1 Does the Applicant have a permanent establishment in Australia under double taxation agreement between Australia and Country A.
1 No Question 2 If the answer to Question 1 is 'No', is the Applicant required to lodge annual income tax returns under section 161 of the Income Tax Assessment Act 1936 (ITAA 1936)? Answer 2 No This private ruling applies for the following periods: Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX Year ending 30 June 20XX The scheme commenced on: 1 July 20XX
1. The Applicant is foreign incorporated company. 2. The Applicant provides services to clients in various countries, including Australia. 3. The Applicant's office is located in Country A. 4. The Applicant does not have any offices in Australia and does not own, lease, or otherwise control any premises there. 5. All the Applicant's employees are located in Country A. 6. The Applicant does not have any employees or offices in Australia. 7. The Applicant's employees carry out the necessary work from Country A to deliver its services to its clients. 8. Generally, Services for clients in Australia are managed entirely from overseas: engagements are approved and concluded remotely, required information is exchanged electronically, analysis is performed offshore, and final deliverables are prepared and sent digitally.
9. Between 1 January 20XX to 31 December 20XX, the Applicant had entered into an independent contractor agreement with contractor (Company 1), a private company operating under its own Australian Business Number (ABN). The contractor's engagement was strictly on an independent basis, with no employment relationship, common ownership, or control between the Applicant and the contractor. No personnel of the contractor were employees of the Applicant, and all dealings were conducted on commercial terms and at arm's length. 10. The Applicant did not exercise any right to direct or control the contractor's operations. The contractor was solely responsible for delivering the agreed services and had no authority to negotiate or enter into contracts on behalf of the Applicant. The engagement was temporary, lasting for a period of 12 months (1 January 20XX to 31 December 20XX), and was not renewed thereafter. There was no ongoing or permanent relationship between the parties.
11. The agreement confirmed the contractor's role was limited to client referrals, with no authority to negotiate or conclude contracts. It also stated the contractor was independent and not subject to employer-style control. 12. Furthermore, the Applicant had no control over the contractor's other engagements, which were allowed provided they did not conflict with services to the Applicant or breach the agreement 13. The contractor had been engaged to provide services for a few days per month, unless otherwise agreed in writing (Clause X.1). 14. The contractor was engaged for a maximum of X days per month unless otherwise agreed in writing, confirming the non-exclusive nature of the arrangement. 15. Fees were set at AUD per day (plus GST if applicable) on arm's-length terms. 16. The contractor operated independently without detailed supervision or control by the Applicant. 17. The agreement expressly disclaimed any agency relationship or authority to bind the Applicant. 18. The relationship was strictly independent.
19. The contractor had no authority to conclude or enter into contracts on behalf of the Applicant. 20. The agreement reiterated the absence of any agency authority. 21. The Applicant had no other contractors in Australia. 22. All directors of the Applicant reside outside Australia; no local directors exist, all high-level decisions are made offshore, and no board meetings have ever been held in Australia.
Income Tax Assessment Act 1936 section 6(1) Income Tax Assessment Act 1936 section 161 Income Tax Assessment Act 1936 Section 6(4) Income Tax Assessment Act 1997 subsection 6-5(3) International Tax Agreements Act 1953 subsection 3AAA (1) International Tax Agreements Act 1953 section 5 International Tax Agreements Act 1953 section 7 International Tax Agreements Act 1953 subsection 5(1) International Tax Agreements Act 1953 section 7 Australia-Country A Agreement Article 1 Australia-Country A Agreement Article 2 Australia-Country A Agreement Article 3 Australia-Country A Agreement Article 4 Australia-Country A Agreement Article 5 Australia-Country A Agreement Question 1 Does the Applicant have a permanent establishment in Australia under Article 4 of Australia and Country A agreement. Summar