All Aussie Related Stuff (excluding the old age pension)

[4MyEgo]

31 minutes ago, ThaiBunny said:

Tax Treaties trump legislation and always have

 

Words, that's all I hear, no link to suggest what you are saying is true.

[ThaiBunny]

 
Words, that's all I hear, no link to suggest what you are saying is true.

Fair enough, I’m only a former registered tax agent so by this stage if I were still working I’d have the meter running. As I’ve retired I’ll happily leave it those who can bothered. I’ve given my considered professional opinion - take it or leave it

[4MyEgo]

33 minutes ago, ThaiBunny said:

Fair enough, I’m only a former registered tax agent so by this stage if I were still working I’d have the meter running. As I’ve retired I’ll happily leave it those who can bothered. I’ve given my considered professional opinion - take it or leave it

 

I too am a retired professional, and whilst I provide my opinion or information to TVF members, usually regarding property matters that are constantly changing back in Oz, or Legislation/Acts that I know or follow, I usually back it up with a link so that those members can see and read the links for themselves and make further enquiries with their qualified accountants, as I always advise them to do, anything short of that would be reckless as a retired professional, suffice to say, if I wasn't a retired professional, I wouldn't bother, but professionals retired or not should show credibility IMO.

 

As for turning on my metre, I consider the simple task of copying and pasting the links to be effortless, but each to their own, as they say.

[stud858]

https://www.ato.gov.au/General/International-tax-agreements/

[4MyEgo]

On 10/1/2018 at 8:48 PM, stud858 said:

https://www.ato.gov.au/General/International-tax-agreements/

 

Exactly what I thought, the double tax treaty does not refer to non residents as Australian residents for tax purposes if they are making an income from Australia or overseas for that matter, as I mentioned previously, perhaps either stud858 who provided the link or ThaiBunny, the latter suggested it does would like to elaborate, but I doubt it, as it would be virtually impossible to provide any link to discredit what I am saying, i.e. non residents pay tax as non residents and do not fall under the double tax treaty, to go further any income sourced from Australia while you are a non resident is taxed at 32.5c in every $, below is just the tip of the iceberg if you haven't got your head in the sand, buy as a former tax agent, one would assume that you would know that?

 

https://www.ato.gov.au/rates/individual-income-tax-rates/

 

Foreign residents

These rates apply to individuals who are foreign residents for tax purposes.

Foreign resident tax rates 2018–19

Foreign resident tax rates 2018–19

Taxable income	Tax on this income
0 – $90,000	32.5c for each $1
$90,001 – $180,000	$29,250 plus 37c for each $1 over $90,000
$180,001 and over	$62,550 plus 45c for each $1 over $180,000

The above rates include changes implementing changes announced in the 2018-19 

 

 https://www.ato.gov.au/individuals/international-tax-for-individuals/work-out-your-tax-residency/

Residency and tax

If you're a foreign resident for tax purposes you must declare on your tax return any income earned in Australia, including:

• employment income
• rental income
• Australian pensions and annuities
• capital gains on Australian assets.

The capital gain on your Australian home may need to be included if you are a foreign resident at the time you sign the contract of sale.

 

If no reply by either stud858 who provided the link or ThaiBunny, then I will rest my case.

[ThaiBunny]

I could not care less whether posters accept my opinion or otherwise but I’ll state it one more time. ALL of Australia’s Double Tax Treaties include the same tie-breaker rule. It goes something like this: if you physically reside in one Treaty country but all of your income is sourced and taxed by the other Treaty country, then you are a tax resident of the country where you pay tax. That is especially true if you have permanent residence or citizenship under the immigration laws of the Treaty country where you pay tax. In the Thailand treaty this is what Article 4 Para (3)© and Para 4 taken together mean


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[ThaiBunny]

And if you’re tax resident in Australia and have no Thai income then the rest of the Treaty is irrelevant to you because it is designed to set out the rules for those who have both Australian AND Thai income. You are therefore subject to the standard rules of the Income Tax Assessment Act and nothing else


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[Will27]

1 hour ago, ThaiBunny said:

I could not care less whether posters accept my opinion or otherwise but I’ll state it one more time. ALL of Australia’s Double Tax Treaties include the same tie-breaker rule. It goes something like this: if you physically reside in one Treaty country but all of your income is sourced and taxed by the other Treaty country, then you are a tax resident of the country where you pay tax. That is especially true if you have permanent residence or citizenship under the immigration laws of the Treaty country where you pay tax. In the Thailand treaty this is what Article 4 Para (3)© and Para 4 taken together mean


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My (basic) understanding of the tax treaty is so you don't get taxed in both countries.

 

So Fred Bloggs who lives in Thailand but has his income derived from Australia, get's taxed

by Australia.

 

IMO, he still has to determine if he is a resident or non-resident.

[ThaiBunny]

Yes they’re called “Double Tax Treaties” because their purpose is to ensure that the same income is not taxed twice. I’m not sure why you believe Fred Bloggs has to decide anything. The Treaty states unambiguously that he is a tax resident of Australia even though a physical resident of Thailand, assuming he has some sort of legal status in Australia such as citizen.

 

The purpose of all the recent rules about tax residence that have all the bush lawyers here quivering with excitement is because some Australians are working overseas in low tax jurisdictions such as Dubai and claiming that they have ceased to be tax residents of Australia because they are tax residents of that low-tax jurisdiction.

 

That’s got nothing to do with a standard Australian retiree living in Thailand, deriving little or no income in Thailand, not claiming to be a tax resident of Thailand and living off his Australian pension or superannuation.

 

[Will27]

53 minutes ago, ThaiBunny said:

Yes they’re called “Double Tax Treaties” because their purpose is to ensure that the same income is not taxed twice. I’m not sure why you believe Fred Bloggs has to decide anything. The Treaty states unambiguously that he is a tax resident of Australia even though a physical resident of Thailand, assuming he has some sort of legal status in Australia such as citizen. 

 

The purpose of all the recent rules about tax residence that have all the bush lawyers here quivering with excitement is because some Australians are working overseas in low tax jurisdictions such as Dubai and claiming that they have ceased to be tax residents of Australia because they are tax residents of that low-tax jurisdiction.

 

That’s got nothing to do with a standard Australian retiree living in Thailand, deriving little or no income in Thailand, not claiming to be a tax resident of Thailand and living off his Australian pension or superannuation.

 

Because it also states on the ATO residency calculator, "if you leave Australia permanently, you're generally treated as a foreign

resident for tax purposes".

 

I know some will argue on here about the word "permanently".

[stud858]

2 hours ago, Will27 said:

know some will argue on here about the word "permanently".

I think "permanently" is well defined and understood, but the issue with the word is it involves future time.  And because I can't travel in time to know anything for sure it's always a grey area. I think  evidence is required to support a permanent departure. Eg. Selling of a house. 

 

[ThaiBunny]

Don’t know how many times I have to say this - the Residency Calculator is irrelevant because in tax law Tax Treaties trump legislation - but I guess that will never satisfy the bush lawyers here


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[Will27]

20 hours ago, ThaiBunny said:

And if you’re tax resident in Australia and have no Thai income then the rest of the Treaty is irrelevant to you because it is designed to set out the rules for those who have both Australian AND Thai income. You are therefore subject to the standard rules of the Income Tax Assessment Act and nothing else


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So are you saying that the treaty wouldn't apply to someone whose only income is derived in Australia?

 

That would be the vast majority of retiree's I would imagine.

[ThaiBunny]

You HAVE to be a tax resident of somewhere. Far better minds than any of us have spent a lot of consulting money attempting to be tax resident nowhere. So all of those bush lawyers here who are desperately attempting to prove they are no longer tax resident in Australia have one very very simple question to answer - since “nowhere” is not an answer, where exactly do you believe you are tax resident (and why)?


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[Will27]

6 minutes ago, ThaiBunny said:

You HAVE to be a tax resident of somewhere. Far better minds than any of us have spent a lot of consulting money attempting to be tax resident nowhere. So all of those bush lawyers here who are desperately attempting to prove they are no longer tax resident in Australia have one very very simple question to answer - since “nowhere” is not an answer, where exactly do you believe you are tax resident (and why)?


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Most of the people on here are saying they're a resident of Australia for tax purposes, not a non-resident,

because of the obvious tax benefits.

 

I think from memory, 4MyEgo is the only one who has declared himself as a non-resident.

 

The main argument on here is residency.

 

[ThaiBunny]

And ain’t 4MyEgo an appropriate handle! [emoji85]


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[4MyEgo]

On 10/4/2018 at 2:48 PM, ThaiBunny said:

It goes something like this: if you physically reside in one Treaty country but all of your income is sourced and taxed by the other Treaty country, then you are a tax resident of the country where you pay tax. That is especially true if you have permanent residence or citizenship under the immigration laws of the Treaty country where you pay tax. In the Thailand treaty this is what Article 4 Para (3)© and Para 4 taken together mean

Totally disagree with what you are saying above.

 

These are extracts from the treaty:

 

Article 4 3. Where by reason of the preceding provisions, which would be 2. below

 

2. A person is not a resident of a Contracting State for the purposes of this Agreement if the person is liable to tax in that State in respect only of income from a source in that State.

 

From where I am coming coming from emphasis should be placed on 2, i.e. I derive an income from Australia and I live here in Thailand, I do not have an income in Thailand, therefore I am a non resident of Australia.

 

3. Where by reason of the preceding provisions, an individual is a resident of both Contracting States, the status of the person shall be determined in accordance with the following rules, applied in the order in which they are set out:

 

(a) the person shall be deemed to be a resident solely of the Contracting State in which a permanent home is available to the person; (b) if a permanent home is available to the person in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State in which the person has an habitual abode; (c) if the person has an habitual abode in both Contracting States, or in neither of them, the person shall be deemed to be a resident solely of the Contracting State with which the person's personal and economic relations are the closer.

 

4. For the purposes of the last preceding paragraph, an individual’s citizenship or nationality of a Contracting State shall be a factor in determining the degree of the person’s personal and economic relations with that Contracting State.

 

5. Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident solely of the Contracting State in which it is incorporated, created or organized.

 

I have put the rest in above that you have quoted in your post, make of it what you will, to add to this, anyone with half a brain knows that if they walked into a Centrelink office after being away for more than say two years living abroad and has reached the pension age, has to remain in Australia for two years before their pension can be made portable, why, because Centrelink would deem them as having been a non resident prior to reaching their pension age, why because they lived overseas. What would you do then, argue with them over the treaty ?, yep, good luck on that one.

 

We all know that residency is done on an individual basis and what 3 criteria we can all fall under which the ATO set out in their website, from appeals and legislation I have read, etc etc and I have not once read anywhere stating that the treaty overrides the legislation, no court case suggesting that anyone who went to court or appealed put forward the treaty, wonder why, could it be that the treaty doesn't trump legislation as you have suggested, again, TVF members only have your word as a retired tax agent to go on, no link suggestion such evidence, or clarification.

 

I welcome all TVF reading this to check with their accountant and please do come back to me with their advice, i.e. are you a resident or a non resident for tax purpose and would more interested to see what they think of the tax treaty between Australia and Thailand if you are living here, and if indeed it makes you a resident for tax purposes if you living here.

Edited October 5, 2018 by 4MyEgo

[4MyEgo]

1 hour ago, ThaiBunny said:

And ain’t 4MyEgo an appropriate handle!


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The handle you are referring too, got lots of attention as a number plate in NSW Australia as it was fixed to a white Silver Shadow 1976 Rolls Royce ????????????????????

[4MyEgo]

2 hours ago, ThaiBunny said:

You HAVE to be a tax resident of somewhere. Far better minds than any of us have spent a lot of consulting money attempting to be tax resident nowhere. So all of those bush lawyers here who are desperately attempting to prove they are no longer tax resident in Australia have one very very simple question to answer - since “nowhere” is not an answer, where exactly do you believe you are tax resident (and why)?

 

1 hour ago, Will27 said:

Most of the people on here are saying they're a resident of Australia for tax purposes, not a non-resident,

because of the obvious tax benefits.

 

I think from memory, 4MyEgo is the only one who has declared himself as a non-resident.

 

The main argument on here is residency.

I only declared myself as a non resident because that was the advice of my accountant of 32 years at the time, the ATO and what I had read, i.e. ATO website, legislation, court cases and appeals.

 

For me, it has worked out well, as I pay zero tax in Australia on shares and dividends that are (fully franked), although I do pay 10% withholding tax from interest earned from banks, and of course I pay 32.5c in every $ I earn from some occasional consultancy work that comes in from Australia, and as much as I don't want to do it, it takes little time, and pays well even after tax when converting the fee to what it costs to live here, and the work keeps me up to date with things in my once chosen professional field by still doing it, although I will say no to the work soon I hope as I am supposed to be retired 3 years now. 

 

From my perspective I see no benefit in trying to keep my residency: I mean;

 

what do I miss out on:

 

Medicare, well not paying the 2% levy + 1% extra levy surcharge leaves me change after paying for private cover here

 

Voting rights taken away, well haven't like the major parties for a while and believe Australia is no longer the lucky country unless your an immigrant just arriving with 4 wives and $hit load of kids, because the government with throw taxpayer $'s at yah

 

The tax threshold of $18,200 for the small amount of consultancy work that I do per annum, well wasn't supposed be getting any, so I am still 67.5% ahead of what I make the way I see it

 

Pension, forget that, well over the threshold for assets and the two year rule to sit it out wouldn't be feasible as it would take you 4 years to re-coupe the outlay to go and live there

 

What would I get if I retaining my residency ?

 

I would have to pay tax on shares after the $18,200 threshold and pay capital gains tax on shares as well

 

Pay the Medicare levies

 

Vote

 

Live in a very expensive country or is that controlled state, where there are all types of cameras lurking out there to catch you speeding ?

[4MyEgo]

4 hours ago, ThaiBunny said:

Don’t know how many times I have to say this - the Residency Calculator is irrelevant because in tax law Tax Treaties trump legislation - but I guess that will never satisfy the bush lawyers here

That's because some of us "bush lawyers" as you refer to us, actually read, digest and work out what residency status we have, if you think your an Australian Resident for tax purposes, that's fine, but don't be gettin all cocky and go telling everyone that because your a former tax agent, everyone is a tax resident of Australia for tax purposes because of the treaty between Australia and Thailand as you will be misleading people.

 

As I have always said to TVF members, get your accountants to qualify your residency status too you, as opposed to some wanna be bush lawyer...lol

 

[MikeN]

Can somebody give me a simple, direct link to the tax treaty that everybody is quoting, please. Cos all the ones that I can find just seem to go around in circles and never end up at the actual document.

[4MyEgo]

On 10/1/2018 at 8:48 PM, stud858 said:

https://www.ato.gov.au/General/International-tax-agreements/

The biggest problem I find with most blokes is that they have their heads in the sand because that's what they believe suits them, i.e. until the ATO pulls it out if ever audited. Just one case copied and pasted for you, have a good read, and in particular of what the Federal Court said on appeal about an abode not having to be forever, regardless of having a property back in Australia. I have also attached the full legislation and court cases for you, as I have done previously, and I am not going to pull your head out of the sand, "up to you" as they say, but you know what you residency is for tax purposes.

 

"Permanent"

13. The leading case on whether a permanent place of abode is outside Australia is F.C. of T. v. Applegate (79 ATC 4307; (1979) 9 ATR 899). The taxpayer, whose domicile was in Australia, had been sent by his employer, a firm of solicitors, to establish a branch office in Vila, New Hebrides. His absence was to be for an indefinite period in the sense that the period was not specified or defined but it was expected that it would be of a substantial length. It was also expected that later he would be recalled to Australia. In fact, he returned to Australia after 2 years, his stay being cut short by illness. The taxpayer claimed that the salary he earned in Vila was exempt from Australian tax being income derived by a non-resident from sources wholly out of Australia. In that case, it was decided that, because the taxpayer could not be considered to have resided in Australia under the ordinary meaning of the word "reside", the extended definition of "resident" contained in paragraph (a)(i) had to be considered. Both the Supreme Court of New South Wales and, on appeal, the Full Court of the Federal Court of Australia held that the taxpayer had a permanent place of abode outside Australia. He was therefore a non-resident in the year of income concerned.

14. The Federal Court rejected the Commissioner's argument that a permanent place of abode outside Australia required an intention to live outside Australia indefinitely without any intention of returning to live in Australia in the foreseeable future, other than at some remote, albeit specific, point of time. The Court said that the term "permanent" must be interpreted in the context in which it appears. The Court said that in its context in the "resident" definition a permanent place of abode does not have to be "everlasting" or "forever". It means something less than a permanent place of abode in which a person intends to live for the rest of his or her life. It should be contrasted with a temporary or transitory place of abode outside Australia. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his or her usual place of abode. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a "permanent place of abode" elsewhere. The Federal Court also found that the taxpayer's intention regarding the duration of his stay overseas was only one relevant factor to be taken into account. Of more importance is the nature and quality of use which the taxpayer makes of a particular place of abode overseas.

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

[4MyEgo]

On 10/5/2018 at 5:30 PM, MikeN said:

Can somebody give me a simple, direct link to the tax treaty that everybody is quoting, please. Cos all the ones that I can find just seem to go around in circles and never end up at the actual document.

As you requested:

 

http://www.austlii.edu.au/au/other/dfat/treaties/1989/36.html

[Will27]

10 minutes ago, 4MyEgo said:

The biggest problem I find with most blokes is that they have their heads in the sand because that's what they believe suits them, i.e. until the ATO pulls it out if ever audited. Just one case copied and pasted for you, have a good read, and in particular of what the Federal Court said on appeal about an abode not having to be forever, regardless of having a property back in Australia. I have also attached the full legislation and court cases for you, as I have done previously, and I am not going to pull your head out of the sand, "up to you" as they say, but you know what you residency is for tax purposes.

 

"Permanent"

13. The leading case on whether a permanent place of abode is outside Australia is F.C. of T. v. Applegate (79 ATC 4307; (1979) 9 ATR 899). The taxpayer, whose domicile was in Australia, had been sent by his employer, a firm of solicitors, to establish a branch office in Vila, New Hebrides. His absence was to be for an indefinite period in the sense that the period was not specified or defined but it was expected that it would be of a substantial length. It was also expected that later he would be recalled to Australia. In fact, he returned to Australia after 2 years, his stay being cut short by illness. The taxpayer claimed that the salary he earned in Vila was exempt from Australian tax being income derived by a non-resident from sources wholly out of Australia. In that case, it was decided that, because the taxpayer could not be considered to have resided in Australia under the ordinary meaning of the word "reside", the extended definition of "resident" contained in paragraph (a)(i) had to be considered. Both the Supreme Court of New South Wales and, on appeal, the Full Court of the Federal Court of Australia held that the taxpayer had a permanent place of abode outside Australia. He was therefore a non-resident in the year of income concerned.

14. The Federal Court rejected the Commissioner's argument that a permanent place of abode outside Australia required an intention to live outside Australia indefinitely without any intention of returning to live in Australia in the foreseeable future, other than at some remote, albeit specific, point of time. The Court said that the term "permanent" must be interpreted in the context in which it appears. The Court said that in its context in the "resident" definition a permanent place of abode does not have to be "everlasting" or "forever". It means something less than a permanent place of abode in which a person intends to live for the rest of his or her life. It should be contrasted with a temporary or transitory place of abode outside Australia. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his or her usual place of abode. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a "permanent place of abode" elsewhere. The Federal Court also found that the taxpayer's intention regarding the duration of his stay overseas was only one relevant factor to be taken into account. Of more importance is the nature and quality of use which the taxpayer makes of a particular place of abode overseas.

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

It's pretty easy to get caught up with all of the legal definitions and then to read into it what you want.

 

At the end of the day though, I reckon it's pretty simple.

In most cases, If you're living in Thailand fulltime and only go back to Oz

spasmodically, you're pretty much a non-resident.

[Peterw42]

1 hour ago, 4MyEgo said:

The biggest problem I find with most blokes is that they have their heads in the sand because that's what they believe suits them, i.e. until the ATO pulls it out if ever audited. Just one case copied and pasted for you, have a good read, and in particular of what the Federal Court said on appeal about an abode not having to be forever, regardless of having a property back in Australia. I have also attached the full legislation and court cases for you, as I have done previously, and I am not going to pull your head out of the sand, "up to you" as they say, but you know what you residency is for tax purposes.

 

"Permanent"

13. The leading case on whether a permanent place of abode is outside Australia is F.C. of T. v. Applegate (79 ATC 4307; (1979) 9 ATR 899). The taxpayer, whose domicile was in Australia, had been sent by his employer, a firm of solicitors, to establish a branch office in Vila, New Hebrides. His absence was to be for an indefinite period in the sense that the period was not specified or defined but it was expected that it would be of a substantial length. It was also expected that later he would be recalled to Australia. In fact, he returned to Australia after 2 years, his stay being cut short by illness. The taxpayer claimed that the salary he earned in Vila was exempt from Australian tax being income derived by a non-resident from sources wholly out of Australia. In that case, it was decided that, because the taxpayer could not be considered to have resided in Australia under the ordinary meaning of the word "reside", the extended definition of "resident" contained in paragraph (a)(i) had to be considered. Both the Supreme Court of New South Wales and, on appeal, the Full Court of the Federal Court of Australia held that the taxpayer had a permanent place of abode outside Australia. He was therefore a non-resident in the year of income concerned.

14. The Federal Court rejected the Commissioner's argument that a permanent place of abode outside Australia required an intention to live outside Australia indefinitely without any intention of returning to live in Australia in the foreseeable future, other than at some remote, albeit specific, point of time. The Court said that the term "permanent" must be interpreted in the context in which it appears. The Court said that in its context in the "resident" definition a permanent place of abode does not have to be "everlasting" or "forever". It means something less than a permanent place of abode in which a person intends to live for the rest of his or her life. It should be contrasted with a temporary or transitory place of abode outside Australia. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his or her usual place of abode. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a "permanent place of abode" elsewhere. The Federal Court also found that the taxpayer's intention regarding the duration of his stay overseas was only one relevant factor to be taken into account. Of more importance is the nature and quality of use which the taxpayer makes of a particular place of abode overseas.

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

 

There is an aspect of tax avoidance in the example. 

 

"The taxpayer claimed that the salary he earned in Vila was exempt from Australian tax being income derived by a non-resident from sources wholly out of Australia."

 

Its not a case of determining res/non-res for what tax rate to pay, its a case of arguing for no tax. The court case isnt looking at aust income/tax verses no foreign income etc. I imagine its a completely different senario arguing res/non-res for someone with no foreign income and an aust income and already paying tax. Most of us are not disputing paying tax, only the rate.

Would the case and outcome be different if a tax treaty exsisted between Australia/Vanuatu?

Chances are it wouldn't of gone to court as already defined in a treaty. (thats the whole idea of treaties)

 

I dont get what the ATO gained from the example, the taxpayer argued non resident and foreign income (not taxable in Aust), the courts agreed, ATO got no tax.

 

 

 

Edited October 7, 2018 by Peterw42

[4MyEgo]

3 hours ago, Will27 said:

It's pretty easy to get caught up with all of the legal definitions and then to read into it what you want.

 

At the end of the day though, I reckon it's pretty simple.

In most cases, If you're living in Thailand fulltime and only go back to Oz

spasmodically, you're pretty much a non-resident.

[4MyEgo]

2 hours ago, Peterw42 said:

I dont get what the ATO gained from the example, the taxpayer argued non resident and foreign income (not taxable in Aust), the courts agreed, ATO got no tax.

Australian residents are taxed on their worldwide income, if the court deemed that the person in the case was a non resident and earned money outside of Australia, then he wouldn't have to pay tax, as the income he derived was outside of Australia, if he was deemed a non resident and earned an income from within Australia excluding fully franked shares, he would be taxed at 32.5% as I have been doing consultancy work.

 

I suppose the ATO was trying to establish that he was an Australian Resident for tax purposes so as to get their hands on his worldwide income, but failed as you say they didn't get anything.

 

Establishing residency is not cut and dry and as Will27 said, if you are living in Thailand for most of your time and return spasmodically, your a non resident for tax purposes of which I applauded too.

[stud858]

4 hours ago, 4MyEgo said:

The biggest problem I find with most blokes is that they have their heads in the sand because that's what they believe suits them, i.e. until the ATO pulls it out if ever audited. Just one case copied and pasted for you, have a good read, and in particular of what the Federal Court said on appeal about an abode not having to be forever, regardless of having a property back in Australia. I have also attached the full legislation and court cases for you, as I have done previously, and I am not going to pull your head out of the sand, "up to you" as they say, but you know what you residency is for tax purposes.

 

"Permanent"

13. The leading case on whether a permanent place of abode is outside Australia is F.C. of T. v. Applegate (79 ATC 4307; (1979) 9 ATR 899). The taxpayer, whose domicile was in Australia, had been sent by his employer, a firm of solicitors, to establish a branch office in Vila, New Hebrides. His absence was to be for an indefinite period in the sense that the period was not specified or defined but it was expected that it would be of a substantial length. It was also expected that later he would be recalled to Australia. In fact, he returned to Australia after 2 years, his stay being cut short by illness. The taxpayer claimed that the salary he earned in Vila was exempt from Australian tax being income derived by a non-resident from sources wholly out of Australia. In that case, it was decided that, because the taxpayer could not be considered to have resided in Australia under the ordinary meaning of the word "reside", the extended definition of "resident" contained in paragraph (a)(i) had to be considered. Both the Supreme Court of New South Wales and, on appeal, the Full Court of the Federal Court of Australia held that the taxpayer had a permanent place of abode outside Australia. He was therefore a non-resident in the year of income concerned.

14. The Federal Court rejected the Commissioner's argument that a permanent place of abode outside Australia required an intention to live outside Australia indefinitely without any intention of returning to live in Australia in the foreseeable future, other than at some remote, albeit specific, point of time. The Court said that the term "permanent" must be interpreted in the context in which it appears. The Court said that in its context in the "resident" definition a permanent place of abode does not have to be "everlasting" or "forever". It means something less than a permanent place of abode in which a person intends to live for the rest of his or her life. It should be contrasted with a temporary or transitory place of abode outside Australia. It connotes a more enduring relationship with the particular place of abode than that of a person who is ordinarily resident there or who has there his or her usual place of abode. An intention to return to Australia in the foreseeable future to live does not prevent the taxpayer in the meantime setting up a "permanent place of abode" elsewhere. The Federal Court also found that the taxpayer's intention regarding the duration of his stay overseas was only one relevant factor to be taken into account. Of more importance is the nature and quality of use which the taxpayer makes of a particular place of abode overseas.

 

http://www.austlii.edu.au/cgi-bin/sinodisp/au/other/rulings/ato/ATOITR/1991/itr1991-2650/itr1991-2650.html?stem=0&synonyms=0&query=overseas abode

I posted the link to support whichever opinion anybody has and how they can justify it. Your example runs true with ato website rules and nothing out of the ordinary in my opinion. Somebody living outside of Australia and working at the same time is possibly seen as non resident for tax. I try not to have my head in sand. I gather the facts and make a reasonable determination. I can determine my own status on my circumstance and it's up to each individual to seek out the facts for their own status,   hence the official link I posted. 

 

[stud858]

4 hours ago, Will27 said:

It's pretty easy to get caught up with all of the legal definitions and then to read into it what you want.

 

At the end of the day though, I reckon it's pretty simple.

In most cases, If you're living in Thailand fulltime and only go back to Oz

spasmodically, you're pretty much a non-resident.

I think the opposite the way to you when I read the rules.  I feel it's pretty hard for ato to reclassify an Aussie as a NR. But the ato will end up Deciding if they need to.  Otherwise,  that's what is so cool,  we can decide ourselves with no ato interventions. Those who have a lot of tax implications have more to worry about.  Luckily,  I'm  a poor penniless person. A ppp.

 

[4MyEgo]

1 hour ago, stud858 said:

I posted the link to support whichever opinion anybody has and how they can justify it. Your example runs true with ato website rules and nothing out of the ordinary in my opinion. Somebody living outside of Australia and working at the same time is possibly seen as non resident for tax. I try not to have my head in sand. I gather the facts and make a reasonable determination. I can determine my own status on my circumstance and it's up to each individual to seek out the facts for their own status,   hence the official link I posted.