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02 Jul 13 Taxpayer resident of Australia because of continuity of association – Pillay

The Administrative Appeals Tribunal has found that a taxpayer was a resident of Australia for tax purposes despite his spending up to 11 months each year working overseas: Re Pillay and FCT [2013] AATA 447 (Deputy President S E Frost, 28 June 2013).

The taxpayer was an Australian citizen. He was employed by a private medical contracting company and worked in East Timor for between 9 and 11 months of each year since 2006. He and his wife had a property in Australia and another in Bali. He spent between six and eight weeks of each year in Australia, dividing his time between the Australian property and visiting his family. He had Australian bank accounts which he used to meet his living expenses. He was registered as a non-resident with the Australian Electoral Commission. He had also registered himself as a non-resident with the Department of Foreign Affairs. His indemnity insurance policy with an Australian medical insurer had him registered since 2006 as working overseas. The Australian Health Practitioners Registration Agency had him registered as working overseas in East Timor. He had not used Medicare or the Pharmaceutical Benefits Scheme since 2006.

The Tribunal found that what was significant in this matter was the “continuity of association” that the taxpayer had retained with Australia. Although he had been working for an extensive period in East Timor, and although he had an apartment to stay in while he was working there, he did not seem to have brought himself to regard East Timor as home. It appeared that he and his wife regarded the Bali property as home, despite the fact that they had little time to spend there together.

The taxpayer’s connection with East Timor appeared to be one based almost entirely on his employment arrangement. He did not express an intention to remain in East Timor after his employment ended. Rather, he expressed an intention to divide his time between Bali and Australia.

On this basis, the Tribunal found that the taxpayer “resided” in Australia during the relevant years.

At para [21] of its decision, the Tribunal said:

“21.The Commissioner notes in his written submissions, correctly in my view, that the factors commonly taken into account in determining whether a person resides in a particular place include physical presence; nationality; history of residence and movements; habits and 'mode of life'; the frequency, regularity and duration of visits; the purpose of visits to or absences from a country; family and business ties with a country; and the maintenance of a place of abode in a country even when absent from that country.”

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