BDO Submission - Modernising individual tax residency

On 21 July 2023, Treasury released a consultation paper on ‘Modernising the individual tax residency rules’ (Consultation paper) which provides a framework based on recommendations made in the Board of Taxation’s 2019 report ‘Individual Tax Residency Rules – a model for modernisation’. Under the Board’s proposed model, the primary test will be a simple ‘bright line’ test — a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident. Individuals who do not meet the primary test will be subject to secondary tests that depend on a combination of physical presence and measurable objective criteria.

In response, we prepared a submission outlining several issues of concern in applying the secondary tests including the need for clarification of proposed new concepts and uncertainty surrounding the tax status of Australian expatriates under the overseas employment rule.

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