{"title":"Moving to a More 'Certain' Test for Tax Residence in Australia: Lessons for Canada?","authors":"Michael Dirkis","doi":"10.32721/ctj.2020.68.1.sym.dirkis","DOIUrl":null,"url":null,"abstract":"Canada and Australia have superficially similar tests for determining the tax residence of individuals. Both have a common-law residence (or resides) test, \"continuing attachment\" rules (a statutory test in Australia), a 183-day type of test, and provisions focused on government officials. A key difference between the countries in this regard, despite broadly similar residence tests, is that litigation in Canada is rare whereas Australia, over the last decade, has seen at least 43 administrative tribunal, Federal Court, and High Court decisions with respect to tax residence. \n \nIn response to the high levels of litigation resulting from concentrated Australian Taxation Office compliance programs, the Board of Taxation commenced a self-initiated review of the income tax residence rules for individuals in May 2016. The report subsequently submitted to government noted that the current rules were no longer appropriate and needed to be updated and simplified. Although the Australian government has not endorsed the board's recommendations, the board was directed to undertake further consultation in order to ensure that the proposed residence rules are appropriately designed and targeted, with a particular focus on integrity (that is, anti-avoidance) issues. A final report, sent to the government in April/May 2019, proposed a number of bright-line tests. \n \nThese proposed tests are based in part on the approach adopted in the NZ and 2013 UK residence rules. In this paper, the author considers the similarities and shortcomings of the Canadian and Australian rules on individual tax residence according to the criteria of equity, simplicity, and efficiency (integrity), and then reviews the Board of Taxation's recommendations with an eye to whether the proposed Australian changes could provide guidance for any future Canadian reform, should the political circumstances so dictate in the future.","PeriodicalId":243835,"journal":{"name":"Canadian Law eJournal","volume":"94 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2020-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Canadian Law eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.32721/ctj.2020.68.1.sym.dirkis","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 1
Abstract
Canada and Australia have superficially similar tests for determining the tax residence of individuals. Both have a common-law residence (or resides) test, "continuing attachment" rules (a statutory test in Australia), a 183-day type of test, and provisions focused on government officials. A key difference between the countries in this regard, despite broadly similar residence tests, is that litigation in Canada is rare whereas Australia, over the last decade, has seen at least 43 administrative tribunal, Federal Court, and High Court decisions with respect to tax residence.
In response to the high levels of litigation resulting from concentrated Australian Taxation Office compliance programs, the Board of Taxation commenced a self-initiated review of the income tax residence rules for individuals in May 2016. The report subsequently submitted to government noted that the current rules were no longer appropriate and needed to be updated and simplified. Although the Australian government has not endorsed the board's recommendations, the board was directed to undertake further consultation in order to ensure that the proposed residence rules are appropriately designed and targeted, with a particular focus on integrity (that is, anti-avoidance) issues. A final report, sent to the government in April/May 2019, proposed a number of bright-line tests.
These proposed tests are based in part on the approach adopted in the NZ and 2013 UK residence rules. In this paper, the author considers the similarities and shortcomings of the Canadian and Australian rules on individual tax residence according to the criteria of equity, simplicity, and efficiency (integrity), and then reviews the Board of Taxation's recommendations with an eye to whether the proposed Australian changes could provide guidance for any future Canadian reform, should the political circumstances so dictate in the future.
加拿大和澳大利亚有表面上类似的测试来确定个人的税务居住地。两者都有普通法的居住(或居住)测试,“持续依附”规则(澳大利亚的法定测试),183天的测试类型,以及针对政府官员的条款。两国在这方面的一个关键区别是,尽管居住标准大致相似,但加拿大很少提起诉讼,而澳大利亚在过去十年中,至少有43起行政法庭、联邦法院和高等法院就税务居住问题作出裁决。针对澳大利亚税务局(Australian Taxation Office)集中合规项目引发的大量诉讼,澳大利亚税务委员会(Board of Taxation)于2016年5月开始对个人所得税居留规定进行自我审查。随后提交给政府的报告指出,目前的规则已不再适当,需要更新和简化。尽管澳大利亚政府尚未批准该委员会的建议,但该委员会已被指示进行进一步磋商,以确保拟议的居留规则设计得当,目标明确,特别注重诚信(即反避税)问题。2019年4月至5月提交给政府的最终报告提出了一些明确的测试。这些拟议的测试部分基于新西兰和2013年英国居留规定采用的方法。在本文中,作者根据公平,简单和效率(完整性)的标准考虑了加拿大和澳大利亚个人税务居住规则的相似之处和缺点,然后审查了税务委员会的建议,着眼于澳大利亚提出的变化是否可以为加拿大未来的任何改革提供指导,如果政治环境在未来如此决定。