Private and Confidential Pitchers

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
Pitchers Partners Pty Ltd
20 Connaught St
Jacksonville VIC 5469
Mr Nguyen
20 Connaught St
Jacksonville VIC 5469
Dear Nguyen
Further to the latest meeting, communication and telephonic conversation, we would
request you to please find the attached letter of advice regarding the questions of your tax
residence.
Scope of Advice:
The chief objective of this advice is to provide guidance to the taxpayer in what way
they are required to reply to the substances raised by the ATO. The existent letter does not
simply overlook any kind of surplus in income that is extracted from the employment income
in Saudi Arabia or any kind of distribution or payment that may or may not be received by
the taxpayer. The assistance rendered is based on the relevant taxation rules, rulings cases and
legislature as we realize its applicability in this case.
Summary of Advice:
The advice summarizes the materials addressed regarding your residential status that has
been in question recently and the present letter looks forward to recommend some options to

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structure your matters relating to ATO in respect of tax liability of income sourced. On
noticing that the facts given in this letter are not correct and not in correspondence to the
advice sought then please feel free to contact us immediately since it may impact the advice
which is being given to you. The advice additionally outlines the response for each specific
areas that has been raised by the ATO in the position paper which includes;
a. The question of residency in 2017
b. The residency position in 2018
c. Implications of taxes on income received in your Australian bank account
d. Frequency and regularity of your visit to Australia
Issues:
The issue in question is based on deciding the citizenship of Nguyen for tax
determination under the explanation of “sec 6, ITAA 1936”. The issue also involves
addressing the implications of tax on the earnings from employment from Saudi Arabia that
is paid in his Australian bank account.
Rule:
As per “sec 6-5 (2), ITAA 1997”, the chargeable earnings of Australian dweller take
account of ordinary earnings that is earned from every sources (Barkoczy 2016). While for
foreign residents, under “section 6-5 (3)(a)” the chargeable earnings include ordinary
earnings made from Australian foundations. As per “sec 995-1, ITAA 1997” a foreign
resident includes those persons that are not Australian occupant inside the meaning of “ITAA
1936”. Residency forms the tool based on which Australian levies taxes.
As explained under “sec 6 (1), ITAA 1936,” an Australian inhabitant includes persons
whose residence is in Australia, if not the official is satisfied that the individual has the
perpetual location of dwelling is in foreign and not in Australia and do not have any plan of

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residing in Australia (Keyzer, Goff and Fisher 2017). The definition stated in “sec 6 (1),
ITAA 1936,” lists down four residency test while the last test is completely an objective test.
The test are as follows;
Resides Test:
The resides test is observed as the main test in determining whether the taxpayer is an
Australian resident and it observed as the common law test (Woellner et al., 2016). A
taxpayer is viewed as “resident of Australia” for imposing tax if the person is really residing
in Australia, apart from their nationality, place of permanent house or nationality. In detail, to
consider a person as the Australian occupant is reliant on numerous factors. The factors
includes;
a. Existent in Australia physically
b. Time duration of a person’s bodily existence
c. Term of job agreement
d. Occurrence and consistency of an individual’s visit to Australia
The above cited factors must be ascertained while determining residential status and
controlling pointers should be weighed up to determine whether the individual is existing in
Australia and observed as tax residents of Australia. In the leading circumstance of “FCT v
Iyengar (2011)” [AATA 856], the taxpayer was employed in overseas for greater than two
years since he was an engineer (Juchau and Neale 2016). He maintained his house in
Australia where his family belonged to and ties in Australia where he ultimately returned.
The taxpayer was treated as tax dweller of Australia based on the ordinary denotation of “sec
6 (1), ITAA 1936.
A comparable consequence was quoted by the court in “Sneddon v FCT (2012)”
[AATA 516], where the taxpayer was employed in Qatar for two years-time (Langham and