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The AAT has held that a taxpayer ("Mr M") who worked as a lead instrumentation engineer and manager in Oman for a multinational company in the oil and gas industry from 4 January 2010 to 29 April 2011, when he returned to live with his family in Perth, was a non-resident of Australia for tax purposes during this period.

In relation to whether Mr M was ordinarily resident in Australia during the relevant period, the AAT said at para 55:

"Mr M was not a resident of Australia under the ordinary concepts test, during the whole of the Relevant Year. The ordinary meaning of the word “resides” requires the issue of whether a person is a resident of Australia to be determined on the totality of the taxpayer’s factual circumstances, not those of his family unit. For the most part, Mr M was not physically present in Australia nor did he intend to live in Australia, in the Relevant Year. He spent 62 days in Australia and 240 days in Oman in the period up to 29 April 2011. Mr M worked and lived in Oman and it was Mr M’s intention to continue to work and live in Oman, dependent on the renewal of his employment contract. Mr M’s priority was his work, and his career. Mr M’s attachment to his work in Oman is a very significant factor in my conclusion that he was not a resident of Australia, when weighed with the other considerations. He had established himself in Oman, including by renting a house which was for his exclusive use and having routines which involved partaking in social and sporting activities. He used his leave to travel back to Perth to spend time with his four children, but his connection with his children is not in my view determinative of the question of whether he was a resident of Australia. That it was a significant factor is supported by the fact that it ultimately led to Mr M’s change of mind to return permanently to live with his family in April 2011. But that only reinforced my conclusion that for the period up to 29 April 2011, he was not a resident of Australia as he was living in Oman, pursuing his career. In the circumstances, Mr M’s work ties outweighed his family ties, even though he financially supported his family by sending the bulk of his income to the joint bank account held with his wife in Australia. Mr M ordered his lifestyle around his work commitments."

The AAT was also satisfied that Mr M's permanent place of abode was outside Australia (which was a necessary finding having regard to the fact that his domicile was Australia).

The AAT set aside the Commissioner's objection decision.

The Engineering Manager and FCT [2014] AATA 969 (AAT, Lazanas SM, 24 December 2014).


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