Bezuidenhout and Commissioner of Taxation
[2012] AATA 799
•15 November 2012
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2011/5525 & 5526 & 5527 & 5528
Taxation Appeals Division )
Re: Francois Bezuidenhout
Applicant
And: Commissioner of Taxation
Respondent
DIRECTION
TRIBUNAL: Senior Member Bernard J McCabe
DATE: 4 December 2012
PLACE: Brisbane
The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:
Where at paragraph ten the decision reads:
10. The taxpayer made the same mistake in relation to the 2006 and 2007 years of income, but he did not produce those returns until long after they were due. That means he is liable to pay an administrative penalty pursuant to s 284-75(3) of Schedule One to the Taxation Administration Act. The penalty for that failure is fixed at 75%: item 7 of s 284-90. The objection decision must therefore be affirmed in this respect.
The decision should now read:
10. The taxpayer did not produce returns in relation to the 2006 and 2007 years of income. That means he is liable to pay an administrative penalty pursuant to s 284-75(3) of Schedule One to the Taxation Administration Act. The penalty for that failure is fixed at 75%: item 7 of s 284-90. The objection decision must therefore be affirmed in this respect.
.........................[Sgd]..................................
Senior Member
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2011/5525&
5526&
5527&
5528
Taxation Appeals Division )
Re: Francois Bezuidenhout
Applicant
And: Commissioner of Taxation
Respondent
DIRECTION
TRIBUNAL: Senior Member Bernard J McCabe
DATE: 23 November 2012
PLACE: Brisbane
The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:
- Paragraphs 9, 10, 11 and 12 should now read;
9. The Commissioner says the taxpayer acted recklessly within the meaning of item 2 in s 280-90(1) of Schedule One to the Taxation Administration Act 1953 in relation to the 2008 year of income. The Commissioner refers to the fact the taxpayer had no clear evidentiary basis for making the claim. I agree with the Commissioner. There is no basis for believing the taxpayer was a foreign resident. The objection decision must therefore be affirmed in this respect.
10. The taxpayer made the same mistake in relation to the 2006 and 2007 years of income, but he did not produce those returns until long after they were due. That means he is liable to pay an administrative penalty pursuant to s 284-75(3) of Schedule One to the Taxation Administration Act. The penalty for that failure is fixed at 75%: item 7 of s 284-90. The objection decision must therefore be affirmed in this respect.
should the penalty be remitted in whole or in part?
11. The taxpayer did not refer to any matters or circumstances that would suggest his case was different or unusual. I was unable to discern anything that would justify remittal. The objection decision must therefore be affirmed to this extent.
conclusion
12. The objection decision with respect to the 2006, 2007 and 2008 years of income must be affirmed.
............................[Sgd]................................
Senior Member
[2012] AATA 799
Division TAXATION APPEALS DIVISION File Numbers
2011/5525
2011/5526
2011/55272011/5528
Re
Francois Bezuidenhout
APPLICANT
And
Commissioner of Taxation
RESPONDENT
Decision
Tribunal Senior Member Bernard J McCabe
Date 15 November 2012 Place Brisbane The objection decision is affirmed.
............................[Sgd]..................................
Senior Member Bernard J McCabe
Catchwords
TAXATION – objection decision – foreign sourced income – whether applicant was a foreign resident – objection decision affirmed.
Legislation
Income Tax Assessment Act 1936 (Cth) s 6
Taxation Administration Act 1953 (Cth) s 280-90
REASONS FOR DECISION
Senior Member Bernard J McCabe
15 November 2012
The taxpayer is a pilot who works overseas. He earned income from his foreign employer in the 2006, 2007 and 2008 years of income. The Commissioner says that income should be included in the taxpayer’s assessable income in Australia. The taxpayer says the income is foreign income because he was a foreign resident at the relevant times. He says that income should not be taxed here.
The Commissioner adds the taxpayer is liable to an administrative penalty on the shortfall calculated on the basis the taxpayer was reckless in complying with his obligations. The Commissioner also declined to remit the penalty in whole or in part.
After hearing from the parties, I indicated to the taxpayer at the hearing that I thought he would be unsuccessful. I explained to him the basis of my view, although I adjourned the matter without making a final decision because the Commissioner agreed to consider any claims for deductions the taxpayer might be in a position to make if the income in the relevant years was indeed to be taxed in Australia. The Commissioner was not obliged to extend that concession, as the time limit for making a claim had already passed, but he should be commended for extending the opportunity to the taxpayer in the circumstances. A timetable was agreed for making those claims. As the outcome of any decision in relation to the deductions is not before me, it is unnecessary for me to further delay the decision and reasons in this matter.
was the taxpayer an austalian resident for tax purposes?
The taxpayer was clearly an Australian resident for tax purposes in the years of income. He migrated to this country in 2005 with his family from the United Kingdom where he had been living after leaving Zimbabwe. He arrived here on a business migration permanent resident visa. In the visa application, he indicated a desire to live in Australia. He has subsequently applied for citizenship (albeit in 2010, after the years in question). He has a sister who resides here and his wife and children resided here full-time throughout the years of income. He retained private health cover in this country and opened Australian bank accounts and held an Australian drivers’ licence. He had an investment property here. He does not hold any assets elsewhere apart from a bank account in Jersey. The bulk of his remuneration from overseas employment was remitted to Australia to maintain his family.
The taxpayer worked (and works) overseas as a pilot. He explained in his evidence that he travels to a variety of locations as the pilot of a private aircraft. When he is in Saudi Arabia, where he is based, he has access to a one bedroom apartment although I formed the impression from the evidence it was still properly characterised as hotel-style accommodation. He stays in hotels at other locations when he travels. The transient nature of that accommodation must be contrasted with the settled nature of the accommodation and the permanent roots he put down in Australia during the years of income.
The taxpayer was away from Australia for work purposes for extended periods in the years of income in question. Records provided by the Commissioner suggest the taxpayer spent the majority of days in each year in Australia.
The taxpayer built a life in this country for himself and his family during the years of income in question. He leaves home for work for extended periods but that does not mean he resides elsewhere. He was clearly a resident within the meaning of s 6(1) of the Income Tax Assessment Act 1936 during the relevant years. He did not reside anywhere else. The evidence admits of no other conclusion, which means the objection decision must be affirmed in this respect.
administrative penalty
The taxpayer delayed filing his income tax returns in the years of income in question. He knew the Commissioner was of the view that he (the taxpayer) was an Australian resident and his foreign-sourced income should be taxed accordingly. He claimed to be a foreign resident, but – for the reasons I identified – that was a false statement. The false statement led to a substantial shortfall.
The Commissioner says the taxpayer acted recklessly within the meaning of item 2 in s 280-90(1) of Schedule One to the Taxation Administration Act 1953. The Commissioner refers to the fact the taxpayer had no clear evidentiary basis for making the claim. I agree with the Commissioner. There is no basis for believing the taxpayer was a foreign resident. The objection decision must therefore be affirmed in this respect.
should the penalty be remitted in whole or in part?
The taxpayer did not refer to any matters or circumstances that would suggest his case was different or unusual. I was unable to discern anything that would justify remittal. The objection decision must therefore be affirmed to this extent.
conclusion
The objection decision with respect to the 2006, 2007 and 2008 years of income must be affirmed.
I certify that the preceding 11 (eleven) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe. ...............................[Sgd]........................................
Associate
Dated 15 November 2012
Date of hearing 20 August 2012 Date final submissions received 11 October 2012 Applicant Self-represented Counsel for the Respondent Ms Conway Solicitors for the Respondent ATO Legal Services
0
0
0