The Australian Board of Taxation has published a second consultation paper for stakeholder review and input following an initial consultation launched in September 2019 as part of a review of the operation of Australia's corporate tax residency rules. The second consultation paper summarizes the comments and feedback received so far, and includes two primary reform options:
- retention of the existing 'carrying on business and central management and control' test (collectively referred to as the CMAC test) but with some form of legislative modification; and
- adoption of an incorporation-only test.
Although only these two possible reform options are presented, the paper notes that this does not mean that the Board is no longer contemplating other reform options or that there is any preference for either option. Consultation questions are included in the paper for each of the options, as well as for transitional arrangements if changes to the company residence rules are implemented.
The closing date for submissions on the second paper is 31 January 2020.