Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
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TAXATION LAW1
Harding v Commissioner of Taxation [2018] FCA 837
Introduction
The present case has been raised by the commissioner of taxation in Australia issuing a
notice of amended assessment to Mr Harding regarding his taxability as a resident of
Australia. Mr Harding having an Australian origin has been living in Saudi Arabia for seven
years with his wife and two children in relation to his employment. Afterwards, owing to an
instability in the region, they were compelled to return to Australia and stay there for a period
of 3 years. However, owing to the reduced salary he left the job and return to Saudi Arabia
leaving his family in Australia. However, he has been visiting his family every year. His
failure to convince his wife to relocate to Saudi Arabia Mr Harding and his wife discontinued
their relationship. Mr Harding however return to Saudi Arabia and developed a relationship
with Ms Gonzalez and after moving to Oman he left that relationship and married another
woman (Norbury 2019). The court held that he has been a resident in Australia applying the
ordinary concept test as well as the place of permanent place of abode test (Jade.io, 2019).
This paper will strive to analyse the tax implications arising from this judgement as well as
the implications regarding the application of these two tests.
Tax Implications for Australians Living as Expats in Other Countries
In previous times it has been implied that a person who has been working abroad will
generally be considered as someone who has left their residency in Australia and has been
residing permanently in that place for tax purposes. However with the advancement in
technology and communication system the person residing overseas for the purpose of
employment may visit his loved ones in Australia on a regular intervals. This has change the
view of the assessment of tax residency of a person in Australia who has been staying abroad

TAXATION LAW2
for the purpose of employment. Any person who has been residing outside Australia for the
purpose of employment may be treated as a resident in Australia for tax purposes applying
the tests provided u/s 6(1) of the ITAA 36. This test has provided to perspectives to be
considered. Firstly, the domicile of a person need to be located within the precincts of
Australia. Secondly, it should be made evident that the person in question does not own any
permanent place of abode located outside the Australia. The present decision has assisted
certain Australian expatriates as well as created certain taxation problem for them as well
who has been working overseas (Jones 2018).
A person residing in Australia is assumed to have a domicile in Australia. In case he
abandons his domicile in Australia, an intention of establishing a domicile in another country
in a permanent manner or at least indefinitely is required to be present. In case a person fails
to relinquish the Australian residency or has failed to incorporate the residency of another
country, he will be treated as a domicile in Australia. Again, any person who claims to be a
non-resident in Australia is required to establish the fact that he has been owning a permanent
place of abode outside the precincts of Australia (Norbury 2018).
In this case Mr Harding has been residing in Saudi Arabia for the sole purpose of
employment and while his stay in there, he has been moving between different departments,
which implies the availing of temporary accommodation. This cannot be treated as a
permanent place of abode located in Saudi Arabia. Hence, the permanent place of abode of
Mr Harding has always been in Australia. Moreover, later on he has moved to Oman, which
depicts that he does not have any permanent place of abode located outside Australia. This
made the court to conclude that Mr Harding does not own any specific dwelling place outside
Australia, which is permanent in nature and he does not have a tax residency in any other
country (Jade.io, 2019).