Private ruling: International issues – Foreign entities - Residency
Date of advice: 14 November 2017
Published: April 2018

Ruling: Q1: Will the Commissioner consider the company to be a resident of Australia for income tax purposes under subsection 6(1) of the Income Tax Assessment Act 1936 by virtue of the company’s registration as a company under section 601BC of the Corporations Act 2001 (Cth)?



Reasons for decision: Summary: Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a person (which includes a company) is an ‘Australian resident' if that person is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (ITAA 1936). Subsection 6(1) of the ITAA 1936 relevantly defines ‘resident or resident of Australia’ for a company as: … (b) a company which is incorporated in Australia, or which, not being incorporated in Australia, carries on business in Australia, and has either its central management and control in Australia, or its voting power controlled by shareholders who are residents of Australia. The Commissioner will consider the company a resident of Australia if the company successfully registers itself as a company under section 601BC of the Corporations Act 2001 (Cth) as the company will then be a company which is incorporated in Australia.

Summary of the facts: The company was originally incorporated in the XYZ as a fund to invest into Australia. | The company is currently not registered as a company in Australia nor is a resident of Australia for tax purposes. | The company intends to apply for registration as a company under section 601BC of the Corporations Act 2001 (Cth).