The AAT has held that a commercial airline pilot who worked overseas for a foreign airline during the income tax years ended 30 June 2010, 30 June 2011, and 30 June 2012 was an Australian resident during those years.

The taxpayer claimed he should not have to pay income tax in Australia on the income he earned from his work because he was not an Australian resident at the time. The Commissioner disagreed and pointed to aspects of the taxpayer’s life and living arrangements, which suggested the taxpayer should be regarded as an Australian resident for the purposes of the income tax legislation.

  • The taxpayer is an Australian citizen who was born in Malaysia.
  • He came to Australia as a child when his parents moved here.
  • He also holds a British passport.
  • The taxpayer was formerly employed by Ansett, but after its collapse, said he had no choice but to look for work overseas.
  • His first role overseas was in Indonesia, where he began working in March 2002.
  • He says he moved to live in that country and no longer resided in Australia after that date.
  • He then moved to China Airlines, based in Taiwan, in 2003.
  • He was subsequently employed by Korean Air, an international airline based in Seoul.
  • He entered into a 5-year contract in June 2008, which he anticipated would be renewed in due course.
  • The taxpayer said he moved to Seoul around the time he started work at Korean Air. He said he expected to remain there indefinitely. He did not hold South Korean citizenship, but held an “E-5 working visa”.

The taxpayers’ work as a pilot took him all over the world. The Tribunal said when the taxpayer had time off, he tended to return to Australia.

  • The Commissioner said he spent 136 days in Australia in the year ended 30 June 2010, 158 days in the year ended 30 June 2011 and 156 days in the year ended 30 June 2012.
  • The taxpayer’s wife said he did not always spend the time in Australia with her and their sons.

After reviewing the evidence, the Tribunal said it was satisfied the taxpayer was a resident of Australia according to ordinary concepts during the years of income in question. He lived in Australia with his family; this was his usual place of abode, even if he had to fly back and forth from South Korea to work. The Tribunal therefore disallowed the taxpayer’s appeal and affirmed the Commissioner’s objection decisions.

(Re Hughes and FCT [2015] AATA 1007, AAT, McCabe SM, AAT File Nos: 2015/1074-1076, 22 December 2015.)

[LTN 1, 5/1/16]]