Discuss whether Robert is a resident of Australia for tax purposes and how his income would be taxed

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Question - Robert, a chief executive officer of an American Company specializing in management consultancy, comes to Australia to set up a branch of his company. Robert was recruited for this job in Australia and signed a contract with the company in Sydney. Although the length of his stay is not certain, he leases a residence in Brisbane for 12 months. His wife accompanies him on the trip, but his teenage daughter, having just commenced college, stay in Newyork. He and his wife have a joint account with National Australia Bank in Australia. Robert's income from a consultancy is paid directly into this account. Robert rents out the family home. Apart from the absence of his children, Robert's daily behaviour is relatively similar to his behaviour before entering Australia. All his family other investments, including a share portfolio that generates dividend income, remain in the USA.

Discuss whether Robert is a resident of Australia for tax purposes and how his income from salary and investment would be taxed.

Answer 1 -

As per taxation amounts all over the world, it is observed that Australia has the highest tax rates among all the countries over the world. It is very significant that the taxes affect the net income levels, and it becomes more difficult for the outsourced employees who lived there in a contractual time period and have originated from other countries. Robert is a chief executive of a management consultancy and outsourced from America and started living in Australia with his wife, however, it is difficult to live in Australia with earnings as American expenses structure. As per the Australian employment and labour law of 2021, which covered market aspects, labour legislation, prejudice in protection, protection against eviction, employee privacy, trade consultants and recent development projects. Moreover, it is very important to consider every legislation rule and regulation to calculate the proper taxation methods.

Australia has a very difficult and descriptive taxation framework that increases the living costing of its citizens. Robert is started living in Australia and wanted to become an Australian taxpayer, the first step of becoming a taxpayer is resides test that included physical presence, intention, purposes, family purposes, business, social and living arrangements that considered location assets. As Robert is coming from another country he is considered an immigrant employee, Australia has several different labour legislation that includes the workplace regulation act(1996), Industrial Relations Reform Act (1993), Industrial Relations Act (1988) that covers the workplace act. In recent years, outsourcing increases a lot that helps to improve legislation law and regulation act of Australia for further. Robert is living in Australia with his wife and his daughter living in America, it is very significant while discussing the taxation value of his earning, to consider that his earning are divided into two half and fall under two different country legislation.

Service tax, value tax, government entity, non-government entity tax every tax and regulation makes Australia very expensive for other country citizens, Robert also facing a crisis in his financial assets. The costing of necessary goods, essential amenities are controlled by government regulations and taxation methods and it influences daily expenses. Robert needs to increases the income framework that helps him to prosper in Australia. Capital gain is calculated in the terms of total net income and total expenses, moreover, the total capital loss increases as the expenses increasing (www.ilo.org, 2021). The total gain gradient and total loss gradient is significantly proportional to the expenses ratio, gain will be decreased as the expenses increase and the loss will also increase as the expenses are higher. The living style, market condition, local atmosphere everything is totally different from the new york in Brisbane, however, it is important for Robert to calculate total taxation benefits before investing and save in national banks. The bank rates are different in various regions, Australia agave a different type of money system than America and it also impacts Roberts income ratio. Diversity is one of the crucial difficulties faced that migrants' employers like Robert faced in Australia and have to follow migration rules and regulations to be considered as a citizen of Australia.

Answer 2 -

According to section 6-1, at the time of the determining tax residency the following points must be included. First it includes the status of the family members. Second it includes family members stay. Third it includes the time period of stay in Australia. Fourth it includes the time duration of the outside the Australia.

Under the section 6-1 of ITAA the rules are mentioned for the determination of the residential status of the assessee. For the tax purpose the assessee will be considered as resident only if he covered under the any of the following test;

The first test is superannuation test. In this test the all the members of superannuation scheme are Australian tax resident.

The second test is 183 days test. In this test the assessee will be considered as tax resident if he stays in Australia for 183 days or more during the previous year.

The third test is domicile test. The Australian citizens are considered as tax resident. there is one exception of this rule. The exception is in the cases where there is uncertainty regarding to the permanent place of resident of assessee outside Australia.

According to the ITAA while determining the taxable income of the assessee at that time the residential status of the assessee is very important. According to ITAA at the time of the credit provided the source of interest income will take the place. As per ITAA source of dividend is come out from the basis of source of the profit from which dividend is declare. According to ITAA the residential global income must be considered as a taxable income. While in the case of the nonresident only that party of the income considered as a taxable which is come out from the Australian sources.

In the given case Robert came Australia for the reason of the set up the branch office of his company. Robert works for American company. He visits the Australia only for the reason of the set up of his company's branch office. To give company His wife also come Australia with him.

Here this case indicates that the reason of the Robert came to Australia is only for the work purpose and this is not for the long time. In USA his all other investment are held. The part of the Robert family stay in the USA. Robert is not an Australian citizen.

As per the domicile test Robert is not Australian resident .here we are assuming that he stay in austral for less than 182 days. So according to the tax purpose he will not be considered as an Australian resident. Here we assume that the investments which are hold by Robert in USA the credit for this investment provided in the USA. So this income is not come out from the Austrian source

But here Robert performed his services in Australia. So this income will be considered as a taxable income in Australia. Because the source of the income from the Australia.

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