Dual Resident Companies
A not so recent High Court Judgement (2019) in Australia altered the way that the Australian Tax Office will apply the Central Management and Control test. The outcome of the judgement is that a foreign resident company that has an Australian based director could now be deemed an AUSTRALIAN Tax Resident Company for the purposes of Australian Domestic Tax Rules, irrespective of whether or not the business activities of that company are carried on in Australia or outside of Australia. Consequently, New Zealand Companies with Australian Directors would be resident in both countries for the purposes of domestic tax rules.
The recent amendment of corporate tax residency rules in Australia mean that more New Zealand Companies would find themselves resident in Australia. The proposed amendments in the Bill will ensure that such companies continue to be able to offset income tax losses against the profits of other group companies, have access to the consolidation regime and can maintain imputation credit accounts (ICA).
October 2022
