Working Abroad, Still Tax Resident

Quy Case Reinforces Domicile Trap

In Quy and Commissioner of Taxation [2025] ARTA 174, the Administrative Review Tribunal (ART) reaffirmed a key point that regularly trips up expats and mobile professionals:

"Just because you live and work overseas doesn’t mean you’ve stopped being a tax resident of Australia".

This case serves as a sharp reminder that the domicile test can capture taxpayers who maintain personal and family connections in Australia, even when their employment takes them offshore.

The facts in brief

The taxpayer, an Australian citizen, had accepted an internal transfer with his employer and moved to Dubai. While overseas, the taxpayer’s employer covered most of his living costs, including accommodation.

Importantly:

His wife and children remained in the family home in Perth.
His intention to return to Australia was clear, though not tied to a specific date.
He argued that he was not a resident under either the ordinary concepts test or the statutory domicile test.

The Tribunal disagreed.

What the Tribunal decided

The ART accepted that:

The taxpayer was not a resident under the ordinary concepts test, given his physical absence and day-to-day life in Dubai.

However:

Because his domicile remained in Australia, the test under section 6(1)(b) ITAA 1936 applied.
The key question became: Did he have a permanent place of abode outside Australia?

The answer was no.

Despite his extended work period in Dubai, the accommodation was employer-provided and not permanent in character. Combined with the fact that his family and home remained in Australia, the Tribunal found that his real and enduring ties remained here.

Result: He was an Australian tax resident for the relevant years.

Why this matters

This case is a textbook example of how the domicile test can trap well-meaning taxpayers who assume that being offshore means being non-resident.

For practitioners advising mobile professionals, FIFO workers, or employees on secondments, this case reinforces that:

Maintaining a home and family in Australia weighs heavily toward residency.
Employer-paid accommodation overseas may not qualify as a “permanent place of abode.”
Intentions to return, even without a firm timeline, weaken arguments for non-residency.

Practical steps for advisers

If working with clients who are:

Living overseas but still have family or property in Australia, or

On temporary work placements with housing support,

…then it’s essential to:

Review residency status annually — particularly before tax return lodgement.

Check whether the overseas accommodation is self-funded, long-term, and independent.

Document the nature of the overseas role, any return intentions, and whether ties to Australia have been genuinely severed.

Taxpayers can be blindsided by the fact that you don’t need to be physically present to be tax resident — the law looks at your roots, not just your location.

Looking ahead

This decision adds to the growing list of cases that challenge assumptions around residency and reinforces the need for detailed, evidence-based analysis.

Where family, property, or social ties remain in Australia, the domicile test will often override the expat narrative — and leave clients facing unexpected tax obligations.