Question

In: Accounting

Pablo is a Portuguese resident employed by a Portuguese company. He is sent to Australia to...

Pablo is a Portuguese resident employed by a Portuguese company. He is sent to Australia to work on a shortterm project to assist with the establishment of a branch office of the company in Australia. Pablo works in Australia for one month. Throughout this period, his salary was paid into his Portuguese bank account. During the year, he earned the equivalent of A$120,000 from his employment. Does Pablo have to pay Australian tax on any of his salary?

Solutions

Expert Solution

a. Resides test - Pablo do not reside in Australia as he worked in Australia for one month.

b. Domicile test - This test is also not satisfied as Pablo worked for only one month in Australia and has no intention to live in Australia.

c. 183 - day - This test is also not satisfied as Pablo lived for one month only.

Since he do not satisfy any of the test, Pablo is a non resident in Australia.
Pablo has all the family ties, financial ties, place of abode outside AU. He fails all the test. The one month income source will be taxed in AU, but other 11 months salary will not be liable to Australian tax.


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