Tax Treaty Case Law around the Globe 2021

S. 14I. Introduction

A senior taxation officer in a private conversation recently described the application of Australia’s rules for determining the residence of individuals as one of the most difficult areas of income law due to the complexity of weighing the often-competing facts in complex factual scenarios. This factual complexity is evident in the Full Court of the Federal Court of Australia (Full Federal Court) (Justices: Davies, White and Steward) decision in Commissioner of Taxation v. Pike (2020). In analysing this case, the focus will be on the application Articles 4(3) and 4(4) of the Australia-Thailand Income Tax Treaty (1989). The domestic tax issues will also be briefly examined.

II. Facts of the case

The findings of fact made by the court at first instance (the Federal Court) were as follows. Mr Pike (an expert in the selection, production, and sale of tobacco), Ms Thornicroft (an accountant and his de facto spouse), and their two children, all Zimbabwean citizens, moved to Australia from Zimbabwe in March 2005. Ms Thornicroft had been granted a temporary skilled work visa due to her employment with Ernst & Young in Brisbane. Mr Pike and their two sons were granted visas to ...