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Who is ‘resident for tax purpose’?

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Tax residency is different from immigrations and border protective terms and conditions of Australia. A person can be considered as resident for tax purpose though he is not an Australian citizen or permanent resident.

Following scenarios consider someone as resident for tax purpose in Australia:

  •  A person leaves Australia temporarily and do not set up a permanent home in another country.
  • An overseas student enrolled in a course that is more than six months long at an Australian institution.
  • Person visiting Australia for more than six months and for most of that time the individual lives at the same place, and either has or establishes ties in the local community.
  •  Person migrates to Australia and intends to reside here permanently.

Following scenarios consider someone as foreign resident for tax purpose:

  • Someone visiting Australia for more than six months, and for most of that time the individual is travelling and working in various locations around Australia.
  • Someone either holidaying in Australia or visiting for less than six months.
  • Someone leaving Australia permanently.

Hence, Residency Test helps to understand the criteria for which tax is applicable. Residents of Australia don’t need to consider this test.  A person who is not resident but can be considered as resident as well as eligible for residency tax if they satisfy the following conditions:

1. The Domicile test:  A person is an Australian resident if he resides permanently   in Australia, unless there is a satisfactory condition that his permanent place of habitat is outside Australia.

2. The 183-day test:  If the individual is present in Australia for more than half the income year, whether without or with breaks, he/she may be said to have a constructive residence in Australia, unless it can be established that the individual’s usual place of abode is outside Australia and he/she has no intention of taking up residence here.

3. The Superannuation test:  This test signifies that Australian government employees working at Australian posts abroad are considered as Australian residents.

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