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On 20 December 2018 and after almost two years, the Australian Taxation Office (ATO) released its final guidance (PCG 2018/9) in relation to the determination of tax residency of foreign incorporated companies.

Many taxpayers will be required to revisit their governance, systems and processes in relation to foreign incorporated companies and, in many cases, act quickly to make necessary changes before the transitional period ends on 30 June 2019.

These new requirements increase, unnecessarily in our view, the red tape and costs of doing business for Australian corporate groups that operate offshore. It remains to be seen whether this might be the catalyst for the Government to modernise Australia’s test of corporate residency in accordance with recommendations of Treasury and the Board of Taxation more than 15 years ago.


For further information, please speak to your usual PwC adviser.