International Taxationand Residence - Assignment Example

Mike is looking to work in Nigeria for a period of 3 years. The Australian government requires that a person who stays continuously or intermittently for 183 days in 1 year and for continuous 2 years in Australia will be treated as a resident of Australia (Non-Resident, 2012). The fact that Mike is looking to work for 3 years will ensure that he doesn’t stay for 183 days in Australia. This is an area that Mike needs to consider and makes it a point that he doesn’t stay in Australia for 183 days over 2 years. This will make him be treated as a non-resident and will ensure that he is not taxed in the country as the requirements for the resident of the country are not met.

Another important criterion to be considered as a resident of Australia is that if the person intends to work abroad for less than 2 years then the person will be considered as a resident of Australia. Mike is looking to work in Nigeria for 3 years so it put him out of the purview of the above requirement and will help him to be treated as a nonresident (CSA, 2012). The only thing that Mike needs to take care of is that he remains abroad and works for more than 2 years otherwise his income from the previous years will be subjected to income tax. This makes it mandatory that Mike plans in such a manner that he remains abroad and works in Nigeria for more than 2 years else otherwise his income won’t be treated as the one earned by a nonresident and will be taxed otherwise.

The government has also laid down the rules under which the person cannot have property in Australia as having such would tend to make the person be treated as a resident of Australia. This requires that Mike who has a private residence in Australia is kept out of purview. The fact that Mike has a private residential property in Australia he will be treated as an Australian resident and will be taxed (Budget, 2012). Even lending the property on lease or rent would mean that the person continues to receive income from his property which would mean that the person will have to pay taxes on the income earned on the property.

To ensure that Mike doesn’t have to pay taxes on his private residential property Mike must gift his property by passing and signing the required document. This would mean that the private property doesn’t belong to Mike anymore and has been transferred to someone else which would ensure that Mike doesn’t have a source of income from the private property and would thereby help him to be treated as a nonresident and will ensure no taxes on his income earned in Nigeria.

Mike also looks towards having his daughter who will stay in Australia itself. The Australian government has defined family as immediate family members and includes wife, daughter, brother, and so on. Since the daughter of Mike is residing in Australia this could make Mike be considered as a resident of Australia.