Hey there,
Thanks for your reply, it’s very helpful in clarifying the obligations of a temporary resident for tax purposes.
What I’m having difficulty with now though is your response to point 1 and understanding the classification of a temporary tax resident.
Based on the INCOME TAX ASSESSMENT ACT 1997 - SECT 995.1 this is defined as:
“"temporary resident": you are a temporary resident if:
(a) you hold a temporary visa granted under the Migration Act 1958 ; and
(b) you are not an Australian resident within the meaning of the Social Security Act 1991 ; and
(c) your * spouse is not an Australian resident within the meaning of the Social Security Act 1991.
However, you are not a temporary resident if you have been an Australian resident (within the meaning of this Act), and any of paragraphs (a), (b) and (c) are not satisfied, at any time after the commencement of this definition.
Note: The tests in paragraphs (b) and (c) are applied to ensure that holders of temporary visas who nonetheless have a significant connection with Australia are not treated as temporary residents for the purposes of this Act.”
Based on this definition I would class myself as a temporary tax resident. This is because:
1. I hold a Subclass 444: Special Category visa (SCV) “A Special Category Visa is a temporary visa permitting the holder to remain in Australia while the holder is a New Zealand citizen.” Which was granted to me after Feb 2001, meaning it is an unprotected SGV.
2. I reside in Australia, however I am not (and have never been):
- An Australian Citizen;
- A holder of a permanent entry permit or a protected Special Category visa (SCV) holder from New Zealand;
- A holder of a return endorsement or resident return visa.
- An exempt non-citzen (i.e., New Zealand citizens in Australia before 31 August 1994)
- Likely to remain in Australia permanently
So would not meet the definition of a Australian resident within the meaning of the Social Security Act 1991 below
“An Australian resident is a person who:
(a) resides in Australia; and
(b) is one of the following:
(i) an Australian citizen;
(ii) a person who is, within the meaning of the Migration Act 1958
, the holder of a valid permanent entry permit;
(iii) a person who has been granted, or who is included in, a return
endorsement, or a resident return visa, in force under that
Act;
(iv) a person who:
(A) is, for the purposes of that Act, an exempt non-citizen;
and
(B) is likely to remain permanently in Australia.”
3. My partner is in the same circumstance as I am.
However based on the document (https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency) you linked it says you’re considered an Australian resident for tax purposes if any of the criteria apply:
1. Resides test: You reside in Australia, e.g. you maintain a
- physical presence
- intention and purpose
- business or employment ties
- maintenance and location of assets
- social and living arrangements.
2. Domicile test: If your domicile is in Australia, even if not permanently and only indefinitely in Australia.
3. The 183-day test: if you're actually present in Australia for more than half the income year, whether continuously or with breaks. Unless it is established that your ‘usual place of abode’ is outside Australia and you have no intention of taking up residence here.
These definitions are very different than those from the Tax Assessment Act. I would say I currently reside in Australia, but my domicile isn’t in Australian as I am not choosing to permanently migrate to Australia, and I have been present in Australia for more than half the income year.
Does this make me an Australian Resident for Tax Purposes or a Temporary Tax Resident. Based on the income tax assessment act I would be a temporary resident, but based on the residency tests I wouldn’t be? I don’t understand how to make the assessment of my tax category.
Can you please share some insight?
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