If you are living and conducting a business outside of Australia, you may still be liable to pay tax to the Australian Government if you are considered to be a “resident” for tax purposes.
Who is a Resident?
Essentially a “resident of Australia” or “resident” for the purposes of the Income Tax Assessment Act 1936 (1936 Act) is a person whose domicile is in Australia unless the Commissioner is satisfied that the person’s permanent place of abode is outside Australia.
What is a Permanent Place of Abode?
In the recent Federal Court of Australia decision of Harding v Commissioner of Taxation the concept of “permanent place of abode” was discussed at length.
The key features of that case were:
- ✔ the appellant was an Australian citizen who had lived outside of Australia for 17 years of the previous 20 years (specifically in Bahrain to commute to his work in Saudi Arabia)
- ✔ in the prior court decision, the primary judge: