Commissioner of Taxation v Addy

• Jurisdiction: Australia Federal only
• Judgment Date: 06 August 2020
• Neutral Citation: [2020] FCAFC 135
• Date: 06 August 2020
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Addy [2020] FCAFC 135

Appeal from:	Addy v Commissioner of Taxation [2019] FCA 1768
File number:	QUD 724 of 2019
Judges:	DAVIES, DERRINGTON, STEWARD JJ
Date of judgment:	6 August 2020
Catchwords:	TAXATION – Australia and United Kingdom double taxation treaty Art 25 – non-discrimination clause – working holiday makers – where respondent a citizen of United Kingdom and holder of a working holiday visa – where respondent taxed at working holiday maker rate in Pt III of Sch 7 of the Income Tax Rates Act 1986 (Cth) on income earned in Australia – whether working holiday maker rate infringes Art 25 of Australia and United Kingdom double taxation treaty – construction of non‑discrimination clause – whether respondent subjected to more burdensome taxation by reason of her nationality – taxation rate based on visa held rather than nationality – appeal allowed ; TAXATION – whether respondent a resident of Australia for tax purposes – definition of “resident” in s 6 of Income Tax Assessment Act 1936 (Cth) – respondent not a resident under “ordinary concepts test” – application of “183 day test” – whether Court can substitute own state of satisfaction in place of Commissioner’s state of satisfaction as to “usual place of abode” outside Australia – role of the Court limited to determining whether Commissioner had lawfully attained state of satisfaction – Kolotex Pty Ltd v Commissioner of Taxation (1975) 132 CLR 535 considered – on facts of case Commissioner had not reached state of satisfaction – respondent was a resident by application of objective element of 183 day test
Legislation:	Australian Citizenship Act 2007 (Cth) Evidence Act 1995 (Cth) s 175 Federal Court of Australia Act 1976 (Cth) s 22 Gift Duty Assessment Act 1941–1942 (Cth) s 14 Income Tax Assessment Act 1930 (Cth) Income Tax Assessment Act 1936 (Cth) ss 6, 23AF, 23G(3), 25A(11), 26AF(1)(c), 26AFA(1)(c), 26AG(6)(b), 26BB(3), 46A, 52(2)(b), 52A(3)(f), 80A, 80C, 80D, 109, 136AD, 169A(3), 175, 177F Income Tax Assessment Act 1997 (Cth) Income Tax Rates Act 1986 (Cth) ss 3, 3A, 4, 16, 18, 20, Sch 7, Pts I, II, III Income Tax Rates Amendment (Working Holiday Maker Reform) Act 2016 (Cth) Sch 1, Pt 2, cl 8 International Tax Agreements Act 1953 (Cth) ss 3, 4 Migration Act 1958 (Cth) s 29 Tax and Superannuation Laws Amendment (2013 Measures No. 1) Act 2013 (Cth) Taxation Administration Act 1953 (Cth) ss 8AAG, 14T, 14U, 14ZZ, 14ZZN, 14ZZO, 14ZZP, 14ZZQ, 15B, Sch 1, ss 16-142, 16-148, 18-80, 18-85, 18-135, 133-65, 135-10, 155-35, 350-10 Taxation Administration Act 1996 (NSW) s 101 ; Convention between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital Gains [2003] ATS 22 Arts 3, 4, 25 Vienna Convention on the Law of Treaties, opened for signature on 23 May 1969, [1974] ATS 2 (entered into force on 27 January 1980) Arts 31, 32 ; Explanatory Notes, Income Tax Assessment Bill 1930 (Cth) Explanatory Memorandum, Income Tax Rates Amendment (Working Holiday Maker Reform) Bill 2016 (Cth) Explanatory Memorandum, Tax and Superannuation Laws Amendment (2013 Measures No. 1) Bill 2013 (Cth) International Tax Agreements Amendment Bill 2003
Cases cited:	Addy v Commissioner of Taxation [2019] FCA 1768 Amway of Australia Pty Ltd v Federal Commonwealth of Australia (1999) 41 ATR 443 Australasian Jam Co Pty Ltd v Federal Commissioner of Taxation (1953) 88 CLR 23 Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 Bankstown Municipal Council v Fripp (1919) 26 CLR 385 Blues Pty Ltd v Deputy Commissioner of Taxation [2012] FCA 320 Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 Case 78 (1944) 11 CTBR 232 Coleman v Power (2004) 220 CLR 1 Commissioner of Inland Revenue v United Dominions Trust [1973] 2 NZLR 555 Commissioner of Taxation v Jackson (1990) 27 FCR 1 Commissioner of Taxation v Miller (1946) 73 CLR 93 ConnectEast Management Ltd v Commissioner of Taxation (2009) 175 FCR 110 Dempsey v Commissioner of Taxation (2014) 98 ATR 698 Deputy Commissioner of Taxation (NSW) v Brown (1958) 100 CLR 32 Duggan v Federal Commissioner of Taxation (1972) 129 CLR 365 EHF17 v Minister for Immigration and Border Protection [2019] FCA 1681 Enever v The King (1906) 3 CLR 969 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Fastbet Investments Pty Ltd v Deputy Commissioner of Taxation (No 5) [2019] FCA 2073 Federal Commissioner of Taxation v Brian Hatch Timber Co (Sales) Pty Ltd (1972) 128 CLR 28 Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 Ferris v Federal Commissioner of Taxation (1988) 20 FCR 202 Foley v Padley (1984) 154 CLR 349 French Administrative Court of Appeal Marseille, 98MA01682, 8 February 2000 German Federal Fiscal Court IR 20/87, 14 March 1989, Bundessteuerblatt, 1989, 14, II, 649 Giris Pty Ltd v Federal Commissioner of Taxation (1969) 119 CLR 365 Gregory v Deputy Federal Commissioner of Taxation (1937) 57 CLR 774 Hafza v Director-General of Social Security (1985) 6 FCR 444 Harding v Commissioner of Taxation [2019] FCAFC 29; (2019) 269 FCR 311 Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 1077 Kolotex Hosiery (Australia) Pty Ltd v Commissioner of Taxation (1975) 132 CLR 535 Levene v Inland Revenue Commissioners [1928] AC 217 Li Shi Ping v Minister for Immigration, Local Government & Ethnic Affairs (1994) 35 ALD 557 MacCormick v Commissioner of Taxation (1984) 158 CLR 622 MacCormick v Federal Commissioner of Taxation (1945) 71 CLR 283 Magrath v Commonwealth (1944) 69 CLR 156 Maritime Electric Co Ltd v General Dairies Ltd [1937] AC 610 McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263 McDermott Industries (Aust) Pty Ltd v Federal Commissioner of Taxation (2005) 142 FCR 134 Metropolitan Gas Co v Federal Commissioner of Taxation (1932) 47 CLR 621 Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Minister for Immigration and Multicultural Affairs v Thiyagarajah (2000) 199 CLR 343 Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALJR 992 Minister of National Revenue v Wrights’ Canadian Ropes Ltd [1947] AC...