Are You a Resident for Australian Tax Purposes?

Determining whether you are a tax resident in Australia involves more than the commonly known 183-day test. There are a few other tests.

The primary test of tax residency is called the ‘resides test‘. If you reside in Australia, you are considered an Australian resident for tax purposes and don’t need to apply any of the other residency tests.

If you don’t satisfy the resides test, you’ll still be considered an Australian resident if you satisfy one of three statutory tests:

  • The domicile test: You’re an Australian resident if your domicile (broadly, the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.
  • The 183-day test: If you’re actually present in Australia for more than half the income year, whether continuously or with breaks, you may be said to have a constructive residence in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here.
  • The superannuation test: This test ensures that Australian government employees working at Australian posts overseas are treated as Australian residents.

The ‘resides test‘ may involve ATO taking into account any or all of the following factors in determining where you reside:

  • intention or purpose of presence
  • family and business/employment ties
  • maintenance and location of assets
  • social and living arrangements.

This is where it seems that a Malaysian tycoon ended up in a quandary. ATO deems him to be tax resident while he believes he is not due to living in Australia for only short periods and below the 183 days per year. The case is still ongoing as of the date that this blog post was written.

Further information on ATO’s website:

ATO Residency Tests
Residency – Resides Test

The Star News Articles:

Malaysian timber tycoon in RM160mil Australian tax quandary
Malaysian timber tycoon sues Australian government in tax dispute

Sabrina Ong is a partner at Fortiz Accountants. If you are migrating from Malaysia to Australia, a Malaysian entrepreneur planning to start a business in Australia or a recent migrant from Malaysia, make an appointment at either one of our offices to find out how we can assist you.

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