Residency and Australians working overseas: can be an expensive lesson in tax law

Copyright © 2015 LexisNexis. This article is made available per the publisher's Content Sharing policy.Residence is important in determining the Australian income tax liability for individuals that are residents (all income sources) and foreign residents (Australian income sources) of ordinary and statutory income.1 In recent times the Australian Taxation Office (ATO) appears to be taking a tough stance on the residence of Australian citizens who travel overseas to work for a period of time, especially where that work is undertaken in countries with low income tax rates. This is evident in a number of cases that have recently been decided by the Administrative Appeals Tribunal (AAT) on the issue of residence. These cases highlight significant scrutiny by the ATO and the need for such workers to obtain good tax advice, and provide sufficient documentary evidence for the ATO or the AAT as this may be needed to establish the relevant facts