The Commissioner of Taxation has issued Taxation Determination TD 2012/18 confirming that a New Zealand citizen, lawfully in Australia does not lose their Temporary Resident status just because they “go home for a weekend”. The Commissioner issued Draft Tax Determination TD 2012/D3 on March 28, 2012 inviting comments. The Final Determination is the same as the Draft Determination (please refer to our Global Watch issued on March 28, 2012).
The Ruling effectively reverses the stance taken by Australian Taxation Office auditors who tentatively held the view that New Zealanders permanently lost their eligibility for Temporary Resident status by virtue of falling foul of the disqualification rule in ss995-1 of the 1997 Act where an individual “has been an Australian (tax) resident and no longer holds a temporary visa granted under the Migration Act 1958”.
The proper interpretation of this rule had been litigated by the Professional Associations through the National Tax Liaison Group comprising the professional bodies and the Tax Office Senior Executive. Taking into account the purpose, scope and intention of the legislation it was argued the mere fact a New Zealander left Australia for a brief period and upon re-entry was granted a new Temporary Visa would not result in the loss of the Temporary Resident status of the individual. A literal interpretation to the contrary would be absurd and irrational.