Facts
A foreign company is incorporated in a country other than Australia. 2. The foreign company enters into a head contract with an unrelated company in Australia for a supply, construction and installation project in Australia. The foreign company entered into two further contracts for the expansion of the project and for the operation and maintenance of the project. All the contracts existed for more than twelve months. 3. Risk and title to all equipment and software comprising the project remain with the foreign company until the final acceptance certificate is issued in respect of the project. 4. Under the head contract, the foreign company is required to provide a dedicated project manager, resident in Australia, with authority to make day to day decisions during progress of the project. This role has been consigned to the managing directors of an Australian resident subsidiary company of the foreign company, who are also employees of the subsidiary company. 5. All fees under the various agreements have been invoiced to the Australian supply company directly from the foreign company. 6. The subsidiary company entered into two contracts with the foreign company to fulfil the foreign company's obligations under the head contract. 7. In turn, the subsidiary company further subcontracted a large portion of the work to an independent third party contractor to undertake the construction of the project. A number of other subcontractors were also engaged in the construction of the project. 8. In effect, this left the subsidiary company to undertake a lead project management role. Also employees of the subsidiary company undertook the operation and maintenance of the project as required under the operations and maintenance agreement. 9. All payments (in $A) to unrelated subcontractors are borne by the subsidiary company, which receives payments (also in $A) on a monthly basis from the foreign company pursuant to the service agreement with the foreign company. 10. During all stages of the project, no foreign company employees were ever present in Australia to work on the project in their capacity as an employee of the foreign company. All personnel from the foreign company became employees of the subsidiary company upon entering Australia. The employees of the subsidiary are thus made up of personnel from the foreign company and local staff with those from the foreign company taking up a greater proportion. 11. The project is managed from Australian premises leased by the subsidiary company from the unrelated contractor. The warehouse which stores the imported equipment used in the project is leased by the subsidiary company from a third party warehouse provider.