Friday, July 6, 2018
Australia Revenue Publishes New Guidance: identifying where a company's central management and control is located
Income tax: central management and control test of residency: identifying where a company's central management and control is located
What this draft Guideline is about
1. This draft Guideline contains practical guidance to assist foreign incorporated companies and their advisors to apply the principles set out in TR 2018/5 Income tax: central management and control test of residency. This will help these companies determine whether they are resident under the central management and control test of company residency in subsection 6(1) of the Income tax Assessment Act 1936 (ITAA 1936).
2. This draft Guideline must be read in conjunction with TR 2018/5, which sets out the Commissioner's views on the meaning of central management and control, and the principles relevant to determining whether a company incorporated outside Australia is a resident under the central management and control test of residency.
3. The examples and guidance contained in this draft Guideline are general in nature. They cannot, and do not, cover every possible circumstance relevant to determining whether a company is resident, or non-resident, under the central management and control test of company residency.
4. Foreign incorporated companies who are unsure whether they are resident after having considered TR 2018/5 and this draft Guideline are encouraged to approach the ATO to discuss their circumstances.
5. This draft Guideline does not deal with the associated questions of:
- the voting power test of company residency for foreign incorporated companies1, or
- when a company carries on business.