Win For Australian Expat Tax As High Court Refuses ATO Appeal – in what has been one of the most significant court cases for Australian expats, the Harding vs Commission of Taxation (ATO) case highlights the rapidly changing demographic of how Australian expats live, work and play.
As we reported earlier this year the Full Federal Court overturned an original court decision whereby the ATO had sought to argue that Mr Harding was classified as a resident for tax purposes.
Last week the High Court refused the ATO Commissioners application for special leave to appeal the Full Federal Courts decision.
The Harding case was important for Australian expats in that whilst everyone’s circumstances are different it highlighted the deficiencies in the current legislation and how the modern day expat now lives.
Mr Harding, who was an expat that lived in Bahrain and worked in Saudi Arabia, successfully argued the point that even though his accommodation may have appeared temporary in nature (he was living in a serviced apartment) it was in fact his permanent place of abode overseas.
Whilst the victory is a welcomed one it highlights how complex the matter of Australian expat tax has become and the lengths that the ATO will go to argue their point.
Unfortunately the laws surrounding Australian expat tax, and particularly the topic of domicile, is antiquated and dates back to the 1st of July 1930.
A recent review by the Board of Taxation concluded that the existing individual residency rules are no longer appropriate and must be modernized to reflect the mobile global work force and in particular the Australian diaspora.
The Harding case highlights the importance of obtaining Australian expat tax advice and how this information is more important now than ever.
Until we see the recommendations by the Board of Taxation incorporated into the legislation it would be prudent for Australian expats to ensure they’re fully informed of what is required in order to qualify as a non-resident for tax purposes.