190807技术总结 Q&A: Individual tax and non resident registered a company through ASIC and ATO

1.0 Decision: It is very difficult to be approal by ATO and ASIC

2.0 Decision with facts: Individuals with travelling visa failed residency test as follows:

2.1 Residency test

2.1.1 Resides test
The primary test of tax residency is called the ‘resides test’. If you reside in Australia, you are considered an Australian resident for tax purposes and you don’t need to apply any of the other residency tests.

Some of the factors that can be used to determine residency status include:

• physical presence
• intention and purpose
• family business or employment ties
• maintenance and location of assets
• social and living arrangements.

If you don’t satisfy the ‘resides test’, you’ll still be considered an Australian resident if you satisfy one of three statutory tests.

2.1.2 Domicile test
You’re an Australian resident if your domicile (broadly, the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.

A domicile is a place that is considered to be your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).

A permanent place of abode should have a degree of permanence and can be contrasted with a temporary or transitory place of abode.

2.1.3 183-day test
This test only applies to individuals arriving in Australia. You will be a resident under this test if you’re actually present in Australia for more than half the income year, whether continuously or with breaks.

You may be said to have a constructive residence in Australia, unless it can be established that your usual place of abode is outside Australia and you have no intention of taking up residence here. If you have already taken up residence in Australia, this test will not generally apply regardless of the number of days you spend overseas.

2.1.4 Examples
Example – Australian resident under the domicile test

Emily leaves Australia to work in Japan as a teacher of English. Emily has a one-year contract after which she plans to tour China and other parts of Asia before returning to Australia to continue work here.

Emily lives with a family in Japan during her time there and rents out her property in Australia. Emily is single. Her parents live interstate and her brother has moved to France. Emily is an Australian resident for tax purposes even though she is residing in Japan because, under the domicile test:

her domicile is in Australia (as she is a resident who has lived in Australia and will generally retain a domicile here when absent overseas), unless she chooses to permanently migrate to another country)
her permanent place of abode remains Australia.

Example – foreign resident for tax purposes

Bronwyn, an Australian resident, receives a job offer to work overseas for three years, with an option to extend for another three years. Bronwyn, her husband and three children decide to make the move.

They rent out their house in Australia as they intend to return one day. While overseas they rent a house with an accommodation allowance provided under Bronwyn’s contract.

Bronwyn is unsure if she will extend her contract to stay for another three years. She will decide later depending on how the family like life.

Bronwyn is considered a foreign resident for tax purposes because she does not satisfy ‘the resides’ test. This is due to:

• the length of her physical absence from Australia
• the surrounding circumstances not being consistent with residing in Australia (such as, establishing a home overseas with her family and renting out her family home in Australia) even though she has retained the family home.

Bronwyn has also not satisfied the domicile test, as: her permanent place of abode is outside Australia due to

• the length of time committed to being overseas
• the establishment of a home overseas
• her family accompanying her overseas

The fact that she won’t be selling the family home in Australia, although relevant, is not persuasive enough to overcome the finding on the basis of the other factors.

It can be argued that she has abandoned her home in Australia for the duration of her stay, by renting it out.

2.2 ASIC requirements
You must get written consent from the people that will fill these roles:

• Director (must be over 18)
• Secretary (must be over 18)
• Member (every company must have at least one member).

At least one director and secretary of a proprietary company must ordinarily reside in Australia.
At least two directors of a public company must ordinarily reside in Australia.

NOTE: NO ACN cannot apply for ABN

2.3 TFN issue with ATO
If you are a foreign resident of Australia for tax purposes, you don’t need a tax file number (TFN) if you receive only interest, dividends or royalty payments from an Australian source.

2.4 Checklist to set up a company
2.4.1 Do an ASIC name search to check if the name you want is available – ASIC search – and that there is no similar name which could cause problems for you. If there is, legal action could be taken to stop you using your name, even after you have registered it!

2.4.2 Arrange an address for the registered office and principal place of business of the company (it must be a street address, not just a post office box) and get the occupier to sign a consent form.

2.4.3 If you are not an Australian resident, find and appoint someone who “ordinarily resides in Australia” to be your resident director.

2.4.4 Prepare the preliminary documentation which must be signed before a company can be registered – consents of directors and members.

2.4.5 Be very careful when completing the application for registration because even a minor typing error (e.g. in the name of the company) can cost more to rectify than the cost to register a company!

2.4.6 After the company is registered, it is necessary to apply for an Australian Business Number (ABN) from the Australian Tax Office. If you do not have a personal Australian Tax File Number (TFN), you will need to appoint an Australian public officer who does.

2.4.7 It can take up to 3 months to obtain an ABN for a company if even one director or shareholder is a non-resident of Australia.

P.S. If you need to set up a bank account, most banks will require a non-resident director and any account signatory to come to Australia to be identified at a branch of the bank, although one bank allows ID verification to be done without coming to Australia.

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