No Australian tax break for international posting

 

The AAT has affirmed that a taxpayer remained a “resident of Australia” as defined in section 6(1) of the ITAA 1936 for the duration of their international posting to the United Arab Emirates, pursuant to the ‘ordinary concepts’ and ‘domicile’ tests of Australian tax residency. In reaching its decision, the Tribunal considered the taxpayer’s numerous ties to Australia, including that the taxpayer:

• continued to own and pay the costs associated with a family home where at least one of his daughters resided rent-free throughout the relevant income years;
• would always use his leave periods to return to Australia to stay with his family in the family home (other than one leave period where the family holidayed outside Australia);
• intended to return to Australia to retire after the expiration of his overseas posting;
• had maintained vehicle registrations and his Australian drivers licence, which allowed him to seamlessly return to using his Australian vehicles whenever he returned to Australia;
• held a visa and accommodation in the UAE which were tied to the length of his employment assignment;
• had failed to demonstrate he had any connection to the UAE other than his employment; and
• had maintained his Australian health insurance throughout the duration of his overseas posting.

As such, the AAT affirmed the relevant objection decisions under review.

 

For more information, view the Quy v Commissioner of Taxation [2024] AATA 245 case or contact our office at 9721 1055.

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