What you need to know if you’re planning to move overseas from Australia for tax residency purposes
The decision to leave Australia for a long period is not an easy one to make.
There are many things you’ll need to consider, and as you’ll soon learn, your responsibilities don’t automatically cease the moment you step onto foreign soil. If you’re currently living abroad, stay up to date with your tax obligations by declaring yourself a resident or non-resident for tax purposes and prepare the relevant documentation to support your residency status.
KNOW YOUR STATUS – Here’s what you need to know !
Generally speaking, the primary test is called the “resides test”” which logically tries to determine where you actually reside.
This should be reasonably straight forward if you have departed Australia permanently (with your family if you have one), or have taken on employment overseas and reside there for an extended period (bear in mind that there are numerous other factors to take into account and seek professional advice).
If there are questions about your “resides”test, the ATO will consider you to be an Australian resident if you satisfy one of the three statutory tests :
- The domicile test: You’re an Australian resident if your domicile (broadly, the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.
- The 183-day test: If you’re actually present in Australia for more than half the income year, whether continuously or with breaks, you may be said to have a constructive residence in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here.
- The superannuation test: This test applies to Australian government employees working at Australian posts overseas and who are members of the CSS or PSS schemes. It does not apply to members of the PSSAP scheme.
You can also refer to case law as there are numerous cases that show how these test are applied and that there are grey areas where people travel abroad but fail to cut their connection with Australia such as ZKBN and Commissioner of Taxation  AATA604 (27 August 2013)
This is an area that requires some consideration as simply moving from Australia does not necessarily mean you have changed tax residency as a consequence of this.
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