question archive Hardeep was born in India and is now a permanent resident of Australia
Hardeep was born in India and is now a permanent resident of Australia
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Hardeep was born in India and is now a permanent resident of Australia. He spends most of his time working off the coast of Singapore on an oil rig for a Saudi Arabian company. He signed a contract for this job while he was in Australia. For the last five years, Hardeep wife has lived in Australia with their four children. Hardeep and his wife purchased a home in Melbourne four years ago, and they have a joint bank account with National Australia Bank in Melbourne, which earns interest. Hardeep salary is paid into this account. Hardeep and his wife also have a share portfolio in India that generates dividend income. Hardeep gets one month off from work every fourth month and he spends his time off with his family in Australia. Required: Discuss whether Hardeep is a resident of Australia for tax purposes and how his salary, interest income and dividend income would be taxed. Where relevant, refer to cases, tax rulings and legislation. australian law
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Answer:
Hardeep is a australian tax resident as his permanent residence, family and joint bank account is in Asutralia.
- his domicile is in Australia (as he is a resident who has lived in Australia and will generally retain a domicile here when absent overseas), unless he chooses to permanently migrate to another country)
- his permanent place of abode remains Australia.
His salary will be paid in singapore and Australia both but tax on salary or other incomes paid in other countries i.e., Singapore may be allowes to offset with australian tax.
Interest earned in Australian bank is taxable in Australia.
Dividend earned in India is taxable in India and Australia but offset may be allowed by Australia by a dual tax treaty or agreements or if not available then by unilateral agreement if available.
