Question

Alex, is a designer, who came to Australia in November 2017 on an assignment creating colorful designs based on the vibrant colors of the Great Barrier Reef. The project is expected to take six and a half months. Alex purchased a small boat so that she would be able to enjoy the islands she is using as inspiration for her designs and to take friends at weekends to the special locations she has discovered. Alex’s salary is paid into the Australian bank account she opened when she arrived. Alex intends to return to France, her country of domicile, and to her family when the contract is over. Her father has agreed to look after all her assets and investments for her while she is on assignment in Australia.

Alex was hoping that she may be considered non-resident for Australian tax purposes and has come to you for advice.

Explain to Alex the factors that the ATO will take into consideration and comment on her likely residency status. Explain the tax consequences of being classed a resident or not for tax purposes.

Answer 1

TO BE AN AUSTRALIAN RESIDENT SOMEONE MUST MEET ANYONE OF THE FOLLOWING CONDITION:-

1) DEMONSTRATE YOUR LIVING AND WORKING ARRANGEMENTS ARE CONSISTENT WITH MAKING AUSTRALIA YOUR HOME.

OR

2) LIVE IN AUSTRALIA FOR MORE THAN SIX MONTHS IN AN AUSTRALIAN INCOME TAX YEAR AND

- DO NOT HAVE A PLACE IN ANOTHER COUNTRY WHERE YOU USUALLY LIVE.

-INTEND TO TAKE UP RESIDENT IN AUSTRALIA.

IN THE GIVEN SITUATION ALEX, IS A DESIGNER ,WHO CAME TO AUSTRALIA IN NOVEMBER 2017 ON AN ASSIGNMENT CREATING COLOURFUL DESIGNS.THE PROJECT IS EXPECTED TO TAKE SIX AND HALF MONTHS. ALEX INTEND TO RETURNTO FRANCE ,HER COUNTRY OF DOMICILE,AND TO HER FAMILY WHEN THE CONTRACT IS OVER .

THOUGH THE CONTRACT IS FOR MORE THAN SIX MONTH BUT ALEX IS NOT INTEND TO TAKE UP RESIDENT IN AUSTRALIA.SHE WANT TO RETURN TO FRANCE ,HER COUNTY.

AFTER DISCUSSING THE ABOVE SITUATION WE CAN CONCLUDE THAT ALEX IS NON-RESIDENT FOR AUSTRALIAN TAX PURPOSE.