Newsletter
July 2014 Newsletter
Individual working overseas not a tax resident
An individual has been successful before the AAT in arguing that he was not a "resident" of Australia for tax purposes for the 2009 and 2010 income years. This was despite being an Australian citizen, maintaining an Australian bank account for his salary, and retaining his house in Queensland.
During the years in question, the taxpayer had signed up with a company to work on a project in Saudi Arabia. The project was expected to last three years and the taxpayer had an expectation that upon completion of the project, he would move on to another project located in Saudi Arabia.
In making various findings of fact, the AAT largely accepted the taxpayer's evidence. It said that the taxpayer's presence in Saudi Arabia "was hardly casual or passing". The AAT accepted that the taxpayer had formed an intention to make Saudi Arabia his home for the duration of the project and beyond.
TIP: This case demonstrates that proving tax residency requires a detailed examination of various facts, and the weighing up of those facts, to come to a conclusion that an individual is (or is not) a tax resident. It also demonstrates the importance of having corroborating evidence to prove the taxpayer's case.