Tax Alert 

New Zealand companies may be Australian resident under ATO ruling

Is any of your company’s management or control exercised in Australia?  If so, you might be Australian tax resident.

On 21 June 2018 the Australian Tax Office (ATO) released a long awaited final ruling on corporate residency. The Ruling (TR 2018/5) turns the ATO’s previous position on its head.  The new position is that any company with its central management and control (CMAC) in Australia will be tax resident in Australia, regardless of where its trading operations are carried out.

Previously the ATO took the view that simply having CMAC in Australia was not sufficient to become tax resident, if its trading operations were carried out in another country.

This will obviously have widespread implications for the many New Zealand companies that are owned or managed from Australia.

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