Australia: Updated guidelines on corporate tax residency

Amendments related to central management and control test

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June 13, 2025

The Australian Taxation Office (ATO) on June 11, 2025, updated its guidelines on corporate tax residency in PCG 2018/9, in particular regarding the central management and control (CMC) test.

The ATO's amendment specifically provides that if a company treats any foreign subsidiary differently for tax purposes and in their consolidated entity disclosure statement (CEDS) in annual financial reports, it will need to explain the inconsistency.

KPMG observation

The ATO's approach to the CMC test often poses challenges to companies trying to manage and document the location of CMC of their foreign subsidiaries. Further clarifying the rules could reduce compliance costs for companies and help companies avoid inconsistencies in their residency treatment of foreign subsidiaries.
 

For more information, contact a KPMG tax professional in Australia:

Julian Humphrey | jhumphrey@kpmg.com.au

Denis Larkin | dlarkin@kpmg.com.au

James Macky | jmacky@kpmg.com.au

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