, you have your own room.

You will live in that house whilst working in Country F, and you leave your personal items and belongings when you are not there.

However, you intend to continue to live in Country A indefinitely.

You do not own any property in Australia and have no home in Australia.

In Australia you hold bank accounts, shares, investments, and a compulsory superannuation fund, none of which produce any significant income.

Aside from a small investment you do not anticipate earning any income from Australian sources.

In Country A, you hold a bank account, basic household furniture and personal effects.

You have had minimal physical presence in Australia since moving to Country C in 20XX and likewise since early 20XX when you moved to Country A. You have visited Australia a few times during this period of over 10 years for a total of a couple of months.

You have had the following visits to Australia since 20XX:

•         20XX - a couple of weeks.

•         early 20XX - a couple of weeks

•         late 20XX - a couple of weeks (training with employer from previous employment)

•         early 20XX - a couple of weeks (visiting family and friends)

During your short visits to Australia, your pet and personal belongings remained in Country A.

Your travel movements for the last couple of financial years are as follows:

•         mid 20XX: Country A (casual work).

•         mid 20XX - early 20XX (6 months): Country E (accompany partner who was from Country E, continued remote work for employer in Country A).

•         early 20XX - mid 20XX: Country A (living & working).

•         - mid to late 20XX (a few weeks): Country C (COVID vaccination, remote work, visit friends, attend weddings).

•         - early 20XX (a couple of weeks): Australia (visit family & friends).

•         mid 20XX (a few weeks): Country C (holiday & staying with partner).

•         mid 20XX (a few weeks) Country D (work).

•         - mid to late 20XX (a couple of weeks): Country C/Country G (holidays with partner).

•         - late 20XX (a few days): Country A (work trip & visit friends).

•         - late 20XX (a couple of weeks): Country H (holiday with partner).

•         - early 20XX (a couple of weeks): Country C (visit partner).

•         - mid 20XX (a couple of weeks): Country A (visit friends).

•         mid 20XX (a couple of weeks): Country A (return belongings).

•         mid 20XX (a couple of months): Country C (visit friends).

•         mid to late 20XX (a few months): Country A (awaiting new employment with the international organisation).

•         early 20XX - present: Country A (work).

•         - early 20XX (a few days): Country E (holiday & visit friends).

•         - early to mid 20XX (a couple of weeks): Country I (visit friends from Country A and tourism).

•         - mid 20XX (a couple of weeks): Country C/Country A/Country J (visit friends & work trip).

•         - mid 20XX (a couple of weeks): Country K (visit friends & tourism).

You will remain working in Country F until early 20XX. During this period, you plan to return to Country C once (for a couple of weeks) and Country A once (for a couple of weeks). Upon completing your work assignment with the international organisation, you may return to Australian to visit family, but if you do, you will then return to Country A to await a further mission with the international organisation.

During future missions you will again be deployed overseas and maintain your house in Country A.

Tax residency overseas

Between mid 20XX and mid 20XX - Tax resident of Country D

Under Country D's tax legislation, a person will be resident if they are physically present for 183 days or

more. You were physically present in Country D for more than 183 days in their 20XX year.

Between early 20XX and present

Under Country F tax law, a person will be considered as a resident if the period of their stay in Country A is for a

continuous duration of four months, or for a duration of six months scatted during the fiscal year. The fiscal

year is the calendar year.

You will be present in Country F for more than 6 months during the 20XX calendar year.

You have cancelled your private health insurance policy in Australia.

In late 20XX (over 10 years ago) you cancelled your Australian electoral role enrolment.

You operate bank accounts in Country A, Country C, and Australia.

You hold a driver's licence in Country A and Australia. Country A allows a person to drive with a foreign driver's licence indefinitely.

You hold an Australian Medicare card; however, you have only used it once since leaving Australia in 20XX (over 10 years ago).

Your mailing address is your parents address in Australia for security, given the mailing system in Country A is not as reliable as Australia or Continent A.

You have advised your Australian financial institution that you are a non-resident for taxation purposes, and 10% non-resident withholding tax has been deducted from interest payments.

You are not an eligible contributing member of the Commonwealth Superannuation Scheme (CSS) which was established under the Superannuation Act 1976 or the Public Sector Superannuation Scheme (PSS) which was established under the Superannuation Act 1990.

Relevant legislative provisions

Income Tax Assessment Act 1936 Subsection 6(1)

Income Tax Assessment Act 1997 Section 6-5

Income Tax Assessment Act 1997 Section 995-1