It is rumoured to be one of the easiest legal tricks in the book for wealthy people wanting to avoid paying tax: declaring themselves a resident of nowhere, or a resident of a lower-tax country.

Some years ago, actor Gerard Depardieu renounced his French citizenship and left the country to avoid paying what he saw as too much tax there.

There is no implication of wrongdoing on his part, but the case does highlight how questions about residency are crucial in a tax context.

The Australian Federal Government now wants to revamp 80-year-old tax laws on residency.

The "resident of nowhere" scenario, which is among a number of issues being considered, could be addressed by declaring Australians residents until they can prove residency elsewhere.

Website advises people to deregister

Currently, if you live in Australia for more than six months (183 days) and are not a resident of another country, you are generally considered to be a tax resident.

There are websites like Tax Free Today that advise how to "deregister" as an Australian tax resident.

"The chance to stop paying taxes — or, at least, income tax — is within your grasp," says an article on its website that explains how to live as a "permanent tourist" as a legal way to avoid tax.

"In order to deregister as tax-resident in Australia it is important that you do not own a property there, that you spend no more than 183 days in the country (it is actually better not to get too close to this maximum limit), and that you have no vital interests in Australia," the article suggests.

It advises against maintaining subscriptions to services or publications in Australia, having local accounts or bills in your name, and even shopping locally.

"In the end the simplest way to stop paying taxes in Australia as a national of country is (at least at first) to get permanent residence or even a tax certificate from another country," it says.

Loophole being exploited by wealthy?

While there are no statistics on how widely this method is used, or how much lost tax revenue could be up for grabs, the Tax Justice Network (TJN) suggests it is a legal loophole exploited by the wealthy.

TJN's Mark Zirnsak told ABC News the fact that there are websites explaining how to escape having to make any tax contributions shows there is a problem.

"You have people who are benefitting from doing business in Australia … yet they don't want to contribute anything back," he said.

"They're looking to free-ride off the rest of us. These people are parasites in the societies they live in."

The Tax Justice Network is one of many groups that have made submissions to the Federal Government's tax advisory board, the Board of Taxation.

In its initial report handed to the Federal Government in August, the board suggested addressing the "resident of nowhere" problem by declaring someone an Australian resident if they cannot prove residency elsewhere.

Mr Zirnsak said where a foreign jurisdiction was wilfully providing tax residency as an artificial arrangement to assist a person in not paying tax in Australia, the tax commissioner should have the power to deem that person an Australian resident.

It should, he said, have no expiry until the person can demonstrate they have legitimately changed their residency.

Tax experts call for firm data

But others question whether there is a widespread rort that needs addressing, and are concerned changes to the rules will hurt innocent taxpayers.

The Tax Institute's Bob Deutsch said while there may be some examples of people abusing the residency rules, "those situations are fairly limited".

"We're trying to deal with a small number of cases where there may be problems with residency rules by changing the rules for everybody. I don't see the logic of that to be honest," he said.

"I want to see more concrete evidence of all these wealthy people dodging an awful lot of tax."

Partner at KPMG Tax, Dan Hodgson, was also cautious about changing the rules.

"We are not convinced of the need for an integrity rule vis-a-vis the 'resident of nowhere' phenomenon," he said.

Mr Hodgson said one of the most complex aspects of the current law was the focus on the taxpayer's level of connectivity with a foreign jurisdiction, "and the often inappropriate projection of Australian norms onto the taxpayer's domestic situation in the other country".

"Obtaining evidence of tax residence, as certified by the taxation authority, may be costly and time-consuming, or practically impossible," he said.

"Some countries do not have a concept of tax residence, preferring to only tax income that has its source within the jurisdiction."