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Australia Issues Final Practical Compliance Guideline on Identifying Where a Company's Central Management and Control is Located — Orbitax Tax News & Alerts

The Australian Taxation Office has published Practical Compliance Guideline (PCG) 2018/9, Central management and control test of residency: identifying where a company's central management and control is located. The guideline contains practical guidance to assist foreign incorporated companies and their advisors to apply the principles set out in Tax Ruling (TR) 2018/5 Income tax: central management and control test of residency, which was issued on 21 June 2018 ({News-2018-06-26/A/2-previous coverage}). For this purpose, the guideline provides several examples of how the location of central management and control is determined in various cases based on where and how decisions are made.

The guideline also provides the Commissioners compliance approach, which includes the transitional compliance approach for foreign incorporated companies that had relied on TR 2004/15, which was essentially replaced by TR 2018/5, as well as the ongoing compliance approach. With respect to the transitional approach, the Commissioner will not apply resources to review or seek to disturb a foreign-incorporated company's status as a non-resident during the transitional period 15 March 2017 to 30 June 2019, provided that the company had relied on TR 2004/15, and on that basis was not a resident of Australia, and meets certain other conditions.

PCG 2018/9 applies from 21 June 2018.