Thursday, June 18, 2015

Clemens vs Federal Commissioner of Taxation [2015] AATA 124

In this case a backpacker (Maximillian Clemens) was found to be non-resident despite travelling and working around Australia for more than half of the year (183 days).  This was because his usual place of abode was found to be in Germany, rather than Australia.  The judge determined that for Mr Clemens to claim tax residency status in Australia, before leaving home he was required to completely abandon his parents' German residence, and upon arrival in Australia, to reside in a dwelling of some quality and permanence.

Deputy President of the AAT R Deutsch:

"In my view it is not possible to have two or more usual places of abode at the same time. Where there are two competing places of abode it needs to be assessed based on all the available facts as to which one is “usual”. "
  (p 37)

"Nonetheless this Tribunal concludes that during the whole of the year ended 30 June 2013, the Applicants’ usual place of abode was his parents' house in Germany. "  (p 40)

"While the Parliamentary intentions are not always relevant to examine it is worth noting that the various qualifications to the 183 day rule were enacted by Parliament “in order that there may be no danger of treating as residents persons who are purely visitors”: Explanatory Notes on Amendments contained in the Income Tax Assessment Bill 1930 to amend the Income Tax Assessment Act 1922-29, page 11. Thus, overseas visitors on holidays or working in Australia who are in Australia for more than 183 days would not be residents during their stay under this test, as they would usually have a usual place of abode elsewhere and would not have an intention of taking up residence in Australia."  (p 48)

"This lends support to the conclusions I have reached. It is only if the Applicant had completely abandoned his usual place of abode overseas in Germany during the year ended 30 June 2013 that the result might be otherwise."  (p 49)


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