Australia:Tax Residency Status of Foreign Companies
Now that Australia’s Practical Compliance Guideline 2018/9, titled “Central management and control test of residency: identifying where a company’s central management and control is located,” has been finalised, the country is expected to see a rise in the number of foreign companies considered tax residents.
Foreign companies with central management and control located in Australia may now be considered to be undertaking business in Australia, and will therefore become resident for Australian tax purposes.
Should a foreign company be deemed a tax resident in Australia, it could be subject to higher tax liabilities and double taxation. Foreign companies in Australia should consider the factors outlined in the Guideline when reviewing their business structure, and make necessary arrangements before June 30, 2019, when the ATO will be empowered to begin their reviews of foreign companies’ tax residency status.