Exam 2: Residency and Source of Income

Which one of the following statements is not true in regard to non-residents?

Ian Ruven is an executive of a US corporation specialising in management consultancy and he comes to Australia to set up a branch of his company. Although the length of his stay is not certain, he leases a residence in Sydney for twelve months. His wife accompanies him on the trip but his teenage son and daughter, having just commenced college, remain in the family home. Apart from the absence of his children, Ian's daily behaviour is relatively similar to his behaviour before entering Australia. Ian earns interest from substantial investments he has in the United States. Satisfied with the progress of the branch, Ian and his wife return to the United States eleven months after arriving in Australia. Are Ian and his wife residents of Australia for the period of time he is in Australia?

What is the effect of Australia's Double Tax Agreements (DTAs) with other countries, such as the United States?

Richard is a non-resident of Australia and he owns shares in EZY Enterprises, a company incorporated in the Philippines. EZY Enterprises carries out operations in the Philippines and other countries with 10% of its profits sourced from Australia. It is a non-resident of Australia. If EZY Enterprises pays a $1,000 dividend in the 2020 year and if 10% of the profits, out of which that dividend was paid, were sourced in Australia, would Richard have any tax obligations in Australia?

Des is an Australian engineer was seconded to his employer's UK office for a period of 2 years or "such longer period as mutually agreed upon". After arriving in London, Des and his wife bought an apartment and lived there for two years whilst for the same time renting out his Australian home. After two years, Des did not accept the offer to stay on with the firm after his initial period of employment largely due to the fact that his wife wished to return to Australia. Des continued to stay in the UK after this two year period and has not as yet returned to Australia. Is Des a resident of Australia or not?

Michael Desmond is a South African diamond corporation executive. He takes the opportunity to participate in an intensive eight month advanced management development program at an Australian university. Michael's wife and children do not accompany him to Australia and while here he stays in basic accommodation on campus. He spends his time studying or writing reports for his company. He is in Australia solely to do the course and at the end of eight months he returns home. Is Michael a resident of Australia?

Arazon Plc is incorporated in the UK and sells various products online to consumers all around the world with some located in Australia. If, in the last financial year, Arazon Plc made sales to Australian consumers totalling $70,000, does Arazon Plc need to register for GST in Australia?

Imran is an Australian resident. During the 2019-20 financial year he earned$60?000assessable income from Australian sources and$50?000income from investments in the United Kingdom. He has already paid$17?000UK tax on the$50?000income. The same investments were only liable to$12?000tax if taxed in Australia. What is his Australian income tax liability?

Reggie is a bank officer who was posted from Australia to Fiji for 2 years only and never intended to stay any longer. During his overseas posting he maintained bank accounts in Australia and he rented out his Australian home. He was accompanied by his wife and children and they stayed in a rental property supplied by the bank. Reggie and his family returned to Australia after he had spent 2 years exactly working in Fiji. Does Reggie remain an Australian resident for the period of his absence from Australia?

Jan Zielinski is single and is a lecturer in economics at the University of Warsaw. He comes to Australia to work on a research project in August 2019. He is contracted to do the research in Australia for seven months. Jan finds a small furnished unit near his work and takes lease of the unit for seven months. He also buys an old car. Jan intends to return to Warsaw at the end of the project that actually lasts for nine months. He negotiates an extra two months on the lease of his unit. Apart from depositing his salary into an Australian bank account to cover normal living expenses, Jan retains all assets and investments in Poland, his country of domicile. Jan returns to Poland in May 2020. Is Jan a resident of Australia in the 2020 tax year?

Sanjit is an Australian resident, but only resided in Australia for 5 months of the 2019-20 financial year. What will Sanjit's tax-free threshold be for the year ended 20 June 2020?

Dexta Ltd is a company that was incorporated in Mexico and which has its head office in Canada. It carries on business in Australia and in a number of other countries. 55% of the shareholders of the company reside in Australia with the remaining 45% of shareholders spread across a number of countries. Is Dexta Ltd regarded as an Australian resident company?

Moogle Inc is incorporated in the USA and has a permanent establishment in Australia. The global income of Moogle Inc is $800 million. Do Australia's new multinational anti-avoidance rules apply to Moogle Inc?

In the FCT v Mitchum case the source of the actor Robert Mitchum's acting income from appearing in a film shot in Australia was determined to be?

The new Australian anti-avoidance rules in regard to multinational corporations do not apply to which one of the following options?

Adelaide Software pays royalties to a US firm for the use of the software products. The contract to arrange these royalty payments was signed in Canada. According to tax law what is the source of these royalty payments?

Which one of the following statements is not true in respect to overseas businesses and their Australian GST obligations?

Which of the following is true in relation the meaning of the term 'source' when used in the context of the source of income derived by a taxpayer?

Which of the following is not a factor under the ordinary concepts test for determining the residency of an individual?

Rovers Co is a company that was incorporated in the USA but has its head office located in Singapore. The company does carry on business in Australia but has no offices here. The directors of the company regularly (six or more times a year) meet in hired offices in Brisbane. At these director meetings high-level decisions are made that set the company's general policies, and determine the direction of its operations and the type of transactions it will enter. The directors also meet in other locations but the majority of the director meetings each year are held in Australia. Is Rovers Co an Australian resident company?