Edited version of private advice

Authorisation Number: 1052404463232

Date of advice: 04 June 2025

Ruling

Subject: INTL - residency

Question

Were you a resident of Australian for taxation purposes from 1 July 20YY to 30 June 20YY?

Answer

No.

This ruling applies for the following periods:

Year ending 30 June 20YY

Year ending 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts and circumstances

You were born in xxxx.

You are a citizen of xxxx and a citizen of the xxxx.

You departed Australia on DD MM 20YY to travel and live in the xxxx for a period.

You have returned to Australia since then to visit family and friends for holidays.

You have not been in Australia greater than 183 days for any of the income years during the period 1 July 20YY to 30 June 20YY.

You state you are an Australian resident on your incoming and outgoing passenger cards and provide your parents' address.

You have travelled to other countries over the past three years.

You do not have any dependents.

You are undecided when you will return to Australia.

You have extended family in the xxxx

You do not maintain any professional or occupational memberships in Australia.

You do not have any professional or occupational memberships in the xxxx

You have an Australian drivers' licence.

You advised the Australian Electoral Commission of your departure.

You did not advise any other organisation of your departure.

You rent accommodation with your partner in the xxxx on a monthly rolling lease.

You do not own any property in Australia or overseas.

You rented an apartment prior to your departure.

You have stored your household effects at your parents' home.

You hold investments with an xxxx xxxx.

You have not advised any Australian financial institutions that you are a foreign resident for non-resident withholding purposes.

You opened a bank account in the xxxx in DD 20YY.

You are a sole trader and work as an xxxx for an Australian employer. You work for this employer remotely from the xxxx.

You are also employed part-time as a xxxx the xxxx. The role is on-going.

Neither you nor your partner have been employed by the Commonwealth of Australia.

You are not a member of the Public Sector Superannuation Scheme (PPS).

You are not an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS).

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

Section 995-1 of the Income Tax Assessment Act 1997 (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', as applied to an individual, are defined in subsection 6(1) of the ITAA 1936.

The definition offers four tests to ascertain whether each individual taxpayer is a resident of Australia for income tax purposes. These tests are:

•                     the resides test (also referred to as the ordinary concepts test)

•                     the domicile test

•                     the 183-day test, and

•                     the Commonwealth superannuation fund test.

The resides test is the primary test for deciding the residency status of an individual. This test considers whether an individual resides in Australia according to the ordinary meaning of the word 'resides'.

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, 183-day test and Commonwealth superannuation fund test).

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

We have considered the statutory tests listed above in relation to your situation as follows:

The resides test

The ordinary meaning of the word 'reside' has been expressed as 'to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place': See Commissioner of Taxation v Miller (1946) 73 CLR 93 at 99 per Latham CJ, citing Viscount Cave LC in Levene v Inland Revenue Commissioners [1928] AC 217 at 222, citing the Oxford English Dictionary. Likewise, the Macquarie Dictionary defines 'reside' as 'to dwell permanently or for a considerable time; have one's abode for a time'.

The observations contained in the case of Hafza v Director-General of Social Security (1985) 6 FCR 444 are also important:

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place - even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248; and Keil v Keil [1947] VLR 383 - a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place - Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 - together with an intention to return to that place and an attitude that that place remains "home": see Norman v Norman (No 3) (1969) 16 FLR 231 at 235... here the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

The Commissioner considers the following factors in relation to whether a taxpayer is a resident under the 'resides' test:

•                     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.

It is important to note that no one single factor is decisive, and the weight given to each factor depends on each individual's circumstances.

Because the resides test is about whether an individual resides in Australia, the factors focus on the individual's connection to Australia. Having a connection with another country, or being a resident of another country, does not diminish any connection to Australia. The ordinary meaning of reside does not require an individual to have a principle or usual place of residence in Australia.

Application to your situation

You are not a resident of Australia under the resides test for the period 1 July 20YY to 30 June 20YY based on the following:

•                     you departed Australian in MM 20YY to live and work in the xxxx

•                     you have advised that you do not know when you will return to Australia on a permanent basis

•                     you state you are an Australian resident and provide your parent's address on incoming and outgoing passenger cards

•                     you have ongoing employment in the xxxx

•                     you work remotely as a sole trader for an Australian employer

•                     you travel to Australia for short periods to visit family

•                     you will stay with your family when you visit Australia

•                     you have stored any possessions and household goods at your parent's home

•                     you hold bank accounts in both Australia and the xxxx

•                     you hold investments with an Australian-based digital investment platform

•                     you have rental accommodation in the xxxx

You may still be an Australian resident if you meet the conditions of one of the other tests (the domicile test 183-day test and Commonwealth superannuation fund test).

Domicile test

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

Domicile

Whether your domicile is in Australia is determined by the Domicile Act 1982 and the common law rules on domicile.

Your domicile is your domicile of origin (usually the domicile of your father at the time of your birth) unless you have a domicile of dependence or have acquired a domicile of choice elsewhere. To acquire a domicile of choice of a particular country you must be lawfully present there and hold the positive intention to make that country your home indefinitely. Your domicile continues until you acquire a different domicile. Whether your domicile has changed depends on an objective consideration of all relevant facts.

Application to your situation

In your case, you were born in Australia and your domicile of origin in Australia. You are a citizen of Australia and a citizen of the xxxx.

It is considered that you abandoned your domicile of origin in 20YY and acquired a domicile of choice in the xxxx. You hold xx xx and have a right to reside in the xxxx indefinitely, you remain a citizen of Australia.

Therefore, your domicile is the xxxx.

Permanent place of abode

If you have an Australian domicile, you are an Australian resident unless the Commissioner is satisfied that your permanent place of abode is outside Australia. This is a question of fact to be determined in light of all the facts and circumstances of each case.

'Permanent' does not mean everlasting or forever, but it is to be distinguished from temporary or transitory.

The phrase 'permanent place of abode' calls for a consideration of the physical surroundings in which you live, extending to a town or country. It does not extend to more than one country, or a region of the world.

The Full Federal Court in Harding v Commissioner of Taxation [2019] FCAFC 29 held at paragraphs 36 and 40 that key considerations in determining whether a taxpayer has their permanent place of abode outside Australia are:

•                     whether the taxpayer has definitely abandoned, in a permanent way, living in Australia

•                     whether the taxpayer is living in a town, city, region or country in a permanent way.

The Commissioner considers the following factors relevant to whether a taxpayer's permanent place of abode is outside Australia:

•                     the intended and actual length of the taxpayer's stay in the overseas country

•                     whether the taxpayer intended to stay in the overseas country only temporarily and then to move on to another country or to return to Australia at some definite point in time

•                     whether the taxpayer has established a home (in the sense of dwelling place; a house or other shelter that is the fixed residence of a person, a family, or a household), outside Australia

•                     whether any residence or place of abode exists in Australia or has been abandoned because of the overseas absence

•                     the duration and continuity of the taxpayer's presence in the overseas country

•                     the durability of association that the person has with a particular place in Australia, i.e. maintaining assets in Australia, informing government departments such as the Department of Social Security that he or she is leaving permanently and that family allowance payments should be stopped, place of education of the taxpayer's children, family ties and so on.

As with the factors under the resides test, no one single factor is decisive, and the weight given to each factor depends on the individual circumstances.

Application to your situation

The Commissioner is satisfied that your permanent place of abode is outside of Australia because you have been outside of Australia from DD MM 20YY

•                     You have been physically present in the xxxx from MM 20YY.

•                     Your purpose is to travel and work overseas for an indefinite period.

•                     You have opened a bank account in the xxxx.

•                     You have employment in the xxxx.

•                     You have employment income from an Australian source.

•                     You work remotely for your Australian employer, invoicing them for your hours of work.

•                     You have rental accommodation in the xxxx and no permanent residence in Australia.

•                     You do not maintain any professional or social memberships or associations in Australia.

•                     You have advised the Australian Electoral Commission that you were departing Australia.

Therefore, you are not a resident of Australia under the domicile test.

183-day test

Where a person is present in Australia for 183 days or more during the year of income the person will be a resident, unless the Commissioner is satisfied that both:

•                     the person's usual place of abode is outside Australia, and

•                     the person does not intend to take up residence in Australia.

Application to your situation

You have not been present in Australia for 183 days or more in the 20YY and20YY income years. Therefore, you are not a resident under this test for these income years.

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.

You are not a member on behalf of whom contributions are being made to the Public Sector Superannuation Scheme (PSS) or the Commonwealth Superannuation Scheme (CSS) or a spouse of such a person, or a child under 16 of such a person. Therefore, you are not a resident under this test.

Conclusion

As you do not satisfy any of the four tests of residency, you are not a resident of Australia for income tax purposes for the 20YY and 20YY years ended 30 June 20YY.