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Board of Taxation releases its recommendations on individual tax residency

Board of Taxation's individual tax residency report

Dan Hodgson reviews the report which recommends a re-focusing of tax residency rules.

Daniel Hodgson

Partner, People Services

KPMG Australia


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The Board of Taxation has now released the report on reform of the individual tax residency rules that it provided to the Federal Government in March this year.

The Board has concluded that the tax legislation requires improvement and simplification in order to adequately address twenty-first century social and employment circumstances. According to the Board, its proposals would provide greater certainty for taxpayers by re-focusing the tax residency rules in three ways:

  • making physical presence the primary measure of residency – moving Australia to closer alignment with international practice;
  • focusing on Australian connections – providing that two individuals with identical physical presence and other connections to Australia should be treated the same; and
  • adopting only objective criteria – removing any requirement to test intention or undertake broad, holistic examinations.

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