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ARTICLE · 08 SEPTEMBER 2021

Proposed changes to the tax residency provisions for individuals explained

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The Government mentioned that the proposed rules will be based on recommendations made by the Board of Taxation (BOT).

AustraliaTax
Varun Kumar
Varun Kumar
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Recently, the Government announced that it would "modernise" the individual tax residency provisions in the 2021-22 Federal Budget. Whilst we are yet to see any draft legislation in relation to this, the Government did mention that the rules will be based on the recommendations made by the Board of Taxation (BOT) which we have summarised below.

PROBLEMS WITH OUR CURRENT RULES

Our current residency provisions are principle based and generally require a detailed analysis of current case law which often leads to confusion and incorrect application of our residency tests.

Currently, individuals are considered tax residents of Australia if they pass any of the following tests:

  • The individual resides in Australia according to ordinary concepts; or

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