Private ruling: Resident Company
Date of advice: 26 August 2019
Published: September 2019
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021 | Year ending 30 June 2022
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the company a resident of Australia for taxation purposes? | A1: No. The Company is not incorporated in Australia, the Commissioner is satisfied it does not carry on a business in Australia and its central management and control is conducted overseas. The daily operations of the business and the high level decisions of the company are conducted by the senior manager overseas.

Relevant facts and circumstances: The company is not incorporated in Australia and does not conduct its business or trading affairs in Australia. The sole director is a citizen from overseas and a temporary resident for Australian taxation purposes. The director retains an ownership interest in the company and has 99% of the shares on issue. The company has never conducted its business or trading affairs in Australia. By law the company is required to maintain certain responsibilities with government agencies and other organisations. The company is managed by a senior manager who has full control of the day to day operations of the business and makes the high level decisions. The director completes annual documents for statutory requirements, but does not participate in the day to day operations of the business or make any high level decisions. The director returns overseas to both sign and execute documents and to relieve the senior manager and staff when required. The future intention of the company is to sell the business. Upon this disposal the company will make a capital gain. The company will then pay out the profits as dividends and the company will cease trading.

Relevant legislative provisions: Income Tax Assessment Act 1936 section 6(1)(b) | Income Tax Assessment Act 1936 section 44 | Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 6-10 | Income Tax Assessment Act 1997 section 6-15 | Income Tax Assessment Act 1997 section 768-910 | Income Tax Assessment Act 1997 section 995-1