CHRISTOPHER NORDERN and COMMISSIONER OF TAXATIONOMMISSIONER OF TAXATION Senior Member C R Walsh 11 April 2013 2 May 2013 Perth
[2013] AATA 271
[2013] AATA 271
Division TAXATION APPEALS DIVISION
TAXATION APPEALS DIVISION File Number(s) 2012/3710
2012/3710
Re Christopher Nordern
CHRISTOPHER NORDERN
APPLICANT
APPLICANT
And Commissioner of Taxation
RESPONDENT
COMMISSIONER OF TAXATIONOMMISSIONER OF TAXATION
RESPONDENT
REASONS FOR DECISION
Tribunal Senior Member C R Walsh
Date 11 April 2013 Date of written reasons 2 May 2013 Place Perth
1.At the conclusion of the hearing of this application on 11 April 2013, the terms of the decision intended to be made and the reasons for that decision were stated orally by the Tribunal.
2.On 15 April 2013, the Respondent requested the Tribunal to furnish to it a statement in writing of the Tribunal’s reasons for its decision pursuant to s43(2A) of the Administrative Appeals Tribunal Act 1975 (Cth).
3.The oral reasons for decision have been transcribed by Merrill Corporation.
4.An edited copy of the transcript of those reasons is attached and is forwarded to the Applicant and to the Respondent as the reasons for the Tribunal’s decision.
.....(Sgd) C R Walsh...................
Senior Member C R Walsh
Catchwords
INCOME TAX - Australian resident - foreign resident - resident of Australia - non-resident - ordinary meaning of "resides" - ordinary concepts test - Applicant Australian resident despite working overseas for three periods in the year ended 30 June 2011 - domicile test – Commissioner’s objection decision affirmed
Legislation
Taxation Administration Act 1953 (Cth) - s 14ZZK(b)(i)
Income Tax Assessment Act 1997(Cth) - s 6-5(2) – s 6-5(3) - s-6-10 (4) – s 6-10(5) – s 995-1
Income Tax Assessment Act 1936 (Cth) – s 6(1) – s 6(1)(a)(i) to (iii) – s 23r
Cases
Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614
ANZ Savings Bank Limited v Federal Commissioner of Taxation 94 ATC 4844
Minister for Immigration and Ethnic Affairs v Pochi (1980) 4 ALD 139
Re Kirby and Collector of Customs (1989) 20 ALD 369
McCormack v Federal Commissioner of Taxation 79 ATC 4111; 80 ATC 4179
Macmine Pty Ltd v Federal Commissioner of Taxation 79 ATC 4133
Vadasz v Commissioner of Taxation [2006] AATA 682
Gauci & Ors v Federal Commissioner of Taxation [1975] 135 CLR 81
Federal Commissioner of Taxation v Miller (1946) 73 CLR 93
Iyengar v Commissioner of Taxation 2011 AATA 856
Shand v Federal Commissioner of Taxation 2003 ATC 2080
Subrahmanyam v Commissioner of Taxation [2002] ATC 2303
Hafza v Director-General of Social Security [1985] FCR 444
Federal Commissioner of Taxation v Applegate 79 ATC 4307
Tanumihardjo v Federal Commissioner of Taxation 99 ATC 5330
Applegate v Federal Commissioner of Taxation (1979) 38 FLR 1
Case 78 11 CTBR (0S)
REASONS FOR DECISION
Senior Member C R Walsh
2 May 2013
INTRODUCTON
This review application concerns whether Mr Nordern was an “Australian resident” for Australian income tax purposes in the year ended 30 June 2011, such that he is liable to Australian tax on his worldwide income, including any income derived by Mr Nordern for the work performed by him in Singapore, China, Papua New Guinea, and Malaysia, in that income year.
Specifically, Mr Nordern seeks a review of the Commissioner’s objection decision (dated 18 July 2012) which disallowed Mr Nordern’s objection (dated 31 May 2012) to the income tax assessment (issued to Mr Nordern on 15 May 2012) in respect of the year ended 30 June 2011.
EVIDENCE
The only evidence before the Tribunal in this review application was:
(i)the subsection 37 (1AB) statement in lieu (filed by the Commissioner on 8 October 2012), which was tendered at the hearing of this application as “Exhibit R1”;
(ii)a number of Australian immigration incoming and outgoing passenger cards of Mr Nordern’s for the year ended 30 June 2011, which were tendered together at the hearing of the application as “Exhibit R2”.
Mr Nordern did not attend the hearing and give evidence before the Tribunal and was instead represented by his tax agent, Mr McQuilkin. According to Mr McQuilkin, Mr Nordern was unable to attend the hearing and give evidence as he is currently working overseas.
RELEVANT FACTS
The relevant facts, which are not in dispute, are as follows.
Mr Nordern was born in Australia and is an Australian citizen.
Mr Nordern owns a residence, in joint tenancy with his wife, (the Baldivis Property). Mr Nordern has a mortgage on the Baldivis Property.
Mr Nordern worked overseas for the following periods during the year ended 30 June 2011:
(i)Singapore and China, for approximately 32 days;
(ii)Papua New Guinea, for approximately 149 days; and,
(iii)Malaysia, for approximately 26 days.
During the periods in the 2011 year in which Mr Nordern worked overseas, Mr Nordern’s accommodation, meals, and other living expenses were covered by his employer at the relevant time.
During the periods in the 2011 year in which Mr Nordern was working overseas, his wife and children continued to reside at the Baldivis Property.
When Mr Nordern returned to Australia in the year 2011, in between his periods of offshore work, he resided at the Baldivis Property with his wife and children.
At all material times, Mr Nordern was happily married to his wife and was no way estranged from his family and children.
During the 2011 year, Mr Nordern did not have any assets outside Australia.
During the 2011 year, all of Mr Nordern’s salary from working overseas was paid into an Australian bank account. There was no information before the Tribunal as to whether this bank account is a sole or joint bank account or at which financial institution the account is held. No bank statements were provided by Mr Nordern to verify his income for the 2011 year.
Mr Nordern lodged an income tax return for the year ended 30 June 2011 on 22 March 2012. In that return, the following statements were made:
·Mr Nordern is an Australian resident;
·Mr Nordern’s home address was the Baldivis Property;
·Mr Nordern received income of $84,861, and tax withheld of $29,042, from ABN 210 87 824 137;
·Mr Nordern was entitled to a deduction under item D15, “Other deductions”, of $86,536 for “Exempt income, income derived as a non-resident of Australia”;
·Mr Nordern had private health insurance for the 2011 year from NHB (Navy Health Limited); and
·Mr Nordern had two dependent children.
A copy of a “payment summary” from one of Mr Nordern’s overseas employers in the year ended 30 June 2011, Well Ops Sea Pty Ltd (Well Ops), was included with the documentation lodged with Mr Nordern’s income tax return for the year ended 30 June 2011. That “payment summary” showed the period of employment as being 1 July 2010 to 1 December 2010.
On 15 May 2012, the Commissioner issued Mr Nordern with a Notice of Assessment for the year ended 30 June 2011 (Assessment). In issuing that Assessment, the Commissioner disallowed Mr Nordern’s claim for a deduction of $86,536, and the outcome of the Assessment was that Mr Nordern received a refund of $3,097.28.
In the Assessment, the Commissioner inadvertently assessed Mr Nordern at non-resident rates, instead of at the resident rates, and never amended the Assessment to assess Mr Nordern at resident rates, or to impose the Medicare levy. However, before the Tribunal, the Commissioner conceded that if the Commissioner’s arguments as to residency are accepted by the Tribunal, the Assessment will be amended to include:
(i)the tax-free threshold and the progressive rates of tax imposed on resident taxpayers; and
(ii)Mr Nordern’s liability for the Medicare levy.
Mr Nordern objected to the assessment on 21 May 2012 through his tax agent, Mr MQuilkin (Objection). That Objection provided, in part:
The reasons for this objection is that the taxpayer, a non-resident of Australia, has been assessed on $86,536 worth of income derived overseas as a non-resident of Australia, which is not assessable income in Australia. It remains inconceivable to us that the taxpayer has been assessed as a non-resident of Australia, and also that the Medicare levy has not been assessed, which presumes that you have accepted the taxpayer as non-resident of Australia for taxation purposes. If this is the case, we are bewildered as to the reason the taxpayer’s claim for his non-resident income has been assessed in Australia.
The grounds on which the taxpayer relies on this objection is that the $86,536 is not ordinary assessable income under section 23r of the Income Tax Assessment Act 1936, as amended; and accordingly, should be excluded from his assessable income.
In his grounds for the Objection, Mr Nordern stated:
1. The taxpayer was overseas on business for 237 working days in China, PNG and Malaysia. His intention is to continue working overseas for the immediate future.
2. The taxpayer is paid by his employer in Australia for his services rendered outside Australia, and this income was derived by the taxpayer outside Australia, and is therefore not assessable Australian income by definition. It is irrelevant that the taxpayer was paid in Australia, as the assessability of the income is based on where the services are performed, and not where the income was paid.
3. If the $86,536 is determined to be assessable in Australia, the taxpayer should be afforded deductions against this income, which were not claimed, as the income was determined to be non-Australian income.
On 15 June 2012 the Commissioner wrote to Mr Nordern requesting additional information from Mr Nordern to enable him to make a decision on the Objection.
On 29 June 2012 Mr Nordern responded to the Commissioner’s request for further information through his tax agent, Mr McQuilkin. In that letter, Mr Nordern advised the Commissioner, among other things, that in the 2011 year he worked for a company called Fugro-TSM (Fugro-TSM). Further, a letter (dated 4 July 2012) was provided by Fugro-TSM advising that Mr Nordern’s income from it was derived by Mr Nordern overseas. Fugro-TSM’s address on that letter is listed as Level 6, 256 Adelaide Terrace, Perth WA 6000. Mr Nordern did not provide any evidence of the income received from his employment with Fugro-TSM.
Mr Nordern did not provide any evidence of any tax paid to any other country in respect of the work he performed overseas in the 2011 year. Further, Mr Nordern did not provide any evidence of any expenses that were incurred by him in gaining or producing his assessable income in the 2011 year.
On 18 July 2012 the Commissioner disallowed the Objection (Objection Decision) on the basis that Mr Nordern was an “Australian resident” in the year ended 30 June 2011.
Dissatisfied with the Commissioner’s Objection Decision, on 21 August 2012 Mr Nordern applied to the Tribunal for a review of the Commissioner’s Ojection Decision.
Mr Nordern’s Application for Review states:
the ground on which this request is made is that the taxpayer is a non-resident of Australia for taxation purposes. As such, under the former section 23r (of the ITAA 1936) the income was derived overseas and is not liable to Australian tax.
ISSUES
The central issue for determination by the Tribunal in this review application is whether Mr Nordern was an “Australian resident” for Australian income tax purposes in the year ended 30 June 2011.
In determining this issue, the Tribunal is also required to consider whether:
(i)the income assessed to Mr Nordern for the year ended 30 June 2011 is exempt, under s 23r of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936); and
(ii)Mr Nordern’s Assessment, for the year ended 30 June 2011, is excessive.
BURDEN OF PROOF
Pursuant to section 14ZZK(b)(i) of the Taxation Administration Act 1953 (Cth) Mr Nordern bears the burden of proving that the Assessment is excessive: Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 and ANZ Savings Bank Limited v Federal Commissioner of Taxation 94 ATC 4844. The standard of proof is on the balance of probabilities: Minister for Immigration and Ethnic Affairs v Pochi (1980) 4 ALD 139 and Re Kirby and Collector of Customs (1989) 20 ALD 369.
If Mr Nordern is unable to establish that the Assessment is excessive, then the Assessment must stand, irrespective of whether or not there are any facts or circumstances which would, on the face of it, support the Assessment: McCormack v Federal Commissioner of Taxation 79 ATC 4111; 80 ATC 4179 and Macmine Pty Ltd v Federal Commissioner of Taxation 79 ATC 4133.
The burden will not necessarily be just discharged, for example, by
Mr Nordern showing an error by the Commissioner, in forming a judgment as to the amount of the Assessment: Dalco (1991) 168 CLR 614 at 621 and Vadasz v Commissioner of Taxation [2006] AATA 682 at [31]. There is no onus on the Commissioner to show that the Assessment is reasonable, or supported by evidence: Gauci & Ors v Federal Commissioner of Taxation [1975] 135 CLR 81 at 89 per Mason J.
RELEVANT LAW
An “Australian resident” is generally assessable on the ordinary and statutory income derived from all sources, whether in or out of Australia during the income year concerned: s 6-5(2) and s 6-10(4) of the Income Tax Assessment Act 1997 (Cth) (ITAA 1997). In contrast, a “foreign resident” is generally assessable only on ordinary and statutory income derived from all Australian sources, during the income year concerned: s 6-5(3) and s 6-10(5) of the ITAA 1997.
The definition of “Australian resident” in s 995-1 of the ITAA 1997 provides that "Australian resident" means a person who is a resident of Australia for the purposes of the ITAA 1936. The definition of “foreign resident”, in s 995-1 of the ITAA 1997 states that a "foreign resident" means a person who is not a resident of Australia for the purposes of the ITAA 1936.
In other words, the definition of “Australian resident”, and “foreign resident” in the ITAA 1997 both cross-reference back to the definition of “resident or resident of Australia” in s 6(1) of the ITAA 1936. The definition of “resident” or “resident of Australia” in s 6(1) of the ITAA 1936 includes not only a person who “resides” in Australia within the ordinary meaning of that word (referred to as the “ordinary concepts test”), but also a person who satisfies any one of the three additional statutory tests set out in s 6(1)(a) (i) to (iii) of the ITAA 1936, being: (i), the domicile test; (ii) the 183 day test; and (iii) the superannuation fund test.
Of the three statutory tests, only the domicile test in s 6(1)(a)(i) of the ITAA 1936 is relevant to this review application. That test will be considered in further detail later in these reasons.
Ordinary meaning of “resides” (or the “ordinary concepts test”)
The primary test for deciding the residency status of an individual is whether that individual resides in Australia according to the ordinary meaning of “resides”. Residency status is a question of fact and degree and not of law: Federal Commissioner of Taxation v Miller (1946) 73 CLR 93.
According to the High Court of Australia in Miller (1946) 73 CLR 93 per Latham CJ at 99 to 100, the term “reside” should be given a wide meaning for the purposes of s 6(1)(a) of the ITAA 1936.
The term “reside” is not defined in the Australian income tax law and consequently takes its ordinary meaning. The Macquarie Dictionary, Fifth Edition (2009) defines “reside” as:
to dwell permanently, or for a considerable time; have one’s abode for a time.
Further, the New Shorter Oxford Dictionary Volume 2 (1993), defines
“reside” as meaning:
(b) dwell permanently or for a considerable time, have one’s regular home in or at a particular place.A summary of the law on the ordinary meaning of “resides” is set out in the Tribunal’s decision in Iyengar v Commissioner of Taxation 2011 AATA 856 at [55] to [60]. In short, however, in deciding whether a person “resides” in a particular country for the purposes of the “ordinary concepts test”, the courts have consistently referred to and taken into account various factors as being relevant to this question. These factors are: (i) physical presence; (2) nationality; (3) history of residence and movements; (4) habits and mode of life; (5) frequency, regularity, and duration of visits; (6) purpose of visits to or absences from a country; (7) family and business ties with a country; and (8) maintenance of a place of abode.
Over the years, a considerable body of law has developed on each of these factors. A useful summary of that law is contained in paragraphs 61, 62, 66, 68, 70, 73, 75, 77-79, 81-82 of the Tribunal’s decision in Iyengar.
The weight to be given to each factor will vary with the individual circumstances and no single factor is necessarily decisive. As acknowledged by the Tribunal in Shand v Federal Commissioner of Taxation 2003 ATC 2080 at [35]:
Questions of residence, domicile, permanent place of abode, have frequently been found by the courts and tribunals to be difficult to assess on a factual level, and not easy to define in concrete legal terms.
Based on the totality of facts and evidence before it, the Tribunal considers that, on balance, Mr Nordern was at all material times a resident of Australia for the purposes of the definition of that term in s 6(1)(a) of the ITAA 1936. That is, the Tribunal takes the view that Mr Nordern was an “Australian resident” according to ordinary concepts throughout the year ended 30 June 2011. That is not to say that this could change in the future, if and when Mr Nordern’s individual circumstances change.
It follows, therefore, that Mr Nordern was also an “Australian resident” for the purposes of the definition of that term in s 995-1 of the ITAA 1997, and as used in s 6-5(2) of the ITAA 1997. In reaching this conclusion, the Tribunal is mindful of the fact that it has previously been held that the ordinary meaning of “reside” in s 6(1)(a) of the ITAA 1936 should be attributed with the widest possible meaning, as that is what Parliament intended: see Subrahmanyam v Commissioner of Taxation [2002] ATC 2303 per Deputy President Forgie at [23] and [43-44], wherein Deputy President Forgie referred, with approval, to the decision of Wilcox J of the Federal Court of Australia in Hafza v Director-General of Social Security [1985] FCR 444 at 449-450.
More particularly, the Tribunal reaches this conclusion based on the following:
·Mr Nordern was born in Australia and is an Australian citizen;
·There is nothing to suggest Mr Nordern is a resident or citizen of any other country;
·Mr Nordern’s wife and two dependent children remained living in Australia at the Baldivis Property throughout the 2011 year;
·There is nothing to suggest that Mr Nordern is any way estranged from his family or that he had any family outside Australian in the 2011 year;
·The periods that Mr Nordern spent out of Australia in the year 2011 were relatively short periods that Mr Nordern spent living and working on oil rigs;
·During the periods Mr Nordern spent overseas in the 2011 year, his accommodation, meals and other living expenses were covered by his employer at the relevant time;
·Mr Nordern was physically present in Australia for approximately 35% of the year ended 30 June 2011, being approximately 131 days spread over 7 stays/visits;
·When outside Australia in the year 2011, Mr Nordern was working in the following countries for the following periods:
· Singapore and/or China, for approximately 32 days,
· Papua New Guinea, for approximately 149 days, and
· Malaysia, for approximately 26 days;
·In the 2011 year Mr Nordern returned to Australia in between his periods of overseas work and lived at the Baldivis Property with his wife and children;
·On each incoming (immigration) passenger card completed by Mr Nordern during the year ended 30 June 2011, he stated that his intended address in Australia was the Baldivis Property and that he intended to live in Australia over the next 12 months;
·On each outgoing (immigration) passenger card completed by Mr Norden during the year ended 30 June 2011, Mr Nordern stated that he was an “Australian resident” temporarily departing, and that his main reason for travel overseas was either business or employment;
·In the 2011 year Mr Nordern retained most of his personal assets in Australia;
·In the 2011 year Mr Nordern had no assets overseas and his income was paid into an Australian bank account;
·In the 2011 income year Mr Nordern retained his membership in an Australian superannuation fund and one of his employers in that year, Well Ops, made contributions to that fund during the 2011 year;
·Throughout the 2011 year Mr Nordern continued to maintain a residence at the Baldivis Property where his wife and two dependent children lived and where he lived when he returned to Australia; and
·Mr Nordern did not own or lease any premises overseas in the 2011 year.
Consequently, based on the facts and evidence before it, the Tribunal considers that throughout the 2011 year, Mr Nordern retained a “continuity of association” with Australia, had an intention to return to Australia, and had an attitude that Australia remained home: see Subrahmanyam 2002 ATC 2303 at [23] per Forgie DP and the case law referred to therein.
Further, in reaching its conclusion, the Tribunal notes Mr Nordern’s change of employment during the 2011 year. That is, between 1 July 2010 and 1 December 2010, Mr Nordern was employed by Well Ops, an Australian incorporated company, during which period he received gross payments of $84,861, plus $1,675 for meal and travel allowances. However, soon after 1 December 2010, Mr Nordern was employed by TSmarine Pty Ltd (TSmarine) and was seconded to Salt Subsea UK to work on a vessel called the “REM Etive”. That vessel operated in international waters in Papua New Guinea. Mr Nordern derived US$98,850 during 2011 income year in respect of his employment with TSmarine, but no tax was deducted by TSmarine from the payments made to Mr Nordern.
The Tribunal agrees with the Commissioner’s submission that Mr Nordern’s change of employment during the 2011 year suggests that he was willing to take work wherever it was available and that he did not hold a strong connection to any particular overseas country or employer. In addition, Mr Nordern was often working in international waters, further suggesting that he had no strong connection with any particular country outside Australia.
Domicile Test
Having reached the conclusion that Mr Nordern was a resident of Australia, “according to “ordinary concepts”, it is unnecessary for the Tribunal to consider whether he was a resident in the relevant period under any of the three additional statutory tests in section 6(1)(a) of the ITAA 1936. As stated by the Board of Review in Case 78 11 CTBR (OS) the three additional statutory tests in the definition of “resident”, including the domicile test, must be regarded as enlarging and not restricting the ordinary meaning of “resident” in the antecedent paragraph of the definition. Accordingly, even if the person is found not to be a resident of Australia according to ordinary concepts, the person will nevertheless be a resident of Australia if he or she satisfies any one of the three additional statutory tests in s 6(1)(a) of the ITAA 1936. Conversely, if an individual “resides” in Australia, according to the ordinary meaning of the word, the other tests do not require consideration: see also Federal Commissioner of Taxation v Applegate 79 ATC 4307.
However, for completeness, the Tribunal will briefly examine the “domicile test”, in section 6(1)(a)(i) of the ITAA 1936, being the only statutory test of residence relevant to this application, and how it considers it would have applied to the facts in Mr Nordern’s case (i.e if it had not found him to be a resident according to ordinary concepts, as discussed above).
Section 6(1)(a)(i) of the ITAA 1936 states:
Resident or resident of Australia means:
(a)person, other than a company, who resides in Australia and includes a person:
(i) whose domicile is in Australia, unless the Commissioner is satisfied that [the person’s] permanent place of abode is outside Australia;
Under the “domicile test”, a person is resident in Australia if his or her domicile is in Australia, unless the Commissioner is satisfied that the person’s “permanent place of abode” is outside Australia: see Tanumihardjo v Federal Commissioner of Taxation 99 ATC 5330 at 5332 per Hill J.
A useful summary of the law on the concept of “domicile” is set out in paragraphs 91 to 98 of the Tribunal’s decision in Iyengar. However, in summary, there are three types of domicile: (i) domicile of origin; (ii) domicile of choice; and (iii) domicile by operation of the law. It is clear on the evidence before the Tribunal that Mr Nordern’s domicile of origin is Australia. Consequently, he has a “domicile” in Australia.
Based on the evidence before it the Tribunal agrees with the Commissioner’s submission that, Mr Nordern did not demonstrate any abandonment of his Australian “domicile of origin” (Australia) to establish a “domicile of choice” outside Australia. For example, Mr Nordern did not sell the Baldivis Property, close his Australian bank account or transfer his money and personal belongings to either Singapore, China, Papua New Guinea, or Malaysia. There is no evidence to suggest that Mr Nordern took steps to obtain a place to rent or to buy any real property in any country outside Australia. At all times, whilst working overseas in the 2011 year, Mr Nordern’s accommodation and living expenses were covered by his various employers. Mr Nordern’s presence in Singapore, China, Papua New Guinea and Malaysia, or in international waters in the proximity of these countries was, based on the evidence before the Tribunal, temporary and intimately connected with the needs of his relevant employer rather than being based on his own desire to develop a connection with any of those countries. Consequently, the Tribunal is of the view that Mr Nordern never made Singapore, China, Papua New Guinea or Malaysia his “domicile of choice”.
As discussed above, since Mr Nordern has a domicile in Australia, he is automatically a resident of Australia, unless the Tribunal is satisfied that he has a “permanent place of abode” outside Australia. This issue is considered briefly below.
Permanent Place of Abode
A person’s “permanent place of abode” is a question of fact to be determined according to all the circumstances of a particular case: Applegate v Federal Commissioner of Taxation (1979) 38 FLR 1. A detailed summary of the law on “permanent place of abode” is set out in paragraph 104 and following in the Tribunal’s decision in Iyengar.
As submitted by the Commissioner, the Tribunal considers that other than merely being present for certain periods in Singapore, China, Papua New Guinea, and Malaysia for work, Mr Nordern did little to demonstrate that any of those countries were his permanent home.
In his letter of response to the Commissioner’s request for further information (dated 29 June 2012), Mr Nordern stated that he had a permanent place to live in Australia namely, the Baldivis Property. That letter also stated that when Mr Nordern was outside Australia, he lived on water vessels, such as “Normand Clough” and “REM Etive”. The Tribunal agrees with the Commissioner’s submission that these were only temporary work quarters and cannot be considered to be “permanent places of abode”. In addition, the movement shown by Mr Norden between the countries of Singapore, China, Papua New Guinea and Malaysia in the 2011 year is inconsistent with the notion of him establishing a “permanent place of abode” in any of those overseas countries.
Further, although Mr Norden’s letter to the Commissioner (dated 29 June 2012) suggested that Mr Nordern had Temporary Work Visas to work in China, Papua New Guinea and Malaysia, no evidence of these visas was provided to the Tribunal. No other evidence exists concerning whether Mr Nordern established a “permanent place of abode” outside Australia whilst working overseas for the separate periods in the year ended 30 June 2011.
As such, the Tribunal cannot be satisfied based on the facts and evidence before it, that Mr Nordern had a “permanent place of abode” outside Australia in the 2011 year. Since Mr Nordern had an Australian domicile and did not have a “permanent place of abode” outside Australia during the 2011 year, the Tribunal considers that Mr Nordern would satisfy the statutory domicile test in s 6(1)(a)(i) of the ITAA 1936 and therefore be an “Australian resident” under that provision for the income year ended 30 June 2011 (i.e. if the Tribunal had not otherwise found Mr Nordern to be an “Australian resident” under “ordinary concepts”).
Section 23r of the ITAA 1936
As discussed above (in paragraph 19), Mr Nordern’s Objection relied on s 23r of the ITAA 1936 in support of the contention that his overseas income for the 2011 year should be exempt. Section 23r of the ITAA 1936 was repealed by Act Number 101 of 2006, before the income year concerned. Consequently, that provision has no relevance to this review application.
DECISION
In such circumstances, the Tribunal considers that Mr Nordern has not discharged his burden of proving, on the balance of probabilities, that the Assessment was excessive. As such, the Assessment should stand.
For the reasons just given, the Tribunal affirms the Commissioner’s Objection Decision.
I certify that the preceding 63 (sixty three) paragraphs are a true copy of the reasons for the decision herein of Senior Member C R Walsh.
..(Sgd) T Freeman...............
Administrative Assistant
Dated 2 May 2013
Date(s) of hearing 11 April 2013 Representative for the Applicant Mr Ivan McQuilkin
Tax Agent
Representative for the Respondent Mr Frank Maloney
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