On 7 June 2023, the Australian Taxation Office (“ATO”) finalised Taxation Ruling 2023/1 Income tax: residency tests for individuals (“TR 2023/1”) outlining the Commissioner of Taxation’s (“Commissioner”) modernised interpretation of Australia’s tax residency rules along with contemporaneous examples.
This follows a period of public consultation after the issuance of draft ruling Draft Taxation Ruling 2022/D2 Income tax: residency tests for individuals (“TR 2022/D2”) released on 6 October 2022 (see GMS Flash Alert 2022-188, 18 October 2022).
TR 2023/1 consolidates and replaces the material in withdrawn:
- Taxation Rulings IT 2650 Income tax: residency ̶ permanent place of abode outside Australia;
- IT 2681 Income tax: residency status of business migrants; and
- TR 98/17 Income tax: residency status of individuals entering Australia on residency for individuals.
There are no changes to the current Australian tax legislation in relation to tax residency rules. However, recent case law such as, Harding1, Pike2, and Addy3 have been referenced in the ruling.