Themes and Trends Underpinning Proposed Changes to Australian Individual Tax Residency Rules

Abstract

The law governing Australian individual tax residency has remained largely unchanged since the relevant legislation was first enacted in 1930. Almost 100 years later, global trends unthinkable in such times have arisen, adding significant complication to the practical application of these principles. Commonly observed by financial and legal practitioners as attributors to this complexity include: the multijurisdictional holding of assets and derivation of income, the customary nature of employment in many professional sectors involving overseas assignments of varying durations, plus lifestyle factors such as the offshore purchase of real property for recreational purposes. Data published by the Australian Bureau of Statistics in 2022 illustrates that 27.6% of the Australian population were born overseas, and almost half (48.2%) of all Australians have a parent born abroad. This thematic overlay of familial ties between Australian and foreign nationals spanning the globe adds an extra dimension of opacity. In the absence of legislative intervention since 1930, an ecosystem containing substantial amounts of case law, revenue authority administrative guidance and subsequent appellate tribunal decisions have proliferated. This article commences with a brief history of Australian income tax law, its impact on the development of the Australian individual tax residency rules and then discusses current trends and emerging themes in this arena.