Tax Treaty Case Law around the Globe 2020

S. 17Chapter 2 Australia: Applying the Tax Treaty Residency Tie-Breaker Test

Michael Dirkis

2.1. Introduction

Following the narrowing of an exemption for foreign employment income derived by an Australia-resident individual as from 1 July 2009 and increased compliance activity in respect of offshore income carried out by an ongoing cross-agency taskforce led by the Australian Taxation Office, 50 matters were heard by the High Court, the Full Federal Court of Australia, the Federal Court of Australia (Federal Court) and the Administrative Appeals Tribunal between 2010 and 2020 concerning the residence of individuals and associated issues. The majority of these cases dealt with issues associated with the application of the Australian domestic definition of “resident” in section 6(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) for persons and related matters associated with the burden ofS. 18 proof, the provision of evidence in the context of residence disputes, and the application of the former foreign employment income exemption.

S. 19There have only been three matters in which the application of tax treaties was a crucial issue, one being the 2019 decision of the Federal Court in Pike v. ...