Residency

Are you a resident of Australia for tax purposes from DD MM YYYY to DD MM YYYY?

Yes. This ruling applies for the following period: Year ending 30 June 20YY Year ending 30 June 20YY Year ending 30 June 20YY The scheme commenced on: DD MM YYYY

You were born in Australia and are a citizen of Australia. You left Australia for Country A on DD MM YYYY. You landed in Country A on DD MM YYYY. You plan to stay in Country A for XX months with a maximum of XX months. For the Country A income tax year ending DD MM YYYY, you are not a Country A resident. You have entered Country A on a visa which allows you to stay for X years initially. You can extend it for a further year if you would like to. Your visa is not sponsored by your employer. You don't intend on applying for citizenship or permanent residency in Country A. Your current plan is to live in City A for XX months and return to Australia after a specified period. You don't have any dependants. Your partner has remained in Australia. You have an Australian driver's license. You did not inform the relevant government departments when you departed Australia. You are on your parents' private health insurance policy. They have enquired about stopping your plan but you would like to retain your account history to make it easier for you to set up an account when you return to Australia. You have provided details of your Australian accommodation.

You have provided details of your travel for the period before the ruling commenced. During the ruling period, you will travel throughout Country A and Continent A. However, you have not booked or planned any trips yet. You are currently living in City A. You will begin a new lease shortly. You will end this lease before it is completed if you leave Country A before the completion of your employment contract. You have a personal bank account in Country A. You will use this account to receive your salary in Country A currency. You do not plan to purchase any assets while living in Country A. You have personal bank accounts in Australia. You do not have any investments or assets in Australia. Your current mailing address is your friend's address in Country A. You get mail relating to your Australian bank accounts delivered to your parents' address in Australia. Your employment contract is for X years which may be extended by X years. You are currently on leave without pay from your current employment in Australia. You are currently on leave without pay while working in Country A. You have provided your employment history.

You are not a member of the Public Sector Superannuation Scheme (PSS) or an eligible employee in respect of the Commonwealth Superannuation Scheme (CSS). You are not the spouse or a child under 16 of a person who is a member of the PSS or an eligible employee in respect of the CSS. You are not currently undertaking any courses of study. You have notified your Australian banks that you are moving abroad for a year. You don't maintain any professional, social or sporting connections in either Australia or Country A. On your return to Australia, you will live with your partner in rental accommodation.

Income Tax Assessment Act 1936 subsection 6(1) Income Tax Assessment Act 1997 section 995-1

Summary You are a resident of Australia for tax purposes from DD MM YYYY. 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 a resident of Australia under the resides test for the period from DD MM YYYY to DD MM YYYY based on the following: • Physical presence

- you were born in Australia, grew up here and have been physically present in Australia for many years prior to departing for your employment contract in Country A. • Intention or purpose - your stated purpose is to travel to Country A on a temporary basis for employment and to return to Australia once your employment in Country A is completed • Behaviour - while in Country A, you will stay in leased accommodation, for which you have a XX month lease • Family and business/employment ties - your parents reside in Australia and you have employment to return to once you finish your current contract in Country A. Your partner also resides in Australia. • Maintenance and location of assets - you have bank accounts in Australia but no investments or assets. You have a bank account in Country A where your salary will be deposited. You don't plan to purchase any assets in Country A. • Social and living arrangements

- you have maintained your Australian driver's license, health insurance and name on the electoral roll. You are staying in leased accommodation in the Country A and will return to live in rented accommodation with your partner in Australia once your Country A employment is completed. Although the law only requires you to be considered a resident under one test, for completeness the other tests are also considered. 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 is Australia. It is considered that you did not abandon your domicile of origin in Australia and acquire a domicile of choice in Country A. You are not entitled to reside in Country A indefinitely and while living in Country A, you only hold a work permit which is valid for X years with the potential to extend it for a further XX months. Therefore, your domicile is Australia. 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 not satisfied that your permanent place of abode is outside Australia because: •                     you have not informed government departments that you have left Australia and you have retained your private health insurance •                     you have taken leave XX months leave from your employment in Australia and will return to that employment at the completion of your time in Country A •                     your partner is in Australia as well as your parents •                     your mail relating to your Australian bank accounts is delivered to your parents' house in Australia •                     you are in Country A on a temporary basis and intend to return to Australia once you have finished your employment in Country A 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 We have considered the facts of your situation in relation to the resides test during the following income years: •                     20YY-YY income year - you have been present in Australia for more than 183 days. •                     20YY -YY income year - based on the facts provided for this ruling you will not be present in Australia for more than 183 days. •                     20YY-YY income year - based on the facts provided for this ruling you will not be present in Australia for more than 183 days. Therefore, you are a resident under this test for the income year ending 30 June 20YY and you will not be a resident for the income years ending 30 June 20YY and 30 June 20YY. You have been in Australia for 183 days or more in the 20YY income year. Therefore, you will be a resident under this test for the 20YY income year unless the Commissioner is satisfied that your usual place of abode was outside Australia and you do not have an intention to take up residence in Australia.

Usual place of abode In the context of the 183-day test, a person's usual place of abode is the place they usually live and can include a dwelling or a country. A person can have only one usual place of abode under the 183-day test. However, it is also possible that a person does not have a usual place of abode. This is the case for a person who merely travels through various countries without developing any strong connections. If a person has places of abode both inside and outside Australia, then a comparison may need to be made to determine which is their usual place of abode. When comparing two places of abode of a particular person, we will examine the nature and quality of the use which the person makes of each particular place of abode. It may then be possible to determine which is the usual one, as distinct from the other or others which, while they may be places of abode, are not properly characterised as the person's usual place of abode: Emmett J at [78] in Federal Commissioner of Taxation v Executors of the Estate of Subrahmanyam [2001] FCA 1836. Application to your situation

The Commissioner is not satisfied that your usual place of abode was outside Australia for the relevant income year 20YY based in the following: •                     you usually reside in Australia and are absent due to employment. You will return to Australia on completion of your employment contract •                     you are only able to stay in Country A on a temporary basis and do not intend to take steps to be able to stay there permanently •                     your parents and partner remain in Australia •                     your mail relating to your Australian bank accounts is delivered to your parents' house in Australia. Intention to take up residency To determine whether you intend to take up residence in Australia, we look at evidence of relevant objective facts. 'Intend to take up residency' does not merely mean intend to stay for a long time. It means intending to live here in such a manner that you would reside here. Application to your situation The Commissioner is not satisfied that you do not intend to take up residence in Australia for the relevant income years because:

•                     you only intend to stay in Country A for XX months, with the potential to extend up to X years. •                     you will return to your employment in Australia on completion of your temporary employment contract in Country A. •                     you only have a short term accommodation lease in Country A and have plans to return to Australia and live in rental accommodation with your partner on completion of your Country A employment. 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 situation 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

You satisfy the resides and domiciles tests of residency and so are a resident of Australia for income tax purposes for the period from DD MM YYYY to DD MM YYYY. However, this may change if you stay in Country A and do not return to Australia at the completion of your employment in Country A.