Overseas doctor a tax resident of Australia

The AAT has held that a taxpayer was a "resident of Australia" during the relevant years.

Background

The taxpayer was a doctor who had been working outside Australia since 2006. In October 2011, the taxpayer sought a private ruling from the Commissioner to declare him a non-resident of Australia for the 2010, 2011 and 2012 income years ("the relevant years"). The Commissioner did not agree and issued a private ruling that the taxpayer was a resident of Australia during the relevant years for Australian tax purposes. The taxpayer objected against the ruling, but the objection was disallowed.

The AAT heard various facts concerning the taxpayer, including that he had been employed in East Timor since 2006 and spent nine to 11 months of the year in East Timor, with the remainder of his time spent in Australia (SapphireBeach in New South Wales) and Bali. When in East Timor, the taxpayer stayed in a two-bedroom, self-contained apartment, which was supplied by his employer. The taxpayer and his wife owned a property in SapphireBeach which was described in the ruling as the "family home". The taxpayer and his wife also had a 55-year lease on a property in Bali, which they called home. Before the AAT, the taxpayer submitted that, in essence, he "resided" in East Timor as that was where he spent his time and lived.

Decision

The AAT said the question was not whether the taxpayer resided in East Timor or Bali, but whether the taxpayer resided in Australia. The AAT was satisfied that the taxpayer "resided" in Australia during the relevant years. It said that the "continuity of association" the taxpayer had retained with Australia was a significant factor. The AAT noted, among other things, that the taxpayer did "not seem to have brought himself to regard East Timor as home", noting that the taxpayer and his wife regarded the Bali property as their home.

The AAT also noted that the taxpayer did "not express an intention to remain in East Timor after his employment ends" and that "his connection with that location appears to be one based almost entirely on his employment arrangement". The AAT said the taxpayer expressed "an intention to divide his time between Bali and SapphireBeach – hardly an indication that his ties with Australia have been broken". Accordingly, the Commissioner’s objection decision was affirmed.

Re Pillay and FCT [2013] AATA 447, www.austlii.edu.au/au/cases/cth/AATA/2013/447.html.