Australian Taxation Law Case

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

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Letter of Advice: Private and Confidential
ACW Partners Pty Ltd
25 St Mary St
Jacksonville VIC 5845
Mr Nguyen
25 St Mary Street St
Jacksonville VIC 5485
Dear Nguyen
In response to our most recent conference, telecommunication and e-mail, we are
hereby drafting the letter of advice in favour of the advice that is sought by you regarding
your residency position and tax liability of your income with the ATO.
Scope of Advice:
The present letter seeks to give advice to the taxpayer as how they should reply to the
subject matters that is bought forward by the ATO. The current letter simply ignores the
anything relating to surplus income which the taxpayer may have derived from employment
in Saudi Arabia. The letter further ignores any sort of payment or distribution that may be
received by the taxpayer. The present letter of advice is in agreement with the necessary tax
laws, cases and legislation that we as consultant deems appropriate in the given situation of
the taxpayer.
Summary of Advice:

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The present summary of advice takes into the account the matters that is addressed
relating to your residential position which has lately been in question by the ATO. The
summary of the advice comprises of some recommendations to structure the taxation matters
with the ATO in regarding the assessment of income sourced overseas by the taxpayer. If at
any point, you find that the advice that is sought and given are incorrect and in agreement
with the matters sought then you are free to immediately contact us as this may affect the
advice that will be provided to you. The summary of advice further outlines the response for
each particular areas that is bought forward by ATO in the position paper that includes;
1. Matters concerning residential position for 2017 and 2018
2. Tax implications for the income that is sourced in overseas and paid into your
Australian bank account
3. Frequency as well as regularity of your visit to Australia
Issues:
The central issue to the question is ascertaining the residency position of Nguyen for
the taxation purpose inside the description of “sec 6, ITAA 1936”. The letter also seeks to
address the issue relating to tax liability of the income derived from rendering personal
services or from employment in Saudi Arabia which was paid directly into the Australian
bank account.
Rule:
The statutory classification of Australian inhabitant given in “sec 995-1 of the ITAA
1997” implies an individual that are observed Australian dweller within the 1936 Act
(Norbury 2019). “Subsection 6 (1), ITAA 1936” contains the definition regarding the
resident of Australia. The status of residency is observed as the substance of fact and forms
the essential conditions which ascertains the tax obligation of a person to the Australian

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income tax. The obligation of imposing tax is ascertained is centred on yearly basis. If an
individual is found to be residing in Australia in agreement with the ordinary conception of
the word, then other test in the definition is not required to be applied.
Resides Test:
The meaning denotation of the expression “reside” is considered sufficient to include
someone who visits Australia on a permanent basis. Under the reside test a person will be
treated as Australian occupant if someone is living in Australia for a substantial period in
their usual or settled place of abode (Jones 2018). The time span or the length of physical
presence in Australia is itself observed as the conclusive factor in establishing whether an
individual is residing here. A person’s behaviour over the time spend in Australia might
portray a degree of continuousness, habit or routine that are considered regular with present
in Australia. As a general rule, the below stated factors are considered useful in ascertaining
the nature of a person’s behaviour;
a. Objective and purpose of existence
b. Employment/business or family ties
c. Social and living preparations
d. Maintenance of home and location of assets
Whether a significant amount of time has gone by to reflect that a person’s behaviour
has the needed routine, habit or continuity forms the question of fact and it is reliant on the
circumstances of the case. Considering the judgement made in “FCT v Iyengar (2011)”
[AATA 856], where the taxpayer was engaged in the work contract in foreign as engineer for
a period of two years (Sharkey 2016). In Australia the taxpayer maintained his home where
his family lived and connections in Australia where he finally returned. The full federal court