Miscellaneous 2023

What is the future of individual tax residence under the proposed rules?

Source: Australian Tax Forum Journal Article

Published Date: 1 Mar 2023


This article focuses on an analysis of the proposed rewrite of the residence rules for individual taxpayers in Australia. We evaluate whether the proposed rules are more aligned with the tax policy objectives of simplicity, certainty, equity, and integrity than the current law, by applying them to the facts of some key individual residence cases and comparing the approach and outcomes with the current law. The proposed rules appear to increase the incidence of taxpayers who would become residents, which, arguably, alters Australia's jurisdictional claim. The "borderline" cases on residence, that are the subject of litigation, may persist in the event of the new rules being implemented. Furthermore, litigation in a particular area of tax law is not, of itself, evidence of complexity in that area. Although simplicity is a goal of tax policy, the tax reform process in Australia has typically proceeded on an incremental basis. Implementation of a completely new set of rules may increase uncertainty and add to complexity. It would also require taxpayers, tax practitioners and the tax administration to become well acquainted with a new set of rules. By comparing the current law with the proposed rules, one of the contributions of the research may be to promote debate and discussion about alternative reform pathways.

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  • Published By: John Minas
  • Published On:1 Mar 2023

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Miscellaneous 2023

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