Are you an Australian resident for tax purposes whilst holding a special visa?
There are a number of factors that need to be considered when working out if someone is considered an Australian resident for tax purposes.
Working out residency for tax purposes:
Working out residency for tax purposes involves looking at your purpose for being in Australia, your way of life in Australia and whether you have a home in another country.
To be an Australian resident you must meet one of the following:
You are able to show that your living and working arrangements are consistent with making Australia your home.
You live in Australia for more than six months in an Australian income tax year and don't have a place in another country where you usually live.
Generally, unless you meet the 183-day rule and have proven that you intend to remain in Australia long-term or permanently, you will not be considered a resident for tax purposes. See factors to consider for what we look at when determining residency status for tax purposes.
Example: Arrived as traveller and decides to stay indefinitely
John is a Hong Kong resident and arrives in Australia intending to travel for 4 months. Whilst in Australia, he decides he wants to stay in Australia permanently, a special visa is granted and advised that he is allowed to stay and work in Australia.
Once this special visa is granted, John finds permanent employment in Sydney, he arranges his cat to fly to Australia, selling his home in Hong Kong and transfer his physical assets and financial assets to Australia at the same time.
Decision:
Non – resident period
John is a non – resident in tax purpose during his stay on holiday
Resident period
John is an Australian resident for tax purposes from when his intention and behaviours changed to live in Australia. (Arrange his pet to fly to Australia, selling his home and transfer assets are indicative behaviour residing in Australia)
