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What is the future of individual tax residence under the proposed rules?
Published on 01 Mar 23 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
This article focuses on an analysis of the proposed rewrite of the residence rules for individual taxpayers in Australia. We evaluate whether the proposed rules are more aligned with the tax policy objectives of simplicity, certainty, equity, and integrity than the current law, by applying them to the facts of some key individual residence cases and comparing the approach and outcomes with the current law. The proposed rules appear to increase the incidence of taxpayers who would become residents, which, arguably, alters Australia’s jurisdictional claim. The “borderline” cases on residence, that are the subject of litigation, may persist in the event of the new rules being implemented. Furthermore, litigation in a particular area of tax law is not, of itself, evidence of complexity in that area. Although simplicity is a goal of tax policy, the tax reform process in Australia has typically proceeded on an incremental basis. Implementation of a completely new set of rules may increase uncertainty and add to complexity. It would also require taxpayers, tax practitioners and the tax administration to become well acquainted with a new set of rules. By comparing the current law with the proposed rules, one of the contributions of the research may be to promote debate and discussion
about alternative reform pathways.
Author profiles
Swapna Verma
Swapna is a Lecturer in the Monash Business School at Monash University.John Minas
John is a Senior Lecturer, Curtin Law School, Curtin University and an Adjunct Research Fellow, Griffith Law Futures Centre. - Current at 13 January 2022
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