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02 Jun 2014 Australian citizen not a “resident” during relevant years - Dempsey

The Administrative Appeals Tribunal has found that an Australian citizen who was domiciled in Australia was nevertheless not a resident of Australia and did not have his permanent place of abode in Australia for income tax purposes during the two relevant income years.

The taxpayer was employed as a project manager on a major construction project in Saudi Arabia. His employment contract was of indefinite duration, and the project in fact lasted nearly three years. The project clearly would come to an end in due course, and the taxpayer expected that he would then move on to another project with the same group, under a new contract. (In fact that did not happen; at the end of the current project the taxpayer returned to Australia.)

For the duration of the project, the taxpayer lived in Saudi Arabia, in supplied accommodation. He took regular holidays, mostly in Thailand. He also returned to Australia for regular, but short, visits. He owned a house in Australia which remained empty and “in mothballs” while he was in Saudi Arabia. The taxpayer’s salary from his Saudi Arabian employer was paid into his Australian bank account, in Australian dollars, and his employer also made contributions on the taxpayer’s behalf to a superannuation fund administered in Australia.

On the evidence, the Tribunal was satisfied that, although the taxpayer remained domiciled in Australia during the relevant years of income, he was not resident in Australia during those years, and his permanent place of abode was outside Australia. His income from Saudi Arabian sources during those years was therefore not subject to Australian income tax.

Re Dempsey and FCT [2014] AATA 335 (Justice J A Logan RFD, Presidential Member, P E Hack SC DP, R G Kenny SM, 29 May 2014).

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