Question

Annika is a visiting professor from South Africa, and is in Australia to collect data and interview students living in Australia for the next 9 months. She is employed and paid by her university in South Africa. During the time she is in Australia, she lives in several hotels and guest houses. Annika has no family in Australia, but has found a few close friends. At the end of her research project she returns back to South Africa. Required: Consider whether Annika is an Australian tax resident in these facts and the source of Annika’s salary. Please support your answer with relevant legislation and case law.

Answer 1

Annika is not an Australian tax resident based on the provided information. Her status is determined by the rules of residency, and her salary, being sourced from her South African university, supports her non-resident status.

Step-by-step explanation:

According to Australian tax laws, an individual is considered a tax resident if they satisfy either the "resides test" or the "domicile test." Annika, not having a permanent home or family in Australia, fails to meet these criteria. Additionally, her salary being paid by a South African university establishes the source of her income as foreign. The Double Tax Agreement between Australia and South Africa further clarifies that income derived from employment exercised in one country is generally taxed in that country. Therefore, Annika is not an Australian tax resident, and her salary is sourced in South Africa.