1 Is Company A an Australia tax resident under section 6(1) of the Income Tax Assessment Act 1936 ?
1 No. Question 2 Will Company A operate an Australian permanent establishment within the meaning of Part IVA of the Income Tax Assessment Act 1936 ? Answer 2 No. Question 3 Will the fees derived by Company A in relation to agreements in place with Company B (an unrelated company) be assessable under section 6-5 of the Income Tax Assessment Act 1997 ? Answer 3 No. This ruling applies for the following period: 1 July 20XX to 30 June 20XX The scheme commences on: 1 July 20XX
Company A is resident in an offshore jurisdiction. Company A is registered with ASIC as a foreign company. Company A is a global provider of services. Company A is a 100% owned by another Company who is also resident of an offshore jurisdiction. All decision regarding the management of the Company A is made in the offshore jurisdiction. Company A does use a third-party address as its registered office in Australia. The third party does not perform any Services on behalf of Company A. Company A entered into an agreement with Company B (an unrelated company who is a resident of an offshore jurisdiction) for the provision of services. These agreements are directly between Company A and Company B. The agreements are executed outside of Australia. The services provided by Company A are limited to facilitating the flow of funds (payments) between the Australian based customers of Company B and Company B itself. Company B sells products via an online marketplace.
There are no agreements between Company A and any Australian-based customers. Company A does not provide any services to Australian individuals or to any Australian entities. Company A does not participate in the operations of Company B. Company A does not have any Australian based employees and does not have any Australian based assets Company A only has an Australian bank account. An offshore user account is set up with Company A for Company B, from which Company B can withdraw funds as required, with any Company A fees automatically deducted at the time of withdrawal. These fees are deducted from the funds when they are withdrawn from Company A's offshore bank account.
Income Tax Assessment Act 1936 subsection 6(1) Income Tax Assessment Act 1997 subsection 6-5(3) Income Tax Assessment Act 1997 subsection 6-10(5) Does IVA apply to this private ruling? Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangemen